MARYLAND. -- Governor Wes Moore has proposed a tax increase for mobile sports betting companies. Those companies are now warning their customers about potential negative ramifications.
DraftKings and FanDuel are two popular and widely used companies for mobile sports betting. To attract more business, though, they often offer promotions and bonuses during tournaments like March Madness, hoping to entice people to use their apps and place wagers.
However, if Maryland's tax increase goes into effect, those companies are warning customers that access to special offers could become scarce.
Jim Larrison watched eagerly as the tournament kicked off on Thursday. He had placed a few bets using promos and bonuses and isn't sure how much he'd open his betting app if those offers went away.
"I think by getting some of these promotions, I think it helps them[betting companies] because it makes me want to take longshots, try to get the payoff," said Jim Larrison. "I don't know if I would do that as much."
Moore has suggested increasing the tax on mobile sports betting companies from 15% to 30%, hoping this will help the state reduce its $3 billion deficit.
Governor Moore's office provided WBOC with a statement on Thursday as he and other lawmakers attempted to navigate the state's shortfall.
"The governor will continue to work with the State Legislature, local leaders, and all partners involved to ensure that we pass a budget that will give middle class families a break, grow our economy, and protect and invest in our people."
Local sportsbooks, however, are not thrilled about the possibility of forking up more money to the state.
"A significant tax hike would disproportionately impact smaller operators like us, limiting our ability to offer the promotions, odds, and bonuses that bettors have come to expect," said Derek Baker, Co-Founder of Crab Sports.
On Thursday, Delegate Wayne Hartman(R) told WBOC he doesn't believe the potential hike will be drastic.
"My understanding is it's going to come back looking somewhat different," said Hartman. "Maybe in the 20% range, we know it's going to be increased, to what extent I can't commit to right now."
The last day of Maryland's legislative session is April 27th. Lawmakers must finalize the budget by then.