(The Center Square) – Low tax yields are coming out of a record-setting month for Maryland’s sports wagering.
Despite $160.2 million in bets being handled through the first nine days of legal online sports betting in Maryland, PlayMaryland says the $704,728 yield on tax revenue is due to a higher amount of promotional spending.
Online sports wagering launched on Nov. 23, and $25.9 million in gross sports betting revenues were generated, according to the analysis.
Seven online sportsbooks opened on Nov. 23, just in time for placing wagers on NFL Thanksgiving Day games. During the first nine days little revenue was generated.
The revenue actually dropped, according to the analysis, to $704,728 from $781,642 generated in October when retail betting was the lone option.
PlayMaryland reported the drop in tax revenue amid the grandest betting stage in state history is only a short-term trend. The drop in revenue is attributed to promotional spending as sports books came online and offered sweetheart offers to get more people placing wagers to attract new, and more, customers.
The cause, according to the analysis, is the fact that gambling corporations operating in Maryland are permitted to deduct promotional spending. That spending is taken off the company’s financials, therefore generating less tax revenue.