Maryland online gambling

Written by Denise Mathey

Checked by Paul P.

Online gambling in Maryland is still a new thing — but the scene is changing fast, especially with sports betting sites’ launch in 2022.

I’ve taken a deep dive into what’s legal and what’s not in Maryland. I explore Maryland gambling laws, giving you a clear picture of what you can find right now, what to expect in the future, and how the Maryland gambling landscape is changing moving forward.

• Overview
• Maryland gambling taxes
• Income tax rates
• Paying gambling taxes
• Undisclosed winnings
• Maryland legal gambling
• Social and sweepstakes casinos
• Best betting sites
• Other types of gambling
• Offline gambling in MD
• Video lottery terminals
• Safety
• FAQs
• Sources

Maryland online gambling taxes

Currently, sportsbooks and daily fantasy sports sites are 100% legal in the state of Maryland (MD). That said, online casinos and poker rooms are prohibited. This means you won’t be able to gamble online, as there aren’t any state-regulated casinos.

Regarding sweepstakes casinos, the Maryland Lottery and Gaming Control Agency (MLGCA) recently sent cease-and-desist letters to several operators, including Virtual Gaming Worlds (VGW), which runs sites like Chumba Casino and LuckyLand Slots.

So, while sweepstakes casinos aren’t officially banned yet, Maryland is moving swiftly in that direction.

All gambling winnings from playing at legal online options in MD are taxed as state income. MD applies an automatic state withholding tax of 8.75% on all gambling winnings exceeding $5,000.

If you earn less than $5,000, you’ll still need to report it to the state based on a gradual income tax system. This guide will take a closer look at online gambling taxes, and show you how to comply with state taxes in MD.

Is the tax rate different for each type of gambling?

The Maryland state gambling tax rates apply to all forms of gambling winnings, be it sports betting or DFS.

While the 8.75% is taken out up front for winnings exceeding $5,000, gambling winnings under this threshold will need to be reported on your state tax return, and are based on a graduated tax system.

How does your income affect taxes in Maryland?

In MD, the amount of money you earn through your job or any other source of income, including gambling winnings, determines the tax bracket that you fall into.

This is due to MD’s graduated tax system, as well as Maryland’s local income tax, which applies to all counties. In a nutshell, the higher your income, the higher the rate you’re taxed at.

Maryland’s tiered tax brackets start at 2% for the first $1,000 and go up to 5.75% for amounts exceeding $400,000.

Additionally, MD local income tax rates for residents apply to all income. The rates vary depending on the specific county or city you’re in. Local income tax rates start at 2.25% and go up to 3.20%.

Let’s take a closer look at how this works in the table below:

How to pay gambling taxes in Maryland?

All money won online in Maryland is fully taxable, and this includes everything from the federal level right down to county level. Below are the steps you need to take in order to meet your tax obligations in MD:

Keep records

• Ensure that you track your wins, including the dates that you won money from gaming, the amounts won, and also the operators you received your payout from.

Check withholding

• If you won any amount over $5,000, then 8.75% of that amount is to be withheld by default. 
• This means that the online operator should take 8.75% of those winnings at the time of payout.

Report all winnings

• Irrespective of the amount, even if it’s under $5,000, you have to report every win on your state and federal tax returns.

File your state return

• To file your Maryland state tax return, you’ll need to complete Form 502.

Pay what’s owed

• Even if 8.75% of your winnings exceeding $5,000 was withheld, you may be liable for either a refund or you may still owe a difference based on the graduated state income tax system, plus the county tax rates.

File federal taxes

• All winnings must also be reported on Form 1040, on line 8b, and you’ll also need to complete Form W-2G and submit it to the Internal Revenue Service (IRS).

What happens if you don’t report gambling winnings in Maryland?

If you don’t report your gambling winnings in Maryland, you could end up paying more later. The IRS sees what you win if you got a tax form, so if you leave it off your return, they’ll notice. You might owe extra, and they could charge you for not sorting it out sooner. It also makes it more likely they’ll take a closer look at your taxes. And even if no form shows up, you still have to let them know about anything and everything you win.

