After waiting patiently for the last two years, Maryland residents (and out-of-state visitors) are finally able to bet on sports online.
Seven of the ten licensed Maryland sports betting sites launched on November 23, 2022, the very first day of legal online sports betting in the state. The seven online sportsbooks that have already launched in Maryland are Barstool Sportsbook, BetMGM, BetRivers, Caesars Sportsbook, DraftKings Sportsbook, FanDuel Sportsbook, and PointsBet. More online sportsbooks are expected to launch in Maryland in 2023.
According to a report recently released by the Maryland Lottery and Gaming Commission (MLGC), sports bettors in Maryland wagered $186.08 million online between November 23 and November 30, 2022. Relative to the state’s population and average handle for a state that has just launched online sports betting, this figure is quite high.
To put things into perspective, Maryland has the tenth-largest population amongst states with legal online sports betting while New York has the largest population. New York officials reported that $603 million was wagered online during the first nine days of legal online sports betting in New York. While the figures in Maryland weren’t as high as in New York, they are still impressive numbers for a state with a considerably smaller population.
$63 million in promotional free bets given out by betting operators in Maryland was wagered during the first nine days, accounting for 34% of the $186.08 million total online handle.
Maryland sports betting tax revenue off to a slow start
Despite the total online betting handle being $186.08 million, the first nine days of legal online betting in Maryland only generated $4,261 in taxes (all of which went to state education).
Of the seven betting sites that are currently operational in Maryland, BetRivers was the only one to pay taxes to the state.
The other six online betting operators deducted the value of promotional bets (bets placed using free bet credits) from their revenue, resulting in the state missing out on more than $38.2 million in tax revenue.
This trend of little tax revenue for the state is unlikely to persist, however.
Maryland, like many other states with legal online betting, allows operators to deduct revenue from bets placed using promotional offers.
This is a tactic that is deployed to level the playing field for legal betting operators and illegal offshore betting sites, which don’t adhere to the same rules and regulations as legitimate operators.
Maryland betting sites will slowly but surely curtail the promotional offers they give out as the market continues to develop and solidify itself.
As promotional bets decrease, so will the revenue deductions, naturally. This will in turn increase the tax money generated by online sports betting in the state over time.
Maryland legislature dictates that sports betting revenue will be taxed at 15%, which according to a fiscal note attached to the online sports betting law will generate an estimated $17 million to $19 million a year in taxes.
The most popular betting apps in Maryland so far
The early market share in Maryland, so far at least, reflects the national averages in terms of total handle percentage, with FanDuel Sportsbook leading the pack. Below you can see how the total betting handle from the first nine days of online betting is divided between the seven betting sites that are currently operational.
- FanDuel Sportsbook: $89.9 million (48%)
- DraftKings Sportsbook: $69.6 million (37%)
- BetMGM Sportsbook: $15.07 million (8%)
- Barstool Sportsbook: $5.5 million (3%)
- Caesars Sportsbook: $3.46 million (2%)
- PointsBet: $1.6 million (0.86%)
- BetRivers: $631,175 (0.34%)
All in all, if the early days of online betting in Maryland are a sign of what’s to come, the Maryland online betting market is shaping up to be quite lucrative.