The coronavirus pandemic in the US has left a wake of destruction in its path – some of which will be seen for years. One of the more glaring, non-human tolls has been on state and local coffers which have been hit hard by budget shortfalls and a lack of funds flowing into them. The state of Massachusetts, which estimates its own $6 billion budget shortfall, is the latest to raise the alarm about their economic situation. That has led to many influencers in the state looking to revisit the viability of legal sports betting as a way to generate a new form of tax revenue. Early estimates have legalized sports betting contributing $50 million in annual revenue for the state.
Somewhat surprisingly, it is obvious that Massachusetts legislators have been thinking about this for some time. Bill H 4879 from the House Committee on Ways and Means has been presented to legislators in the state and appears relatively complete on what a legal betting platform in the state would look like. If legal sports betting is fast-tracked like it is expected to be, Massachusetts would become the third state in the US to legalize sports betting in what has been an insane 2020, after Washington which was the first and Virginia.
Legislators in Massachusetts have been saying all the right things ahead of this attempt to bringing legal sports betting to the state. Governor Charlie Baker is on record as saying that he “absolutely” agrees that sports betting could be a boon for the state’s economy. “We wanted to give Massachusetts the ability to have people play here rather than playing elsewhere,” Baker said last Wednesday when pressed on the issue.
“And 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,” he added. “We’d like to see that happen.”
Bill H 4879 will significantly expand the state’s gaming landscape that currently includes casinos but no sports betting. Under the Bill, Massachusetts’ three casinos. racetracks and daily fantasy platforms would be given the green light to offer sports betting, including a certain Boston-based DFS giant.
Both brick-and-mortar and mobile betting would become legal. There is a provision to allow bets on college sports although in-game prop betting on the kids would be prohibited, at least for now. The tax rate is set at a pretty standard 15% plus an additional tax that provides in-state arenas and stadiums 1% of all betting revenue from events at those venues.
Hopeful betting providers will be compelled to pay a $250,000 application fee for a five-year license with a $100,000 renewal fee. Official league data is required for all in-play betting on US sports and Esports would be legal under the Bill.
Along with the two biggest DFS providers on the planet, which are already operating in Massachusetts, there are a number of big betting providers will likely be lining up for the chance to operate in the sports-crazed state. And why not? Massachusetts is home to a team in all four of North America’s major sports.
Early sportsbook candidates are Barstool, BetMGM, and Penn National, the last two of which already have a presence in Massachusetts. The state can expect a huge rush of other top providers to be knocking on their doors when and if one of the most exciting betting markets in the US opens up.
Time Is of the Essence
Time is ticking on the legislative session in Massachusetts and if no legislation is passed, the idea of legal sports betting for Massachusetts in 2020 is essentially dead. And so is the prospect of gaining any much-needed tax revenue to be used by states. Department of Revenue reports that collections have fallen by $2.25 billion and the state’s tax revenues are down between 13% and 15%. Legislators have until July 31 to get something done in the current session.
It may, or may not be too late for legal sports betting to find a home in Massachusetts this year but 2021 is a definite possibility. Obviously, the start of the MLB season is out of the question but there is still a chance that bettors in Massachusetts will have their day by the start of the NFL season. Massachusetts is moving in the right direction for sports bettors – the speed of which legalization happens is the only question that seems to be up in the air.