Maryland could become the latest market to raise its sports betting tax rate, with Gov. Wes Moore proposing to double it in his latest state budget.
Moore unveiled his proposed budget Wednesday. The proposal included multiple moves to help address a $3 billion budget deficit. `
Along with doubling the Maryland sports betting tax rate, Moore also proposed a new 6.25% tax rate on people earning more than $500,000 and a 6.5% rate on those making more than $1 million. Moore also proposed about $2 million in spending reductions.
Maryland sports betting tax hike
In the budget, Moore proposed raising the sports betting tax rate to 30% from 15%.
In recent gubernatorial budgets, Ohio doubled its rate to 20% from 10%, and Illinois added a tiered system up to 40%, up from 15%.
Moore also suggested raising the tax on casino table games to 25% from 20%.
Analyst reaction to hikes
Truist analysts said there were rumblings about more tax hikes this year. Legislators in Louisiana and Michigan have also proposed tax increases this session.
“The greater risk, of course, is more states follow suit and explore higher gaming taxes,” the note said.
The analysts did not expect a table game increase. Still, they believe it could be an opening for online casino legislation, which was filed in Maryland. They also note DraftKings and FanDuel are best suited to weather the tax increases.
“Ultimately, we think: 1) this may be a step on the road to iGaming legalization (bullish for stocks), and 2) market leaders DraftKings and FanDuel are likely best positioned to weather any storm as potential market share consolidators,” the Truist analysts said.
Maryland considers online casino
Last year, the House overwhelmingly passed online casino legislation. However, despite Sen. Ron Watson‘s efforts to educate lawmakers, it died quickly in an unfriendly Senate.
Del. Vanessa Atterbeary recently introduced House Bill 17, a bill similar to the one she guided through the House last year. It will be heard in the Ways and Means Committee, which Atterbeary chairs.
Last year, legislative estimates suggested the state could generate up to $900 million annually from online casinos. Much of the pushback, however, stemmed from land-based casino fears of revenue loss.
