Those arguing sportsbooks are deducting too much in promotional credit from revenues before paying taxes have a whole new pile of ammunition. The numbers are in for the first month (technically only the first week since operators launched just before Thanksgiving) of Maryland online betting and the amount of promo credit being subtracted from numbers is so steep that the state’s online operators only generated $4,262 in tax revenue on over $186 million in wagers.
This is a temporary situation, as Maryland has rules in place to cap the amount of promotional at 20% of taxable after the first full year of operation.
“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,” said Maryland Lottery and Gaming Director John Martin. “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.”
According to numbers provided by the Maryland Lottery, handle across the six online operators came in at $186.1 million, a full $63.8 million of which was done with promotional credits. Unsurprisingly, FanDuel and DraftKings were the operators doling out the most credit at $29.4 million and $26.6 million respectively. They were also the top two sportsbooks by handle with $89.9 million for FanDuel and $69.6 million for DraftKings.
Despite being the top operators in the state, with the promotional deductions, FanDuel reported losses of $18.6 million for the month. DraftKings claimed losses of $18.6 million.
Here is a breakdown of each sportsbook and how much handle and gross gaming revenue (GGR) each brought in:
- FanDuel: $89.9 million in handle / $11 million in GGR
- DraftKings: $69.6 million in handle / $9.6 million in GGR
- BetMGM: $15.1 million in handle / $3.9 million in GGR
- Barstool: $5.7 million in handle / $367K in GGR
- Caesars: $3.5 million in handle / $625K in GGR
- PointsBet: $1.7 million in handle / $277K in GGR
- BetRivers: $631K in handle / $87K in GGR
Of these operators, the only one to not claim losses on the month was the lowest earner, BetRivers. The operator did give out some promo credit, but it amounted to just $57,000 and left BetRivers with $28,411 in adjusted gross revenue (AGR).
Hold across all the operators was exceptionally high, save for Barstool sportsbook, which posted 6.4% hold. BetMGM held nearly double the rate of most competitors at 26%. Caesars was at 18%, while PointsBet rounded out the top three with 16.7%. Barstool was the only operator that did not post double-digit hold.
By comparison, on the retail side of Maryland sports betting, brick-and-mortar sportsbooks generated $33 million in handle, held 14.4% for GGR of $4.7 million, and paid a combined $700,466 in taxes to the state.