David Friedman feels Massachusetts’ pain.
Friedman, senior vice president of legal and government affairs for the Red Sox, testified during a State House hearing that passage of a bill to allow sports wagering on games would not only help Massachusetts, but help the Red Sox as well.
“The Red Sox would likely enjoy a modest financial impact due to the sale of ads and sponsorships from sportsbook operators in Fenway Park,” Friedman told GGB News. “We also see value in fan engagement.”
But despite Friedman’s testimony, the bill failed to gain traction and was removed.
“As it relates to sports gaming, sports wagering, I believe that certainly, the time is close when we are going to be tackling this issue, but the time is not now,” State Sen. Michael Rodrigues, chairman of the Senate Ways and Means Committee. “Nor is this the proper vehicle to do so in.”
The coronavirus pandemic has slammed the Red Sox the same way it’s slammed Massachusetts. In his testimony, Friedman described the impact as “falling off the cliff.”
More than half of games were cancelled, and those to be played will have no fans, so ticket revenues don’t exist. And who knows what the rest of the shortened season will bring, given the Miami Marlins rash of positive tests? “It’s such a fluid situation,” Friedman said.
Massachusetts could face a deficit of as much as $8 billion from the pandemic, and realize more than $35 million in sporting betting taxes.
For those reasons, Governor Charlie Baker supports legislation to approve sports betting, according to Boston.com.
“We wanted to give Massachusetts the ability to have people play here rather than playing elsewhere,” Baker said.
Because of Baker’s support, many expect a sports betting bill to be revived later this year.
In addition to the sponsorship and advertising dollars the Red Sox could enjoy, the team may get some revenue from Major League Baseball due to the requirement in the pending law to use official data from the league, including statistics, results, outcomes and other info provided to sportsbooks to determine the outcome of a wager.
“The vendor would act in behalf of the league with the operator paying MLB. That would provide is with money indirectly distributed to the teams,” Friedman said.
Should the state tack on a codicil that permits a sportsbook at Fenway Park—there is nothing of that sort on the legislative drawing board—the team could realize leasing revenue.
Whether the commonwealth and the Red Sox get their wish remains to be seen.
House Bill 4887 passed the economic development bill 156-3 on July 28, according to the state legislative action calendar. The vote came two days after reviewing more than 500 amendments. Tucked away is sports betting language. The bill establishes three types of licenses for mobile and retail sports betting: online and in-person wagering at land-based casinos; in-person wagering at race tracks; and online only.
To qualify for online only, an operator had to offer daily fantasy sports in Massachusetts for a year and also offer sports betting in at least two other states. The Massachusetts Gaming Commission also offered such licenses to operators that have sportsbooks in at least two other states for more than a year. DraftKings and FanDuel meet those requirements, as do GVC and MGM.
An application fee of $250,000 covers the first five-year period, and can be renewed for another five years for $100,000. Gross sports wagering receipts will be taxed at 15 percent of adjusted gross sports wagering receipts, plus an additional 1 percent for events that take place in Massachusetts.
“As we confront an economic downturn and budget shortfalls, this is a unique moment for the Legislature to act to protect consumers, create jobs, and bring an infusion of tens of millions of dollars in much-needed revenues to the Commonwealth,” DraftKings, FanDuel, MGM and the Boston Red Sox said in a joint statement, according to the Boston Herald.
The bill allows in-game wagering, including the individual performance statistics of athletes. The bill would also legalize single-game bets, pools, proposition bets, according to MassLive.
Restaurant and bar owners who want to be cleared for sports wagering operating under Fair Play Massachusetts say the House and Senate bills currently leave them out. Ryan McCollum, spokesman for Fair Play Massachusetts, said pushing the bill to the fall might give lawmakers more time to discuss the market.
”Whenever you’re introducing a new industry, you do not want to leave out folks who should be incorporated, such as small local businesses, and you don’t want to necessarily make monopolies,” McCollum said. “It’s not just about leaving them out. It can hurt them.”
