With less than two months gone in 2025, the chances of additional states legalizing iGaming or online sports betting are diminishing daily. Conversely, there is growing support for raising sports betting taxes, with Maryland standing out as a key player in this movement. 

A recent report by Eilers & Krejcik Gaming (EKG) indicated that Maryland might be the state most inclined to approve an increase in the online sports betting tax this year. Gov. Wes Moore’s (D) budget for 2025 suggests increasing the state’s tax on mobile sports betting from 15% to 30%. It also contains a clause to increase the tax rate on table games at physical casinos from 20% to 25%.

"We view the Maryland one as the most likely to pass, raising the top-line tax rate from 15% to 30%,” observes EKG.

The research company stated that a recent attempt to raise online sports betting taxes in Indiana is “dead on arrival,” suggesting that Maryland may be the only state to implement a sports betting tax increase this year. 

Reasons Maryland is a Rational Contender for Increasing OSB Taxes 

One of the reasons Maryland is a strong candidate for raising its mobile sports wagering tax is that there is insufficient political support for legalizing iGaming and online lottery. 

“Opponents to the tax rise have suggested online casino or iLottery to make up tax revenues; however, we hear these alternatives have not been overly persuasive because they involve much heavier political lifts than simply upping the sports betting tax,” adds EKG.

Last month, an iGaming bill was introduced in the State House, but there is a general agreement that the legislation is probably destined to fail because online casinos may present a competition risk to the state’s physical gaming establishments. 

The Maryland Lottery and Gaming Control Agency advocates for iGaming, reasoning that it could eliminate black market operators who are exploiting customers. This doesn’t indicate that the bill will be enacted, and without approval, the sports betting tax remains a key issue. 

“Maryland is the most serious contender for a tax rise, in our view, though we will have a better idea of that come March and April,’ according to EKG. “And regardless of that outcome, the general trend towards more taxation shows no sign of abating, in our view.”

Additional States That Might Increase OSB Taxes 

Last year, Illinois established a progressive tax framework for sports betting where the biggest market share operators incur higher fees. Worries increased in the gaming sector that additional states would similarly elevate those taxes as a means to strengthen state finances. 

This year, Ohio is working towards this with Gov. Mike DeWine (R) advocating for an increase in the state’s online sports betting tax from 20% to 40%. That comes after it had already increased to 20%, aligning with the national average. 

Industry analysts think the governor’s newest request goes too far and is improbable to be approved. Due to large budget shortfalls, New Jersey is also a contender to possibly change online gambling taxes this year. 

“There is some chatter that New Jersey Governor Phil Murphy is considering online gambling tax rises as part of his plan to address a $3.8bn budget deficit. The current OSB and online casino tax rates, respectively 14.25% GGR and 17.5% GGR, are comfortably below national averages,” concludes EKG.