Maryland Expected to Lead 2025 Sports Betting Tax Hikes, Says EKG

As the U.S. gambling landscape evolves, Maryland is emerging as the most likely state to increase sports betting taxes in 2025. Governor Wes Moore’s proposed budget aims to double the tax rate on mobile sports betting from 15% to 30%, while also raising taxes on table games at land-based casinos. The move comes as alternative revenue streams, such as iGaming and online lottery, face political resistance. Meanwhile, states like Ohio and New Jersey are also considering tax hikes, signaling a broader trend of increased taxation in the online gambling industry.

As we approach 2025, the outlook for states approving new iGaming or online sports betting legislation appears increasingly uncertain. However, one area gaining momentum is sports betting tax hikes, with Maryland emerging as the frontrunner to implement such changes.

Maryland Poised to Lead the Charge on Tax Increases

According to a recent report from Eilers & Krejcik Gaming (EKG), Maryland is the most likely state to approve a sports wagering tax hike this year. Governor Wes Moore’s (D) proposed 2025 budget includes a plan to double the mobile sports betting tax rate from 15% to 30%. Additionally, it seeks to raise the tax on table games at physical casinos from 20% to 25%.

“We view the Maryland one as the most likely to pass, raising the top-line tax rate from 15% to 30%,” noted EKG in its analysis.

While a similar effort in Indiana has already been declared “dead on arrival,” Maryland appears to have a clearer path forward.

Why Maryland Is the Prime Candidate for Higher OSB Taxes

One of the key factors making Maryland a likely candidate for a sports betting tax hike is the lack of political will to legalize iGaming or online lottery.

“Opponents of the tax rise have suggested alternatives like online casinos or iLottery to generate revenue. However, these ideas haven’t gained traction due to the complex political landscape compared to a straightforward tax increase,” EKG added.

Although a Maryland iGaming bill was introduced in the State House last month, most analysts believe it is unlikely to pass. Some policymakers fear that legal internet casinos could cannibalize revenue from land-based gaming venues. Despite support from the Maryland Lottery and Gaming Control Agency, which argues that regulated iGaming could help eliminate black market operators, the bill remains stalled.

With iGaming legalization appearing unlikely, raising sports betting taxes has become the default solution for increasing state revenue.

“Maryland is the most serious contender for a tax rise. A clearer picture will emerge by March or April, but the broader trend toward higher gambling taxes shows no sign of slowing down,” EKG concluded.

Other States Considering Sports Betting Tax Increases

Maryland isn’t the only state contemplating a tax hike on online sports betting.

• Illinois has already implemented a graduated tax system in which operators with the largest market share pay the highest rates.
• Ohio is exploring a proposal to double its OSB tax rate to 40%, just a year after raising it from 10% to 20%. Industry experts believe this aggressive increase is unlikely to gain approval.
• New Jersey is also rumored to be weighing an iGaming tax increase as Governor Phil Murphy seeks to close a $3.8 billion budget deficit. Currently, the state’s sports betting and iGaming tax rates (14.25% and 17.5%, respectively) remain below the national average.

With states under increasing fiscal pressure, more governments may look toward higher gaming taxes as a quick revenue boost. Whether Maryland sets a precedent remains to be seen, but 2025 could mark a turning point in the taxation of sports betting and iGaming.