Maryland online gambling sites by type — what is legal?

Can you gamble online in Maryland? Online gambling in Maryland is still a new thing, which means it isn’t entirely legal yet. Online sports betting and the apps that come with it launched back in 2022, but online casinos aren’t legal for the time being.

Check out the table where I’ve broken down the different types of legal gambling available in Maryland: 

Social and sweepstakes casinos Currently exiting Maryland

Maryland is currently cracking down on sweepstakes casinos, with cease-and-desist letters being sent to major sweeps owners and casinos such as Chumba and Luckyland Slots

While they are currently still legal in Maryland, it seems like only a matter of time before sweeps casinos are pushed out entirely. Social casinos on the other hand remain legal, with casinos such as BetRivers.NET having no redemptions and simply being play-for-fun sites.

The best Maryland betting sites Legal since 2022

The first retail sportsbook opened in April 2021 in Maryland. The bill to legalize online gambling with sportsbooks went into effect in 2022, with a handful of major US online sportsbooks launching in the state, these being:

Other forms of gambling in Maryland

Online slot machines aren’t yet a thing in Maryland, but gambling still possible in the state. You can choose between online lotteries, bingo, and horse racing. Check out the cards below:

Lottery

Lotteries are a legal form of gambling in MD. They were created in an attempt to compete with video lottery terminals. The most popular lotteries include the Mega Millions, the Keno – Pick Twenty!, and the US Powerball. Lotteries in Maryland have been offering both land and online services since 2011 and the legal age to gamble using this product is 21.

Bingo

Online bingo is a popular form of gambling in Maryland. Most sites even allow you to play for free, meaning you can enjoy a few rounds without spending a dime. The best online gambling sites in Maryland offer bonuses for bingo players that could include free entry tickets or bonus cash.

Horse Racing

Gambling on horse races in Maryland is perfectly legal as long as you’re wagering at a reputable site regulated by the Maryland Racing Commission. You’ll need to find an advance deposit wagering operator (ADW) like TVG and TwinSpires.

Offline gambling in Maryland

The Maryland gambling scene is still pretty new, which is why you won’t find many places to do so, online or otherwise. There are a total of six land-based casinos, most of which opened within the last decade or so.

I’ve made a table that gives you an overview of each of the six brick-and-mortar casinos where you can enjoy some gambling in the Old Line State.

Video Lottery Terminals in Maryland

Legalizing video lottery terminals (VLT) in Maryland as a form of gambling was in the cards since the mid-90s, only being seriously considered after the economic recession of 2002-2003.

The law allowing them to start operating passed in November 2008, and the first VLT facility opened its doors in 2010. The jurisdiction monitors gameplay through a centralized computer system in order to collect a percentage of the game’s revenue.

Video lottery terminals are found in select, licensed, land-based establishments like the Rocky Gap Casino Resort.

Maryland gambling and safety

Online gambling in Maryland may be limited, but that doesn’t mean it isn’t safe. Depending on the kind of game you’re playing, the best Maryland gambling sites are regulated by the Maryland State Lottery, Maryland Racing Commission, or Maryland Secretary of State – Charitable Organization Division. Another stamp of approval is the Maryland Lottery and Gaming Control Agency.

Maryland gambling laws require any online site that wishes to offer sports betting once it becomes legal to apply for regulation with the Sports Wagering Application Review Commission.

You’ll find the logos of the relevant regulatory bodies in the footer, header, and/or terms and conditions of any legal online gambling site in Maryland.

FAQs

Sources

• https://www.marylandtaxes.gov/forms/Personal_Tax_Tips/tip59.pdf
• https://www.marylandtaxes.gov/forms/Tax_Publications/Tax_Facts/Withholding_Tax_Facts/Withholding-Tax-Facts-2025.pdf
• https://www.betmaryland.com/gambling-winnings-tax#:~:text=The%20State%20of%20Maryland%20has,your%20tax%20bracket%20are%20considered