Massachusetts Passes Sports Betting Bill in Overtime

Five hours beyond the end of the legislative session, lawmakers in Massachusetts approved a much-maligned sports betting law. In-person betting comes with a 15 percent tax, coupled with a 20 percent tax on mobile wagers.

Massachusetts Passes Sports Betting Bill in Overtime

They finally did it. After more than a year of legal wrangling, the Commonwealth of Massachusetts pushed the ball across the goal line. Massachusetts lawmakers reached a deal August 1 legalizing in-person and mobile sports betting. The bill awaits Governor Charlie Baker’s signature.

The deal concluded five hours past the 11:59 close of the legislative session on July 31. Baker has 10 days to sign it. If he doesn’t sign it, the bill is dead, but Baker is not likely to let it die, according to Sports Handle.

The inclusion of in-state college sports was a major sticking point holding up a deal. The legislation permits wagering on collegiate athletics, but not Massachusetts schools, unless they are part of a tournament like March Madness.

The legislation requires the Massachusetts Gaming Commission (MGC) to award in-person licenses for casinos, racetracks and simulcast facilities, as well as 15 mobile licenses through applications or digital platforms, according to a news release from the office of House Speaker Ronald J. Mariano.

Lawmakers settled on a $1 million application fee, and a $5 million licensing fee good for five years. Operators will also have to pay a $200,000 processing fee. This new law expects to generate an estimated $60 million in annual tax revenue for the state, in addition to collecting up to $80 million in initial license fees, renewable every five years. The taxes run from 15 percent on in-person wagering and 20 percent on mobile bets, according to Boston25 News.

In a statement, Mariano said, “I’m incredibly proud that today, and after years of House-led efforts to authorize legal sports wagering in Massachusetts, the legislature has acted to bring the immense economic benefits of a legal sports betting industry to the Commonwealth.”

The revenue collected will be allocated to municipalities, and for economic, workforce, education, and public health priorities.

“This legislation will provide much needed economic development to the state while allowing our residents to enjoy sports betting right here in the Commonwealth,” said Rep. Aaron Michlewitz.

The MGC will also be conducting a study into the feasibility of allowing retail locations to operate sports wagering kiosks.

A date for the launch of sports betting has not yet been determined.

The bill as written does not provide a go-live date, but the MCG will move to approve rules, open the application process, and authorize potential operators. In April, MGC Chair Cathy Judd-Stein said the agency was already doing “its due diligence” and would “be able to get those regulations in place nimbly.” But exactly what that means is anyone’s guess. The clock on legal-to-launch won’t begin until Baker signs the bill.

Going live in any state requires mountains of paperwork for regulators and operators, as well as the creation of bank accounts, rejiggering of mobile platforms, and time to advertise, among other details.

Senate President Karen Spilka, who opposed legal wagering, pushed for the in-state college ban. As recently as last week, she told WBUR, “We have heard from every single college president and all the athletic directors begging us to not include college betting in these bills, that it is not a good thing.”

The bill features an official league data mandate, should a league request it. The mandate is backed by the professional sports teams, but most legislatures ignore it. Massachusetts becomes the seventh state, behind Arizona, Illinois, Michigan, New York, Tennessee and Virginia, to require it. More than 30 U.S. states and jurisdictions have legalized sports wagering since 2018, according to Sports Handle.

The mandate means that sportsbooks must buy their data feeds either directly from the league or through a third-party vendor that has a deal with the league, and essentially gives the leagues a monopoly on data.

Another part of the bill costs some operators up to $1 million per year more to be in business as a stand-alone platform. The fee goes to responsible gaming.

Massachusetts has long had a history of strong and comprehensive responsible gaming infrastructure, and existing programs will now extend to sports betting.

Another issue deals with advertisements—digital platforms will have to show a gambling hotline number every time a bet is placed, advertising to minors is prohibited, no lines of credit may be given to bettors, credit cards cannot be used, and operators must submit a detailed problem gambling plan for review.

In total, there could be 15 mobile platforms across the state, which would make Massachusetts the most open, competitive market in New England, if not the U.S. When Maine goes live, it could have up to four, Connecticut has a cap of three, Rhode Island has two, and New Hampshire has one. The Bay State will even have more than New York, which currently has a cap of nine.

The legislation does not cover retail sportsbooks in any of the state’s stadiums or arenas.

“And they’ve told us in the past that it’ll take about 90 days for them to do that. We’ve been actively kind of talking to them and they’ve been following along so they should be basically up to speed on all the different components,” said State Senator Eric Lesser said. “So you’re talking about maybe October that the whole thing could be up and running. So you know, pretty soon, and definitely for the fall football season.”

The MGC is not waiting for Baker’s signature and planned an August 4 meeting to discuss how it will approach sports betting. The agenda calls for an overview of the regulatory process and timeline.

The state’s casinos have already identified and built out spaces for sports books, according to Off Shore Gaming Association.

“The Gaming Commission is going to be able to give provisional licenses and I think definitely the known players will have some level of advantage, right, because they kind of know the process, they’ve been through background checks for the brick and mortars at least back in 2011,” Lesser said.