The financial results of from the first mobile Maryland sports betting report, during the Thanksgiving holiday period, produced some interesting numbers, including more than $180 million in mobile handle.
And as far as tax collections, though those numbers were perhaps disappointing, the figures were entirely to be expected given the nature of online sports gambling launches. Online sports gambling in newly launching jurisdictions almost always features generous bonuses and promotions for new customers, which can greatly reduce taxable revenue and, naturally, tax collections.
Regulations on Maryland sports betting apps are designed to rein in that tax break in the future.
Opening Reveals Interesting Maryland Sports Betting Trends
For the opening of mobile sports betting in Maryland with seven mobile operators launching, the handle was a little more than $186 million.
The total handle, including retail, in Maryland was just over $219 million. Of that $186 million wagered via mobile devices, almost $64 million was in promotional wagers. Customers typically enjoy those types of promotions when a state launches a new sports betting market but those free bets are deductible from the sportsbooks’ taxable win.
The starting date for mobile operators was the day before Thanksgiving, with the official launch of mobile Maryland wagering on Nov. 23. November figures also included a controlled demonstration day on Nov. 21.
Retail Sportsbooks In Operation For About a Year
Retail sports betting has already been part of the state’s sports wagering landscape since December 2021. That $219 million total handle, including mobile and retail, was up 452.3% from October (when it was almost $40 million) because of mobile’s nine-day impact.
Breaking down the financial figures, the November overall sports betting revenue (taxable win) was minus- $33.6 million — $4.67 million for retail and minus-$38.28 million for mobile, because of the online promotions.
You can get online Maryland sportsbook promotions and compare different operators with us at BetMaryland.com.
Mobile wagering accounted for just $4,262 in contributions to the state in its early days while retail contributed a little more than $700,000. Again, that was not surprising.
“We expect mobile sportsbook operators to continue to offer a lot of promotional wagers in the coming months as they venture into a new market and work to attract customers,” Maryland Lottery and Gaming Director John Martin said in a release. “There was tremendous pent-up demand, and a lot of people are utilizing promotional offers from multiple operators simultaneously. But as many of the operators have acknowledged, this level of promotional play is not sustainable, and based on our regulations, it will be curtailed over time.”
Normal For Early Promotions to Impact Revenue
The amount of a sportsbook’s promotional play in its first full fiscal year of operation is not limited by Maryland regulations. But after the first full fiscal year, Maryland regulations pump the brakes by requiring that a sportsbook’s promotional play amount may not exceed 20% of its taxable win from the prior year. The tax rate on taxable win is 15%.
Looking just at retail sports betting, the November handle was about $33 million, down 16.8% from October (about $39.66 million). That drop could be attributed to a shift in some betting from retail to mobile. There were nine retail sportsbooks in operation in November.
Overall, November’s sports betting revenue (taxable win) was minus-$33.6 million — again, because of mobile promotions. In the October Maryland sports betting report, the taxable win of $5.2 million was all from retail.
November’s exact state tax from all sports betting was $704,728, down 9.8% from October ($781,642).
Interestingly, the combined hold for Maryland’s sportsbooks was almost 14%, so had it not been for $63.8 million worth of promotional play, the sportsbooks books would have had revenue of almost $26 million. Again, this is typical in new betting markets as sportsbooks try to entice new customers to register.
“Deducting promotional play obviously has an impact on the bottom line, and that’s why we have a cap that takes effect after each operator’s first full fiscal year,” Martin said. “It protects the state’s interests and ensures that sports wagering will generate revenue for education, as intended. By awarding large amounts of promotional play in their first fiscal year, the sportsbooks’ promo play amounts will be limited in their second year.”
Breakdown of November Sports Betting
Here's how the individual Maryland mobile operators lined up by handle in November: Live! Casino Mobile (with FanDuel Maryland Sportsbook), $89,945,687; DraftKings/Crown MD, $69,598,659; BetMGM, $15,075,445; Hollywood Casino Mobile, $5,711,255; Caesars, $3,469,246; Riverboat on the Potomac Mobile, $1,653,028; BingoWorld/Arundel Amusements, $631,176.
November Maryland retail sports betting handle by casino: Live! Casino (Hanover), $12,172,214; MGM National Harbor, $9,721,997; Horseshoe Casino Baltimore, $4,962,248; Ocean Downs Casino (Berlin) $2,272,718; Hollywood Casino Perryville, $2,141,984.
Other retail facilities: BingoWorld $1,398,522; Greenmount OTB, $185,992; Long Shot’s (opened Nov. 18) $72,689; Riverboat on the Potomac $58,515.