3 Key Takeaways From Maryland’s First Month Of Online Sports Betting

Posted on January 13, 2023 - Last Updated on January 17, 2023

Maryland online sports betting is off to a promising start, with plenty of positive signs for an emerging market.

In fact, the $478 million gambled online in December ranks as one of the top-performing debut months in U.S. history.

Here are three key takeaways from December data for online sports betting in Maryland.

1. Maryland online sports betting overshadows in-person gambling

As expected, the nation’s online sports betting giants jumped out ahead of the competition in Maryland, and online betting significantly outperformed in-person wagering.

There was never any question as to whether online sports betting would produce larger numbers than in-person gambling alone. The only real question was: By how much?

Maryland’s seven online operators kept 17% of the public’s bets this past December, generating more than $82 million in revenue. Only New York online sportsbooks reported a higher revenue-generating opening month.

Meanwhile, Marylanders gambled more money online ($478.2 million) than in the previous 10 months combined ($331.3 million) when retail was the only option.

Only New York ($1.66 billion, January 2021) and Arizona ($479.3 million, October 2021) reported larger monthly handles in their first full month of online sports betting.

Maryland is projected to continue to produce sports betting numbers on par with its population and wealthier residents. By next year, Maryland could rank between 11th and 15th among U.S. states in terms of online monthly handle, revenue and state tax collection, based on December’s figures.

2. Maryland sports bettors need a mulligan after December’s results

Online sportsbook operators seemed to enjoy the Old Line State’s entry into the digital gambling market even more than the public this December.

In mature-market states (think New Jersey, Pennsylvania, and Michigan), the average monthly hold (the amount after paying out winning bets to gamblers) for online sportsbooks is often between 6.5% and 10%.

The 17.2% hold for MD online sportsbooks in December is not unheard of (NY online books had a similar experience in Jan. 2021). Still, it’s among the largest hold percentages ever reported in a debut month.

Promotional wagers are the most likely culprit for high hold percentages in the first few months of online sports betting. Recreational gamblers enjoy the thrill of chasing long-shot odds with “free” bets. And the promos are tax write-offs for operators. It’s a (temporary) win-win.

Almost $71 million of December’s wagering activity was the result of promotional play, according to the Maryland Lottery & Gaming Control report.

These free bets won’t last forever, though. Online sportsbook operators have a 12-month grace period for taxable revenue, at the end of which point promotional play is no longer deductible.

Projections suggest that this will ultimately lead to the state increasing tax revenue come 2024.

3. Smaller sportsbooks struggle to catch Maryland online sports betting frontrunners

Maryland’s top-two online sportsbooks are familiar names: FanDuel Sportsbook and DraftKings Sportsbook.

These two popular daily fantasy sports operators control a large percentage of the legal U.S. betting market thanks to widespread name recognition and pre-made databases of millions of sports fans. Depending on the month and market, FanDuel and DraftKings are typically responsible for more than 70% of all legal online sports betting action in the country.

Maryland’s returns show a similar story.

In December, according to state gaming regulators, FanDuel Sportsbook took $236.2 million in online wagers and reported just over $45.2 million in revenue.

DraftKings Sportsbook handled $157.8 million and generated $26.2 million in revenue last month.

Combined, FD and DK accounted for 82% of the state’s online handle and almost 87% of operator revenue.

BetMGM is third in the Maryland online market, with more than $42 million in handle. Barstool ($16.4 million) and Caesars ($15.6 million) round out the top five.

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David Danzis

David Danzis is a lead writer and analyst for Catena Media's network of Play sites, appearing on PlayNJ, PlayCA, PlayOhio and PlayMaryland. He is a New Jersey native and an honors graduate of Rutgers University. As a newspaper reporter for the New Jersey Herald and Press of Atlantic City, David earned statewide awards for his coverage of politics, government, education, sports, and business. After years of reporting on Atlantic City casinos, NJ online gambling and sports betting, his focus is now on emerging gaming markets. David lives in Mays Landing, NJ with his wife and two children. When not on the beach, golf course, or the slopes, David enjoys watching his beloved New York sports teams — Yankees, Jets, Rangers, and Knicks.

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