Maryland sportsbooks might soon extend fewer promotions and incentives to bettors should a proposed regulatory change be enacted.
The Maryland State Lottery and Gaming Control Agency regulates all forms of gambling within the state, including retail and online sports betting. The regulatory agency has proposed an amendment to its conditions governing how online sportsbooks market to consumers.
Under the current law, a licensed online sportsbook can deduct 100% of the promotional money given to bettors from their tax obligations in their first year in business. After the license’s first full fiscal year in operation, that declines to 20%. The state gaming regulator wants to further reduce how much promo money mobile sportsbooks can deduct.
The agency has suggested a 5% cap in year two moving forward after the first full year of a mobile sports wagering licensee’s operations. This means that after the first fiscal year of sports wagering activity, the amount of money given away as free promotional play in a fiscal year may not exceed 5 percent of total sports wagering proceeds that the mobile sports wagering licensee generated in the prior fiscal year.
Maryland is currently home to 15 active online sportsbook platforms. Notable operators include market dominators FanDuel and DraftKings. The state has one of the richest sports betting industries, with a small yet affluent population cherishing its Baltimore professional sports teams.
In the 2024 fiscal year, the state directed over $60 million in sports wagering taxes to the Blueprint for Maryland’s Future Fund, a program that supports public education. Lawmakers have been seeking a bigger slice of the pie and are pushing for further regulation changes.
Earlier this year, Gov. Wes Moore (D) signed the state budget into law that included a tax hike on sportsbooks from a rate of 15% to 20%. This could further increase the state’s benefit from legal online sports gambling if the proposed amendment is enacted.
The Maryland State Lottery and Gaming Control Agency proposal needs to be approved by the General Assembly’s Joint Committee on Administrative, Executive, and Legislative Review. The case remains ongoing in Baltimore City Court as FanDuel and DraftKings face a lawsuit alleging deceptive business practices.
Conclusion
The proposed regulatory change could have significant implications for Maryland sportsbooks and the industry as a whole. With 15 active online sportsbook platforms and a growing market, it is essential to ensure that promotions are fair and compliant with state regulations.