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Buzz Kill: Massachusetts Senate Ends State’s Legal Sports Betting Aspirations For Now

Buzz Kill: Massachusetts Senate Ends State’s Legal Sports Betting Aspirations For Now

After weeks of optimism that a legal sports betting platform would soon be coming to Massachusetts, the plans were brought to an abrupt halt Wednesday by state Senate. The roller coaster that has been the negotiation process has been put on hold for now, despite some serious interest and a recognition that legal betting could ease some of the state’s financial peril through tax revenue generated by the platform.

Bill H 4887 and an amended Bill S 2842 were tabled this week as part of a jobs and economic development package and could have resulted in funding for various projects and social programs for the state. But both were shelved, at least for now. While there still seems to be an appetite for legal sports betting among legislators of Massachusetts, there was acknowledgment that entities such as the Massachusetts Gaming Commission and the state lottery have to be more involved.

Simply put, the Massachusetts House was ready to move forward but the Senate put the brakes on its potential. “I believe that, certainly, the time is close and we are going to be tackling this issue,” Senate Ways and Means Chairman Michael Rodrigues said Wednesday. “But the time is not now, nor is this the proper vehicle to do so.”

The Idea Is Not Dead

All along, the idea of legal sports betting faced an uphill climb, largely because of the time restraints facing lawmakers in the state. The formal legislative session officially ended Friday. That said, informal legislative sessions will take place for the rest of the year, meaning that legal sports betting could be discussed further and could potentially be passed by the end of the year. “I have been assured that we will be discussing this in the next several weeks,” said Sen. Michael Brady, who submitted the sports betting amendment last week.

Governor Charlie Baker went on record just this week saying, “… I absolutely believe that, in addition to sort of the cross-border competition issues that would be addressed by doing something here in Massachusetts, it would certainly generate revenue and it would be something that a lot of people would be interested in here at home as opposed to doing across the border. We’d like to see that happen.”

The Work That Was Done

Bill H 4879 was fairly complete – the language of the legislation was basically done. It would have allowed for both retail and mobile betting, college sports wagers, minus in-game prop betting and esports wagers would be welcomed. Official league data would be required for all in-play betting on US sports.

Providers would have paid a $250,000 application fee for a five-year license with a $100,000 renewal fee and the platform would have been taxed at a flat 15% tax rate with an additional tax that provides in-state arenas and stadiums 1% of all betting revenue from events at those venues.

The Issues

The legislation that was presented had its issues. It was seen as a tad restrictive in its language that allowed just three casino operators plus the two biggest DFS providers on the planet to apply for licenses. That language was amended slightly to allow two other licenses to providers that have operated sportsbooks in two US states for more than one year. Still, it remains unclear as to exactly what that part of the legislation would mean.

There was also some debate about the proposed tax rate for a legal betting platform in Massachusetts. Ideas for the tax rate ranged from a fairly standard 15% to a seemingly unreasonable and untenable 50%. Agreement on a tax rate is paramount for a platform to get off the ground.

Another area of disagreement was just what kind of platform the state’s racetracks could launch. The legislation allowed for retail only betting at racetracks but some legislators felt that tracks should be permitted to run online betting as well.

Missing an Opportunity

Although legal sports betting is not quite dead, chances for launch will likely have to wait until 2021. It is a huge disappointment for the rabid fan base that exists in Massachusetts and the Red Sox, Patriots, Celtics, and Bruins that call the state home.

States that presently have a legal sports betting platform are reaping the rewards already with the return of major sports in the country. The tax revenue generated is more important to those states than ever with the COVID-19 bills piling up. The Massachusetts Gaming Commission has estimated that sports betting could generate between $9 million and $61 million in annual state tax revenue.

Eighteen states, including neighboring Rhode Island, New Hampshire, and New York currently have legal sports betting. Fans in Massachusetts will be forced to spend their betting dollars in those states for now. It is just another example of Massachusetts missing an opportunity.