Maryland is considering a change to its promotional credit deduction rules for gaming.
The Maryland State Lottery and Gaming Control Agency is proposing an adjustment of the state’s promotional credit deduction standards for licensed online sports betting operators. Maryland’s gaming regulator is aiming to reduce the amount of revenue operators can allocate toward offering free promotional wagers to eligible players.
The reduction allows the state to tax additional gaming revenue generated by operators.
Under active Maryland gaming standards, licensed online operators are allowed to offer up to 20% of their revenue as free wagers after their first full year of operations in the state.
The agency proposes lowering the amount operators can offer to 5%.
A change in the amount of revenue Maryland can collect from operators takes several steps of approval. In addition to being sanctioned by members of the Maryland State Lottery and Gaming Control Agency. The proposed provision also requires approval by the General Assembly’s Joint Committee on Administrative, Executive and Legislative Review.
Maryland is aiming to generate more revenue from wagering after a recent tax change.
Gov. Wes Moore signed into law the Budget Reconciliation and Financing Act of 2025 in May raising the state’s tax rate on sports wagering from 15% to 20%. Moore previously proposed doubling the state’s tax rate from 15% to 30% but didn’t garner enough support. The governor also proposed raising the state’s table game tax rate from 20% to 25%.
Maryland’s tax hike will help alleviate the state’s more than $2.5 billion budget gap.
The Budget Reconciliation and Financing Act did not include a provision to authorize online casinos putting an end to legislative efforts by lawmakers to bring them to the state.
Colorado governor signs off on promo deduction change
Last month, Colorado Gov. Jared Polis signed House Bill 1311 into law requiring operators in the state to only offer 1% of their revenue as promotional credit deductions.
The piece of legislation completely abolishes the deduction starting July 1, 2026.
Active gaming law in Colorado has revenue generated by sportsbooks taxed at a 10% rate but the operators can deduct 2.25% of the value of promotional non-cash wagers placed by players. That figure was already scheduled to fall to 2% in July 2025 and 1.75% in 2026.
According to the bill’s fiscal note, the measure is projected to generate roughly $13 million in additional revenue for the Water Plan Implementation Cash Fund in FY 2026-27.
The fund supports statewide recreation projects.
