Maryland Sets Latest Trend with Sports Betting Tax Hike

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00:00finally let's get to maryland who's going to be a trendsetter in this industry the rest of the year

00:04looking for a tax hike in sports betting i know that a lot of you know states are looking to do

00:09this maybe the idea sam isn't going for what new york has at 50 you know maybe it's going for

00:16smaller increments because if it worked for maryland maybe it'll work for another state too

00:20yeah you're definitely right craig we've heard a lot of talk so far this year about sports betting

00:25taxes and maryland's one of the first to actually get it done with a hack tax hike increase they went

00:31from 15 to now 20 which will take effect just before the football season and that's a pretty

00:37big bump when you you know historically you've thought about most states only tax about five to

00:42ten percent you mentioned new york which is an outlier 50 but now we've seen more states kind

00:47of adopt the small incremental bumps which uh to your point craig a lot easier to get adopted than

00:52just double the rate you know we saw um ohio already doubled its tax rate once um from 10 to 20

01:00now it wants to do 40 as well so ohio has been one of the more aggressive states there new jersey

01:05actually just introduced a bill from the governor that would raise their rate to 25 you have louisiana

01:12also considering this but what seems to be easier to get done is when you have states like maryland where

01:17they were facing uh two and uh 2.7 billion dollar budget deficit uh they look to a business like

01:23sports betting which quite frankly you know when you have a recession or times when the economy is tough

01:28it's been pretty resilient and it's actually done a lot better it certainly was the case during covid

01:33when a lot of states faced budget shortfalls so um no surprise to see other states considering the

01:39idea once you have a state like maryland um having success with actually going through with it then you

01:44have to think about how the industry itself is going to respond you know last year trafficking

01:48famously uh announced uh that they were going to have this fee that was placed on bettors in high

01:54tax states like new york high tax states like vermont and illinois which would essentially just make the

02:00payout worse for people in those states they walked that back before ever implementing it kind of as they

02:06got a lot of backlash and we've heard other companies as well talk about you know quote unquote other

02:11levers they can pull to make up these differences in the states so i think it's going to be really

02:15interesting to see we kind of are at the point where we already know more states are going to

02:18adopt this but how do sports books themselves actually respond when you know the cat is kind

02:23of out of the bag and it doesn't seem like this is going to go away anytime soon i don't think

02:28anyone's really considering lowering taxes on sports books it might be a long time before that

02:33happens so we'll have to see how they deal with this we'll have to see if you know a proposal comes out

02:38to you know make the outcomes worse for betters in these states we'll have to see you know the

02:44industry certainly has a lot of other things uh legislatively that it's on it's on its plate

02:48yet prediction markets you have fantasy sports you have legalizing sports betting and i gaming in

02:52other states we'll have to see where this goes on the priority list in terms of combating tax rates

02:57especially if it's only incremental um so maryland uh we'll see if they you know if their move here

03:04is something that a lot of other states actually are successfully adopting but they're definitely

03:07thinking about it for now