Higher Tax Can't Stop Maryland's Gambling Revenue Decline | The Locally Times
Casino and sports betting revenue fell by $4 million in January from last year, even as a tax hike boosted state sports betting income 32.5%, according to state records.
The downturn in overall activity occurred despite a legislative change that increased the state’s tax revenue from mobile sports betting, creating a financial picture where the state collected more money from a shrinking pool of wagers. Data reveals a two-front decline in gross revenue. The state’s six casinos generated $147,877,520 in January 2026, a decrease of nearly $4 million from the $151,795,660 reported in January 2025. The slowdown extends to the fiscal year, with casinos bringing in $1,115,947,377 since July 1, 2025, which is $21.8 million less than the $1,137,804,270 recorded over the same period in the prior fiscal year. Sports wagering activity also dipped. The total amount wagered, or handle, was $615,845,563 in January 2026, a drop from the $618,824,226 handle in January 2025. The taxable win for operators—the amount left after paying winning bettors—also fell from $54,964,079 to $54,862,717 over the same period. Together, the figures point to a contraction in the state’s overall gambling market at the start of the year. ## The Tax Rate Effect While total betting activity decreased, the state’s direct financial benefit from sports wagering grew 32.5% in January 2026, rising to $10,928,540 from $8,244,612 in January 2025. Beginning in June 2025, the contribution rate for mobile sports wagering operators was increased from 15% to 20% of their taxable win, while retail operators continue to contribute at the 15% rate. This policy change has boosted state funds for the current fiscal year to $89,533,260, an increase from the $54,821,117 collected during the same timeframe in Fiscal Year 2025. This increased state share comes from a smaller base of operator promotional spending. The reports show that sports betting operators dedicated $20,345,620 to promotional play in January 2026, a nearly $5 million reduction from the $25,114,340 in promotions offered in January 2025. The available records do not specify whether the higher tax rate influenced this cut in player incentives, which could in turn affect the total wagering handle. ## Unanswered Questions in State Reports The state’s financial reports detail the revenue figures but do not provide an explanation for the underlying decline in casino patronage and sports betting volume. The documents from Maryland Lottery and Gaming lack any analysis of consumer behavior, market saturation, or economic factors that may have contributed to the January downturn. Gaps in public reporting make a complete, real-time assessment of the total monthly tax impact from all gambling sources impossible. While sports wagering reports provide a clear monthly 'Contribution to State' figure, the parallel casino revenue reports do not. The casino reports detail cumulative contributions to various funds since 2010 but omit a specific monthly breakdown of how much of the $147.8 million in January 2026 revenue was directed to state coffers. Official response or public discussion of these trends is also not apparent in available records. The Maryland Lottery and Gaming Commission has its next public meeting scheduled for February 26, 2026, but the agenda was not available at the time of this report. Similarly, a review of recent public meeting notices for local governments, including Harford County and the Town of Elkton, shows no agenda items related to discussions about gambling revenue fluctuations and their potential impact on local budgets. ## Stakes for State and Local Programs The shifting gambling revenue landscape has direct consequences for major state and local initiatives. A portion of mobile wagering revenue also goes to the state’s General Fund, which has collected $22,026,469 since July 2025. Casino revenue is a much larger and more established funding source. Since 2010, casino gaming has contributed over $20.9 billion in total revenue, with the largest share—$6.75 billion—directed to the Maryland Education Trust Fund. Other beneficiaries include local governments, which have received over $1 billion in local support grants, and the state’s horse racing industry. While the higher mobile tax rate is currently buffering state sports betting income, a sustained trend of declining overall gambling activity could pose a long-term risk to the stability of these funding streams. The January 2026 reports raise a critical question for state officials: can the strategy of increasing tax rates continue to yield higher returns if the underlying market from which those taxes are drawn continues to contract?