Maryland online sports betting operators paid just under $45,000 in taxes during December despite handling over $478m in wagers in the same period.
According to data published by Maryland Lottery and Gaming, bettors in the state wagered $478.3m online during December, with NFL and NBA action making headlines as the holiday season began.
From this total, operators paid out $396.0m back to players in prize money, giving sportsbooks a hold rate of 17.2%, which would be regarded as very high for an average month.
Promotional play once again played a big role in Maryland’s sports betting market in December, with $70.9m given away in free bets or promotional credit. With sportsbooks racing to acquire customers in the emerging market, this figure is expected to decline in the months ahead, but it still represents a large outlay for sportsbooks to bare.
Maryland came in for criticism due to its operators only generating $4,000 in taxes from around $180m in November, giving more ammunition to those who blast sports betting for being a low-margin market.
The narrative of promotional credit is likely to rumble on throughout 2023 as the US sports betting market begins to mature, but Maryland has rules in place to limit the amount of promotional at 20% taxable after the first full year of operation.
Taking away promotional credit and ‘other deductions’, the six operators combined to post a GGR of $298,609. With Maryland imposing a 15% tax rate on GGR, online sports betting operators paid $44,791.36 in tax from $478.2m in wagers. Though this is an improved ratio from November’s results, it is likely to draw criticism from those opposed to sports betting.
Here is the breakdown of the performance of each operator in terms of handle and GGR:
- FanDuel – Handle: $236.3m. GGR: $45.2m
- DraftKings – Handle: $157.8m. GGR: $26.2m
- BetMGM – Handle: $42.3m GGR: $6m
- Caesars – Handle: $15.6m. GGR: $1.9m
- Barstool – Handle: $16.4m. GGR: $1.9m
- PointsBet – Handle: $6.7m. GGR: $0.8m
- BetRivers – Handle: $3.2m. GGR: $0.2m
Only three operators managed to post any taxable earnings due to the amount of promotional credit given out to customers.
BetRivers posted $53,411 in taxable earnings, paying the state $8,011.68 in taxes. Caesars managed to make $225,801, paying $33,870 in taxes, whilst Barstool posted $19,396 in taxable winnings, paying $2,909 in tax.
