Maryland’s adoption of an open market could make it an appealing proposition for operators, but analysts have issued a cautionary note due to the region’s almost entirely local reliance.
When Maryland Governor Larry Hogan signs the bill to formally legalise sports betting, which is planned, the state will join the 26 other US states and Washington, DC, that have some sort of sports betting regulation. Twenty-two of them have already gone live.
Maryland operators could take in as much as $3.1 billion in bets annually when the market matures, which will generate between $125 million and $225 million in taxable revenue per year, according to estimates.
With the region’s tax structure of 15 percent of taxable income, that may amount to as much as $35 million in state taxes.
Attractive market for operators
Eric Ramsey PlayUSA.com network analyst said: “Maryland will be an attractive market for operators in large part because regulators have embraced an open market.
“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.”
Reliant on local supply
Maryland is expected to be the first market to open, despite the fact that it is surrounded on all sides by jurisdictions that have legalised sports betting in some manner, and it lacks a major sports betting tourism industry. According to experts, these factors would make the demand almost entirely reliant on local supply.
“Maryland won’t have much opportunity to draw bets from neighbouring states, which makes it a test case for the future of sports betting as more and more states legalise 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.”
PlayMaryland’s lead analyst, Jessica Welman, said: “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.
“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 state’s industry. But the bottom line is that sports betting should be a reliable revenue generator for the state.”