Thanks to a voting referendum passed in November 2020, sports betting will soon be on its way to Maryland! Maryland sports betting will soon be in the form of both online and retail options! Certainly, a major point of interest leading to Maryland’s betting launch is what the tax revenue for Maryland sports betting will look like.
The referendum asked Maryland residents, “Do you favor the expansion of commercial gaming in the State of Maryland to authorize sports and event betting for the primary purpose of raising revenue for education?”
The voters approved the referendum. Legislators passed bills in April of 2021 to legalize sports betting. This comes with a total of 60 online sportsbooks licenses granted within the state. That number of licenses is currently the highest of any US legal market. Far more than already well-established states such as Pennsylvania and New Jersey.
Who Runs Maryland’s Gambling, Including Sports Betting?
The state agency that will be responsible for overseeing the introduction of both online and retail sports betting in Maryland is The Maryland Lottery and Gaming Control Commission. The agency will take on the great increase in revenue from the introduction of legal sports betting in the state.
The Maryland Lottery and Gaming Control Agency has already made several big moves in preparing the state for sports betting. You can see this below in the current timeline and projected changes to come.
Timeline for Online Sports Betting in Maryland
- November 2020: The residents of Maryland overwhelmingly support the sports betting referendum on the general election ballot.
- April 2021: The Maryland state legislature passes through House Bill 940. Governor Larry Hogan signs it into law in May.
- July 2021: The Maryland Lottery and Gaming Control Commission unanimously approved rules and regulations for legal sports betting. Residents of the state were provided with a period of thirty days to make comments on them. At that point, the agency went ahead with accepting applications.
- September 2021: Applications are under review and background check investigations are being completed by the Sports Wagering Application Review Commission. This happens to background check operators licenses to award to the initial sportsbooks.
- October 2021: The finalization of rules and regulations for Maryland sports betting pauses. Delays ensue. This delay is based on the need to review further commentary from stakeholders on several points of contention.
- November 2021: The Maryland Lottery and Gaming Control Commission awards several retail licenses. Licenses are granted to FanDuel, Caesars, BetMGM, TwinSpires, and Barstool for in-person betting. However, the Commission’s director, John Martin, said that online sports betting may take a while longer. Maryland is still aiming for a late 2022 launch.
What Will the Tax Revenue for Maryland Sports Betting Look Like?
The original referendum offered to Maryland residents in the November 2020 election proposed that sports betting be legalized. The stated purpose, as usual, was for utilizing that tax revenue for education funding!
So, since then, Maryland approved a sports betting bill that allows for the introduction of up to 60 online sportsbooks. This is currently FAR more than any other US state. It’s frankly a bit absurd. 60 sportsbooks can’t survive in any profitable capacity. However, of course, this all begs the question of how much extra tax revenue can Maryland expect to see in the coming years.
The state of Maryland will tax sports betting revenue at 15%. Some analysts project that the introduction of online sports betting in Maryland could produce as much as $217 million in annual revenue.
That projection taxed at 15% could mean that sportsbook betting could yield up to $32.5 million in annual tax revenue for the state once online betting is launched. On the other hand, Maryland state officials estimate a little bit lower saying that sports betting could generate up to $20 million annually in tax revenue.
Either way, online sports betting is sure to bring in an impressive amount of tax revenue yearly.
How Much of The Revenue from Maryland Sports Betting Will Come from Mobile Apps?
Several industry insiders also predict that mobile sportsbooks apps will consume a majority of the projected revenue. Predictions coalesce around at 85% of revenue from mobile apps. This suggests a total sports betting revenue of around $255 million.
Mobile sportsbooks apps have consistently taken up high percentages of total statewide revenue. This is immediately evident in the stats for several other states where sports betting is legal. For example, Pennsylvania is at 85%, New Jersey at 90%, and Illinois at 96%.
What Does This Mean for the Residents of MD?
The state government has stated that the tax revenue from sports betting will help fund public education in Maryland. With the increasing popularity of online sports betting and the projections being discussed… well. The amount of tax revenue that will be going towards education hopefully will benefit the public school system.
Possible Bottom Line
Let’s be honest, though. What the legalization of sports betting means is that sports betting is legal. That’s really it, for better or for worse. If gambling responsibly, it’s a bit of mostly harmless fun. And entertainment.
Plenty of Wagering Options
Allowing the unprecedented number of 60 online sportsbooks to enter the market will create absurd competition. Certainly, there’s no chance 60 actual sportsbooks will be in Maryland. However, a more realistic outlook could see up to 25 sportsbooks. Which is still a crazy number.
This is bound to benefit gamers greatly through generous promotions and fair odds. And, inevitably, more than a few sportsbooks in Maryland will fold quickly. The costs of promotions and acquisition are not for the faint of the heart.
But, hey, that’s not YOUR problem, that’s the sportsbooks’ problem. And no one is shedding a tear for them.
Maryland sports betting is set to boom. Indeed, online betting being a part of implementation from the get-go and making remote registration possible will encourage a wider consumer base than the industry has seen thus far.