Maryland Sports Betting Revenue
At the end of 2021, Maryland launched the first legal retail sportsbooks in the state. Five of the state’s six casinos have already begun accepting regulated wagers, while professional teams and stadiums, racetracks, bingo halls, and even bars and restaurants will join in the near future.
To boot, the first MD betting apps will start rolling out once mobile wagering is officially approved. Regulators hope online sportsbooks in Maryland can launch and begin taking wagers by Fall 2022.
Maryland’s sports betting market is projected to take up to $3 billion in handle per year once its market matures. And the industry could generate up to $200 million in revenue and $35 million in yearly state tax revenue.
How big could MD sports betting become?
To understand how much revenue sports betting in Maryland could generate, you must first grasp a few terms:
- Handle: Amount of money wagered by bettors
- Gross gaming revenue: Total made by sportsbooks minus winnings paid out
- Hold percentage: Gross gaming revenue divided by total handle
- Tax revenue: Money that regulators collect from sportsbook operators
Maryland could reach market maturity by its third year. By then, sports betting operators could total $3.1 billion in handle, which could generate between $125 million and $225 million in taxable revenue.
The 15% tax rate agreed upon by lawmakers could translate to $35 million for the state.
The success of Maryland sports betting will largely rely on how much competition regulators can foster. This should be no problem for operators in the Old Line State. Regulators approved 60 mobile sports betting licenses and more than 40 retail licenses.
Licensing fees for MD sports betting
Before the state even begins benefiting from wagers placed, Maryland will see revenue immediately start coming in just from licensing fees.
From mobile licensees paying $500,000 for initial fees to top Class A licensees shelling out $2 million, upfront costs for operators and license holders will provide an immediate boon for Maryland.
The breakdown of each individual tier, including which properties are eligible to obtain those licenses, goes as follows:
|License||License Fees||Eligible Licenseholders|
|Class A-1||$2 million license fee|
$500,000 renewal fee every five years
|Casinos with 1,000 or more machines, horse racetracks and major professional sports facilities|
|Class A-2||$1 million license fee|
$300,000 renewal fee every five years
|Casinos with less than 1,000 machines|
|Class B-1||$250,000 license fee|
$50,000 renewal fee every five years
|Those who fit this license but are not small enough businesses for B-2|
|Class B-2||$50,000 license fee|
$10,000 renewal fee every five years
|Entities with fewer than 25 employees and $3 million in gross receipts|
|Mobile||$500,000 license fee|
$100,000 renewal fee every five years
Could MD sports betting reach market projections?
Maryland has plenty of advantages when it comes to legal sports betting.
Only Washington, DC, boasts a higher median income among jurisdictions with regulated wagering. Then factor in the active fan bases of regional professional teams such as the Baltimore Ravens, Baltimore Orioles, and Washington Football Team, not to mention nine NCAA Division I athletic programs.
Additionally, Maryland will feature a very inclusive sports betting industry, with over 100 retail and mobile betting licenses up for grabs.
That said, the state’s population of 6 million lines up with the likes of Colorado, which stands as the eighth-largest sports betting market in the country. Since going live in May 2020, Colorado has totaled $1.8 billion in wagers that have led to $109.4 million in gross gaming revenue.
Moreover, Maryland is the only state with legal sports betting that’s surrounded by other jurisdictions with regulated wagering. The state also doesn’t feature a significant sports tourism industry, which adds to the point that Maryland sports betting might have to rely entirely on local interest.
Passionate fan bases will help MD sports betting
The state’s numerous professional and college sports teams should buoy its yearly sports betting tax revenue.
Pro franchises with home venues in Maryland include:
- Baltimore Orioles
- Baltimore Ravens
- Washington Football Team
As for college, major NCAA Division I schools that compete in the FBS include the Maryland Terrapins and Navy.
Some states launch sports betting without any neighboring competition, allowing those industries to capitalize by attracting visitors. Maryland, though, has no such advantage.
But with major professional sports, six casinos, a bevy of racetracks, off-track betting sites, and other entities that could offer legal betting, Maryland can still see its sports betting industry thrive.