Logic Behind Maryland’s Doubled Sports Betting Tax Rate is Flawed

• Maryland Governor Wes Moore proposed doubling the state’s sports betting tax rate to 30% for fiscal year 2026.
• The state expects to earn $95.43 million from sports betting in 2026 with the tax rate increase.
• Governor Moore claims the budget adjustments are to put Maryland in line with neighboring states, although this is not entirely accurate.

ANNAPOLIS, Md. – Maryland’s budget highlights for fiscal year 2026 feature a proposal to double the sports betting tax rate in the Old Line State. Governor Wes Moore proposed a 30% legal sports betting tax rate and also a table game tax rate increase from 20% to 25%.

That increase would give Maryland the sixth-highest wagering tax rate in the country. Governor Moore said in the budget document that the increase would make Maryland’s rate comparable to neighboring states.

“Finally, the budget makes the following changes to either bring Maryland tax rates in line with its neighbors or better align the State with the principles of sound tax policy,” said Governor Moore. But is this really accurate?

Doubling Wagering Tax Rate Logic Stems From Neighboring Rates

Maryland Neighbors’ Sports Wagering Tax Rates

Delaware’s 50% wagering rate stands out, but they only have about one million residents and are the worst sports bettors in the country based on hold rates. Pennsylvania’s 36% sports wagering tax rate is a valid neighboring state to reference, but states like West Viginia (10%) and Virginia (15%) hurt Governor Moore’s logic.

The reality is that Maryland can double their tax rate and earn a lot more money without much consequence. The move is likely inspired by recent moves from other states like Ohio’s tax rate increase from 10% to 20% or Illinois’ progressive sports betting tax that could get them up to a 40% rate for the state’s top sportsbooks like FanDuel and DraftKings.

Maryland is already making plenty of money since launching mobile sports betting in 2024, but Governor Moore cited that the state faces a $3 billion budget gap. The sports betting tax rate increase is the easiest way to rake in more revenue.

Per the full Maryland budget document, the tax rate doubling will increase money brought in through wagering up to $95.43 million in 2026. Maryland saw a 22.2% handle increase up to $3.1 billion in fiscal year 2025, resulting in $46.58 million in contributions to the state (up 89.4%).

News tags: Maryland | Wes Moore