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Battle Brewing for Control of Massachusetts Legal Sports Betting Scene

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Battle Brewing for Control of Massachusetts Legal Sports Betting Scene
An American flag flies over the Fenway Park grandstand in Boston, Massachusetts. Maddie Meyer/Getty Images/AFP

Legal sports betting hasn’t even been legalized in the state of Massachusetts and yet a battle for control over the platform already exists between its current brick-and-mortar casinos and mobile operators that don’t yet have a presence in the state.

The battle is being waged by a pair of existing brick-and-mortar operators in Massachusetts who have cited their financial commitment to the state and their establishment of a “robust brick and mortar gaming industry”. Penn National and Wynn Resorts fear is that all that they have built would immediately be threatened if a rush of online-only operators, who so far have contributed nothing to the Massachusetts economy, were allowed to flood the market there.

A Little Background on Where Things Stand in Massachusetts

The idea of legal sports betting in Massachusetts has certainly been gaining steam but hasn’t totally come to fruition just yet. The House passed an economic development bill this year and included legal sports betting. The Senate rejected that proposal but has signaled that is still open to a legal platform going forward.

Now, it is up to a panel of three representatives and three senators, who have displayed a willingness to proceed, to get something in writing in a jobs bill that will be presented in early 2021. The desire for legal sports betting is there but the wording and an idea of just what the platform will look like haven’t quite been decided upon.

The Argument for Casinos

Leaders from Penn National and Wynn Resorts are arguing that their longstanding investment in the state should give them control over legal sports betting. In a joint letter penned by Plainridge Park GM Lance George, which is a Penn National property and Encore Boston Harbor President Brian Gullbrants in October, the Companies stated that:

“Those that make actual investments in Massachusetts, assume legitimate risk and incur costs to provide a service or benefit in the Commonwealth should be enfranchised under this legislation. Conversely, automatic windfalls to industries or interests which assume no new costs, risks or obligations as a result of this type of expansion are not only harmful to the gaming industry’s interests but even more so to overall public interest.”

The suggestion is that each of the existing brick-and-mortar facilities, which includes MGM Resorts, get three sports betting licenses each prior to any other licenses being distributed. It is their attempt to ensure their share of the online business platform when it launches, likely sometime in 2021.

Penn National’s $250 million to build its Plainville slots parlor in 2015 as well as another $7 million investment in other properties to go along with Wynn’s $2.6 billion investment to build Everest Casino is what the companies feel should be taken into account. So too should the jobs those companies have created.

A Bit of Urgency

There are a couple of factors driving the urgency in Massachusetts. First off is the fact that all of their neighboring states already have robust retail and mobile betting platforms – ones that are drawing Massachusetts bettors to them in droves. Secondly is the realization that mobile sites have become the bread and butter of the legal sports betting industry and not brick and mortar facilities.

“Sports wagering expansion by our neighboring states substantially affects the competitive posture of the gaming industry here in the Commonwealth and places us at a strong disadvantage, with Massachusetts jobs, revenues, and economic activity at stake,” PPC and Encore continued in the joint statement.

Massachusetts will be a huge market. With teams in all four major leagues in North American professional sports and with a rabid fan-base, every day the platform is on hold is another day in which revenues are paused and tax coffers are missing out.

So What are Penn National and Wynn Worried About?

The current legislation that is being worked on authorizes four mobile operators (that currently have no brick-and-mortar affiliation) to launch when the platform goes live. The two DFS behemoths are among the four. Penn National and Wynn hope to control which providers come into the jurisdiction and how much influence the new providers should have.

While competition is seen as a good thing in the market, the DFS providers are expected to come in and immediately suck up a huge percentage of the market share of which Penn National and Wynn want to protect. Even though one of the two has its headquarters in Massachusetts, Penn National and Wynn are still trying to limit their presence in the state.

Massachusetts is already behind in its launch of legal sports betting and needs to move forward fast. It remains to be seen if legislators will grant the current providers’ wishes to control the platform. Either way, look for legal sports betting to launch in 2021 in Massachusetts. What form it takes is still up in the air.