Maryland’s online sports betting operators are now confronting an increased tax obligation due to recent legislative changes. This week, Governor Wes Moore ratified the Budget Reconciliation and Financing Act of 2025, known as House Bill 352, which elevates the tax rate for mobile sportsbooks from 15% to 20%.

This adjustment is part of a comprehensive fiscal strategy designed to bridge a substantial budget deficit. The Governor originally suggested a 30% tax rate for mobile betting services, labeling it as “appropriate tax policy” and asserting that it would bring Maryland in line with neighboring states’ rates.

However, after extensive discussions, lawmakers agreed on a more modest hike, with the House Ways and Means Committee endorsing the 20% rate through a 13-5 vote.

“This was not merely about budgetary equilibrium,” the Governor mentioned following the bill’s signing. “It was about enduring two challenges: a financial crisis alongside a federal administration that undermines our economy.”

According to the new legislation, 5% of the tax income generated from mobile sports betting will contribute to Maryland’s general fund. Meanwhile, 95% will continue to be directed towards public education initiatives via the Blueprint for Maryland’s Future Fund. Since the legalization of sports betting in the state in December 2021, over $160 million in tax income has been designated for educational purposes.

While the tax rate for mobile sportsbooks sees an increase, the tax on in-person sports betting revenue remains fixed at 15%.

Notably, the budget law does not permit online casino gambling, despite earlier proposals from lawmakers this year. Legislative efforts by Senator Ron Watson and Delegate Vanessa Atterbeary to legalize iGaming failed to progress within the legislature, with both bills not advancing beyond their original chamber.

Several operators had already incorporated the expected tax increase into their financial forecasts for 2025. DraftKings, one of the 11 licensed online sportsbooks operating in Maryland, indicated that the state’s tax increase could contribute to an estimated $30 million revenue decrease and a $26 million reduction in adjusted EBITDA in the coming year.

Maryland now joins a growing number of states in the U.S. raising tax revenue from legalized gambling. Ohio, which raised its tax rate to 20% in 2023, is considering a further increase that could reach as high as 40%, in addition to taxation based on total handle.

In Louisiana, House Bill 639, which aims to support public university athletic departments, includes a tax amendment and is currently awaiting Senate consideration. New Jersey’s governor has proposed a rise in the tax rates for online betting and iGaming to 25%, while Illinois has recently implemented a variable tax rate ranging from 20% to 40% depending on gross revenue.