With legalization expected soon, analysts say Maryland’s sports betting market will eventually see an annual handle of $3 billion.
That was the conclusion of the PlayUSA.com network, which includes PlayMaryland.com. The organization noted Governor Larry Hogan (pictured) is expected signs a bill to legalize sports betting in the Old Line State shortly.
When Maryland legalizes sports wagering, it will join 26 other US states plus Washington, DC, to do so. Twenty-two of those jurisdictions have launched.
According to Eric Ramsey, PlayUSA analyst, when the Maryland market matures it will generate more than $200m in yearly gaming revenue, which translates to as much as $35m in tax revenue for the state.
“Maryland will be an attractive market for operators in large part because regulators have embraced an open market,” Ramsey said in a statement. “The best predictor of a successful market has been whether it is designed to foster competition among numerous operators, which Maryland has done. A competitive market is more appealing to bettors, which in turn makes the industry a reliable revenue producer for the state.”
Jessica Welman, lead analyst at PlayMaryland.com, said Maryland’s tax structure, which is 15% of an operator’s taxable revenue, was well thought out by the legislature. “We have seen just how attractive sports betting has been in Virginia, which has a similar tax rate as Maryland, so we know this structure won’t scare away any potential operators,” Welman assessed. “There are questions unique to Maryland about whether local operators will be able to compete with the DraftKings and FanDuels of the world, which will surely be coming, or if the state’s inclusion efforts will affect the early growth of the industry. But the bottom line is sports betting should be a reliable revenue generator for the state.”
Ramsey said the Maryland market will have advantages and disadvantages. On the plus side, only Washington, DC, has a higher median income among legal sports betting jurisdictions. The fan bases of the Baltimore Ravens and Baltimore Orioles, plus nine Division I athletic programs, including Maryland and Navy, will help drive interest.
However, Maryland’s population, at just 6m, is similar to Colorado’s 5.8m among established sports betting markets. Colorado currently is the eighth largest sports betting market in the country, having taken in $1.8 billion in bets since launching in May 2020.
Maryland will be the first market to launch while being completely surrounded by jurisdictions that have already legalized sports betting in some form, Ramsey noted, adding the state does not have a significant sports tourism industry. Those two factors will make the market almost entirely locally dependent, he said.
“Maryland won’t have much opportunity to draw bets from neighboring states, which makes it a test case for the future of sports betting as more and more states legalize sports betting and make each state locally dependent,” Ramsey added. “But Maryland has enough local advantages to make it a strong bet to be a successful market.”