Maryland is the latest state to launch online sports gambling.
According to state regulators, seven operators were launched last month. Online sportsbooks held eight hours of “controlled illustrative betting” on November 21 and fully launched on November 23. In nine days of operations during the month of November, the online sports bet price was $186,084,496.
However, this amount included $63,835,319 in free promotional play, which is provided to customers and deducted from the taxable profit. As a result, mobile betting amounted to only $4,262 in contributions to the state in the first nine days.
The organizers explained the small amount of tax revenue.
“We expect mobile sportsbook operators to continue to offer plenty of promotional bets in the coming months as they venture into a new market and work to attract customers,” said John Martin, Maryland Director of Games and Lotteries. “There has been massive pent-up demand, and a lot of people are using promotions from multiple operators simultaneously. But as many operators have acknowledged, this level of promotional play is not sustainable and based on our regulations, will be curtailed over time.”
Maryland sports betting regulations do not limit the amount of promotional play for a sportsbook in its first full fiscal year of operation. However, after the first full fiscal year, regulations require that the bet game’s promotional play amount not exceed 20% of the taxable win for the previous year.
“Obviously discounting promotional play has an impact on the bottom line, which is why we have a cap that goes into effect after each operator’s first full fiscal year,” said Martin. “It protects the interests of the state and ensures that sports betting will generate revenue for education, as intended. By awarding large amounts of promotional play in their first fiscal year, amounts of promotional play to athletes will be limited in their second year.”
Maryland also has nine retail sportsbooks. The nonfiction books generated $700,466 in tax revenue for the state in November.
The state is one of more than 30 states in the country that has some form of sports betting legal. About half of these countries have online betting.