One of the more concerning topics for sportsbooks that has hit state legislatures recently is raising sports betting taxes.
While sports betting has better margins than the industry originally sold to state governments in the early days post-PASPA, higher fixed costs in states than previously expected can throw a wrench into plans for even the biggest sportsbook operators.
So far, only two states have successfully raised their sports betting tax rates: Illinois and Ohio. Some are still trying, like North Carolina, while others (like Ohio on its second try to raise the rate) have officially failed in their 2025 attempts.
Those failed attempts and the remaining budget gaps, and concerns about a potential recession, could help speed up online casino legalization around the country.
Recent failures to raise sports betting taxes
As already noted, Ohio Gov. Mike DeWine this year attempted to increase the state’s sports betting tax a second time. This would have doubled the tax to 40% after it originally passed the legislature at a 10% rate in 2022.
Maryland Gov. Wes Moore also attempted to raise his state’s tax, first trying to double the rate to 30%. That was negotiated down to a 5 percentage point increase to 20%, though that was eventually stripped from the budget.
The idea was also tossed around a couple of other state legislatures, including Indiana, Louisiana, Michigan and New Jersey.
Bah Gawd, that’s online casino’s music
There is plenty of opportunity for online casino expansion throughout the US.
Right now, legal online casino gambling is only live in a handful of markets. Some of those are major gaming markets: Michigan, New Jersey and Pennsylvania. The other markets are much smaller in size: Delaware, Connecticut, Rhode Island and West Virginia.
The topic got attention in more states than ever before in 2025, but there was little progress, if any, made in those attempts:
Does iGaming eat away from land-based operations?
Online casino, or iGaming, has been the boogeyman of land-based gaming operators for more than a decade. Opinions tend to vary across the industry about whether iGaming truly cannibalizes land-based gaming, though one former regulator feels confident it does not.
“When you hear the fear-mongering of cannibalization and loss of jobs from internet gaming, I have 12 years of data in New Jersey showing that isn’t true,” former New Jersey Division of Gaming Enforcement Director Dave Rebuck once told PlayUSA. “Online gaming doesn’t cannibalize brick-and-mortar casinos, and it doesn’t hurt casino jobs.”
Take New Jersey’s results from March 2025 compared to March 2024 and March 2023:
- Land-based casinos reported $230.9 million in revenue in March 2025, which was outpaced by a record $243.9 million in online casino revenue. That land-based revenue was down 3.7% from March 2024 but up 1% from March 2023.
- The online casino numbers, meanwhile, show that iGaming tends to grow the gambling market instead of move dollars from one vertical to another. That $243.9 million in revenue for March 2025 is up 23.7% over March 2024 and 47.2% over March 2023.
