Promotional deductions
Some states let sportsbooks and online casinos subtract free bets and other promotions from the revenue they pay tax on. This page estimates the tax those deductions removed in the states whose reports show it.
Tax given up, Sep 2025 – Aug 2026
$139M
on $519M of deducted promotions
Tax collected, same months
$496M
28¢ given up for every $1 collected
Tax given up since launch
$667M
4 state and product combinations
Tax given up each month
Pennsylvania, online sports bettingMaryland, online sports bettingConnecticut, online casinoConnecticut, online sports betting
$5.0M$10.0M$15.0M$20.0M2020202120222023202420252026
By state
| State | Product | Data from | Promotions deducted | Tax rate | Tax given up | Tax collected | Given up per $1 collected |
|---|---|---|---|---|---|---|---|
| Pennsylvania | Online sports betting | May 2019 | $1.4B | 36%[1],[2],[3] | $483M | $962M | 50¢ |
| Maryland | Online sports betting | Nov 2022 | $577M | 15%–20%[4],[5],[6],[7] | $87.3M | $302M | 29¢ |
| Connecticut | Online casino | Oct 2021 | $403M | 18%[8],[9] | $72.5M | $379M | 19¢ |
| Connecticut | Online sports betting | Oct 2021 | $172M | 13.8%[8],[10] | $23.6M | $104M | 23¢ |
| Total | $2.5B | $667M | $1.7B | 38¢ | |||
By year
| Year | Pennsylvania, online sports betting | Maryland, online sports betting | Connecticut, online casino | Connecticut, online sports betting | Total |
|---|---|---|---|---|---|
| 2019 (May–Dec) | $9.6M | — | — | — | $9.6M |
| 2020 | $27.6M | — | — | — | $27.6M |
| 2021 | $57.7M | — | $1.9M | $1.1M | $60.7M |
| 2022 | $68.5M | $14.5M | $10.0M | $4.1M | $97.0M |
| 2023 | $79.1M | $23.0M | $12.9M | $4.5M | $119M |
| 2024 | $93.4M | $10.6M | $14.5M | $5.0M | $123M |
| 2025 | $98.9M | $18.4M | $19.1M | $5.7M | $142M |
| 2026 (Jan–Aug) | $48.6M | $20.8M | $14.1M | $3.3M | $86.8M |
How the estimate works
Tax given up = promotions deducted × the statutory tax rate in force that month. It is worked out licensee by licensee: a licensee whose revenue is negative owes no tax with or without the deduction, so its promotions count as costing nothing.
- Pennsylvania subtracts promotions in full; the deduction is gross revenue minus taxable revenue in the Gaming Control Board's report. In about two dozen months the tax collected was below 36% of taxable revenue, which suggests losses carried forward, so the estimate may run slightly high.
- Connecticut caps the deduction at a share of gross revenue: 25% through September 2022, 20% the following year, then 15%. Online casino deductions match that cap. Sportsbook deductions don't: licensees that hit the cap deducted up to 33%, 24% and 20% of reported gross revenue in those periods. The figures here use what the state reported.
- Maryland reports taxable revenue after promotions, plus the promotions themselves. The tax rate rose from 15% to 20% on June 1, 2025. After a licensee's first year, deductions are capped at 20% of the prior year's revenue, so they run out partway through each year: from mid-2024 and late 2025 almost nothing was deducted. The rule describes a fiscal-year cap (July to June), but the reported deductions reset each January. A further 5% cap on mobile promotions has been proposed; when it took effect isn't confirmed, so no cap is applied.
This is a ceiling on what the deduction costs, not a forecast. Without the deduction, operators would likely spend less on promotions, and some of that revenue would never have existed.
Not included: states that report promotions without a taxable-revenue figure to check them against (New Jersey, North Carolina, Louisiana), and states whose reports omit promotions entirely.
Sources
- Frequently Asked Questions · Pennsylvania Gaming Control Board
- PA's sports betting taxes so high legal bookmakers may shun state · The Philadelphia Inquirer
- FY24-25 Monthly Sports Wagering Report Summary · Pennsylvania Gaming Control Board
- House Bill 352 (2025) -- Budget Reconciliation and Financing Act of 2025, enrolled bill text · Maryland General Assembly (mgaleg.maryland.gov)
- Proposed amendments to COMAR 36.03, 36.05 and 36.10 (including 36.10.13.39 Promotional Play), September 2024 · Maryland Lottery and Gaming Control Agency
- Fiscal and Policy Note, House Bill 291 (2026 Session) · Maryland Department of Legislative Services
- Maryland Governor Signs Sports Betting Tax Hike Into Law · Covers.com
- Governor Lamont Announces State Collects $1.7 Million From First Month of Sports Wagering and Online Casino Gaming · Office of Governor Ned Lamont
- Selected Online Casino Gaming Data · Connecticut Department of Consumer Protection (data.ct.gov)
- Selected Online Sport Wagering Data (Connecticut Department of Consumer Protection) · Connecticut Department of Consumer Protection
- PGCB Monthly Sports Wagering Report (online) (monthly revenue, Pennsylvania, online sports betting)
- Maryland Sports Wagering Data (2026-08) (monthly revenue, Maryland, online sports betting)
- CT DCP Gaming Division open data (Socrata) (monthly revenue, Connecticut, online casino)
- CT DCP Gaming Division open data (Socrata) (monthly revenue, Connecticut, online sports betting)