The latest issue facing the Massachusetts Gaming Commission (MGC) pertains to a requirement that racetracks and off-track betting (OTB) venues spend at least $7.5 million in upgrading their facilities as a condition to retain their license to develop a sportsbook. The regulators have received opposition from the track industry because of the obligation.
The Massachusetts sports betting law requires a so-called Category 2 licensee—racetracks or simulcast locations—to make the capital investment within three years of acquiring a permit. A Category 2 license allows a track or OTB to open a retail sportsbook and to offer mobile wagering through an online sportsbook, according to Covers.
In Massachusetts, Raynham Park and Suffolk Downs qualify as the only tracks. Raynham Park has a partnership with Caesars Sportsbook for in-person wagering, while Suffolk Downs has several horse-racing partnerships, including with FanDuel.
Under a proposed regulation the MGC is scheduled to support a plan for spending on a Category 2 sportsbook and its related infrastructure, and that plan must include an affirmative action program. After licensure, failure to meet the standards could result in revocation.
Raynham Park has complained in writing of overreach.
“[The letter] contains a general objection to promulgating these regulations, but the specific objections seem to focus on the requirements dealing with equal opportunity and diversity, equity and inclusion,” Commissioner Nakisha Skinner said during an April 13 meeting.
The decision to postpone any decision followed a request by Suffolk Downs for more time to digest the proposed regulation.
The MGC will return to the potential rules later this month or in early May. The commission has yet to issue a Category 2 license, although it could begin deliberations in the next few weeks.
The cost of designing, preparing, and constructing the site would all count against the $7.5-million investment requirement by a Category 2 licensee. But not land-purchase costs, legal fees, and marketing expenses.
But when asked, the regulators said design and construction costs already spent will not count. The state sports-betting law says the money must be expended after the issuance of a license.
“If we’re going to move forward, I think I’d like to have a more detailed discussion,” MGC Chair Cathy Judd-Stein said.
