With Maryland’s legislative crossover deadline come and gone, Del. Vanessa Atterbeary and Sen. Ron Watson’s 2025 attempts to legalize Maryland online casinos are likely over. Any remaining hope that iGaming would prevail essentially evaporated on Thursday when Gov. Wes Moore and Maryland’s General Assembly announced a 2026 budget framework agreement that failed to include online casino revenue in measures to make up an expected $3.3 billion deficit.
However, a 5% sports betting tax hike, up from 15% to 20%, but smaller than the 15% suggested, prevailed.
Online casino bills fail to get committee votes
Earlier this year, Del. Atterbeary and Sen. Watson introduced their respective companion bills—HB 17 and SB 340—to legalize online casinos in the state. Unfortunately, neither passed the opposite chamber by the March 17 cutoff.
Although addressed in a Senate committee in late January, Watson’s SB 340—which would have triggered an online casino voter referendum—gained no momentum beyond that first hearing.
Atterbeary’s bill, like Watson’s, taxed most iGaming revenues at 55%. With it, she sought to capture the estimated $7 billion spent annually on illegal gambling in the state.
Online casino advocates had suggested that the tax revenues could have offset a substantial portion of Maryland’s projected budget shortfall, even at a lesser tax rate. However, those opposed, including several Maryland retail casino operators, argued that cannibalizing brick-and-mortar revenues would do more harm than good.
Ultimately, neither argument mattered as both bills failed to get a committee vote.
In a release announcing the agreed-upon budget framework, Atterbeary, who chairs the House Ways and Means Committee, spoke to the agreement’s “hard choices.” Notably, however, the latest online casino efforts received no mention.
This budget represents hard choices, choices that are necessary to maintain stability, fairness and to do the right thing. Democrats were able to come together and make the difficult choices required to maintain our healthcare, transportation and schools; choices necessary to align our tax code with our current reality; and choices required as leaders. While it was difficult to grapple with making cuts and increasing revenues, I’m glad Democratic leadership could work together to continue to uplift Marylanders while many are losing their jobs, funding for critical services are being slashed, and there is so much uncertainty due to the federal government.
Sweepstakes ban could influence future online casino efforts
Gov. Moore has been bullish on raising online sports betting and casino taxes to help alleviate Maryland’s financial woes. As noted in the budget draft he released in January, he proposed doubling the online sports wagering tax rate from 15% to 30%.
Instead, the Ways and Means Committee approved a more modest 5% sports betting tax hike. Committee members also rejected the governor’s proposal to raise casino table games taxes by 5%.
While changes could still occur before the Budget Reconciliation and Financing Act is finalized, online casinos seem unlikely to reappear this year.
However, one gaming bill that progressed ahead of the deadline could put more pressure on legalizing online casinos in future years.
Sen. Paul Corderman’s SB 860 will increase punishments for illegal online casino operators and outlaw sweepstakes casinos if passed.
Earlier this month, the bill unanimously passed Maryland’s Senate with a 47-0 vote. The Ways and Means Committee later addressed the proposed legislation, although the hearing ended with no vote. The committee also heard Del. Eric Ebersole’s HB 1140 companion bill without voting.
Still, if the sweeps ban passes, some of the demand answered by sweeps will likely move offshore. Although sweepstakes operators don’t pay state gambling taxes, they pay regular business taxes, while offshore operators pay nothing.
If the sweeps ban succeeds, blocking those sites and apps from operating in Maryland would further reduce state tax revenues while making residents who gamble online less safe.
The added pressure could soon see Maryland lawmakers revisit online casino legislation more seriously.
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