Maryland Online Casino Hopes Fade As Gov. Moore Puts Budget Framework In Place

It appears hopes to legalize internet casino gaming this year in Maryland have come to an end after Gov. Wes Moore announced Thursday night there is a framework for the state budget for the upcoming fiscal year that attempts to close a projected $3.3 billion deficit.

While Del. Vanessa Atterbeary and Sen. Ron Watson each had their iGaming bills brought to their respective floors for debate, there was no guarantee of passage in either chamber. Online casino gaming also looked to take on a lesser priority in recent weeks as Maryland lawmakers joined other states in the push to ban sweepstakes casinos.

Rather than legalize a new gaming vertical, Moore and lawmakers are turning to an existing one to generate more tax revenue. The framework agreement calls for the sports betting tax rate to increase from 15% to 20% on adjusted gross revenue, which projects to create $32 million in additional receipts. Lawmakers rejected a call to raise the tax on table games revenue from brick-and-mortar casinos from 20% to 25%.

A path of lesser resistance?

There are no revenue projections for what would occur if Maryland lawmakers enact a ban on online sweepstakes casinos. Proponents of an online sweeps ban have referenced the figure of $6 billion in illegal wagering activity in Maryland during hearings, noting that the state receives no tax revenue from gaming played on those sites.

Maryland Lottery and Gaming sent a cease-and-desist letter to operator VGW on Monday, giving them until March 27 to answer with detailed descriptions of all their gaming offerings along with “any legal analysis or opinion interpreting Maryland Law that concludes, advises, or suggests that VGW may legally offer sports wagering, casino games or fantasy competition games in Maryland without Commission registration or licensure.”

Parties on behalf of VGW, as well as the Social and Promotional Games and Association (SPGA), have spoken in opposition to an online sweeps ban in the Old Line State. While the upper chamber’s Budget and Taxation Committee passed Senate Bill 860 in low-key fashion earlier this month, the Ways and Means Committee in the House did not bring up cross-filed bill HB 1140 for a vote last week after testimony on behalf of operator VGW and the SPGA.

Moore latest governor to get sports betting tax hike

Though Moore did not get his full ask for the sports betting tax hike — he proposed doubling the rate to 30% — he did become the third governor able to increase a state rate within the last two years. Ohio Gov. Mike DeWine doubled the Buckeye State’s tax rate to 20% in July 2023, and Illinois counterpart JB Pritzker last May overhauled Illinois’ tax structure from a flat 15% to a progressive one with a 20% floor and 40% ceiling based on revenue thresholds.

Additionally, New Jersey Gov. Phil Murphy has called on lawmakers to raise the state’s online sports betting tax and iCasino tax rates to 25% from 13% and 15%, respectively.

Maryland has collected $61.1 million in tax receipts from sports betting in the first eight months of Fiscal Year 2025. If operator revenue remains flat from March through June, the state will have seen an inflow of an additional $24.1 million in revenue for FY 2025 versus FY 2024.

Ohio will likely see more revenue from its rate increase, and Illinois already has. Ohio claimed $166.9 million in receipts from FY 2024 and has collected $109.5 million through the first seven months of FY 2025. If revenue matches February through June 2024 figures, Ohio would reach $174.5 million in receipts for the full fiscal year.

Illinois, meanwhile, has already reaped $225.5 million in the first seven months of the fiscal year with the new tax rates in place. That exceeds the $167 million claimed for all of FY 2024. Marketplace leaders FanDuel and DraftKings have already reached the maximum 40% tier after surpassing $200 million in revenue, while both Fanatics (30%) and BetRivers (25%) have also moved off the floor rate.