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In most states where sports betting is legal, the local government and top betting apps are friendly. At the end of the day, these apps are funneling hundreds of millions of dollars in tax revenues to the states, which they then use to fund public works like education. However, Maryland is not like most states, not right now at least. Just in the last two weeks, the state has opposed sportsbook operators in two major ways — a tax raise and a lawsuit. You got to keep on reading to see what’s going on down there!
DraftKings and FanDuel Catch Lawsuit From City Of Baltimore
We cover the entire industry, and have done so for years, but even this news shocked us. Get this, Baltimore Mayor Brandon Scott and the City Council dropped a lawsuit on the heads of DraftKings and FanDuel. The lawsuit accuses them of exploiting vulnerable residents and using deceptive tactics to grow their user base. The suit claims both companies violated Baltimore’s Consumer Protection Ordinance.
“These companies are engaging in shady practices, and the people of our city are literally paying the price,” Scott said in a statement. “They’ve targeted our most vulnerable — especially folks already dealing with gambling addiction — and they’ve done real damage.”
This isn’t just a throwaway lawsuit. No, this is a straight call to war from Baltimore leaders to Maryland’s whole sports betting space.
The lawsuit claims DraftKings and FanDuel are running a “two-pronged scheme to harm Baltimoreans,” via misleading promotions. It also mentions how much data these apps are mining on their users, going as far as to explicitly target problem gamblers to get them to bet more. The lawsuit gets more and more shocking as you read it, but those were just a few head-turning claims.
City Solicitor Ebony Thompson said the companies “put corporate greed ahead of the well-being of Baltimoreans.” He also quipped, “their predatory practices have caused significant harm to our community, and we are taking action to hold them accountable and protect our citizens.”
Other Operators Aren’t Off The Hook Yet
There are 11 different sportsbooks operating in Maryland, though only DraftKings and FanDuel are being singled out in the lawsuit — for now.
“They’re by far the biggest players in the market,” said attorney DiCello Levitt, who serves under the Baltimore City Department of Law “We haven’t ruled out expanding the scope against other companies, however.”
BetMGM, Caesars, Fanatics, and a few others could catch a case down the line, but for now, it’s just the “big two.” Indeed, DraftKings and FanDuel dominate this market, as well as most of the United States. In January 2025 alone, Maryland bettors wagered $475 million through DraftKings and FanDuel, accounting for 77 percent of the state’s $618.8 million total. That kind of domination makes them easy targets here.
For what it’s worth, FanDuel responded to the claims. A spokesman said the following:
“FanDuel does not comment on specific allegations in pending litigation. We are confident the company operates in accordance with all laws, including those established and enforced by the State of Maryland’s Lottery and Gaming Control Commission.”
DraftKings gave the silent treatment with no statement.
Maryland Also Raises Sports Betting Tax
The state wasn’t done with its crusade against licensed bookies. Nope, they also had to get a tax rate change in there for good measure.
This tax hike is official, thanks to a new law signed by Governor Wes Moore. The change comes from the Budget Reconciliation and Financing Act of 2025 — officially known as House Bill 352 — which raises the sports betting tax rate from 15 percent to 20 percent. This change goes into effect in the new fiscal year this summer.
Funny enough, it could’ve been worse for the sportsbooks. In earlier drafts of the bill, Moore pushed for a 30 percent tax on online sports betting, arguing it would help close a $2.7 billion budget deficit and bring Maryland in line with other states. He also proposed bumping the table game tax from 20 percent to 25 percent. After a long back-and-forth, lawyers watered down the plans before getting this passed.
Even with the lower increase, this new 20 percent rate still means less profit for operators and more revenue for the state. According to the bill, 5 percent of sports betting tax money goes to Maryland’s General Fund. The other 95 percent is earmarked for public education.
In somewhat related news, policies to legalize online casino gaming failed. There were separate bills introduced by Senator Ron Watson and Delegate Vanessa Atterbeary to legalize iGaming, but neither advanced past their original chamber.
Maryland first approved sports betting in 2020, but didn’t roll it out until the year after. It’s been a resounding success over the last four years. Official numbers from the state say Maryland sportsbooks have taken in $12.6 billion in wagers. Of that money, the sportsbooks have kept 11.4 percent for a whopping total of $1.4 billion.
Welp, with this new tax rate, there’s a chance those numbers decline — unless the industry can grow the users and in the process, the revenue. It’s plausible, but then again, if the lawsuit prevails, that might cause another headwind for revenues.
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