Latest Gambling News: Massachusetts Senate Rejects Sports-Betting Tax Rate Increase, and more

Kat Pilkington

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May 27, 2024

Catch up on six of the stories our gambling compliance analysts have covered lately, and stay up-to-date on the latest news.

Massachusetts Senate Rejects Sports-Betting Tax Rate Increase

Massachusetts lawmakers quickly rejected a proposal Thursday (May 23) that would have made the state one of the highest taxed sports-betting jurisdictions in the United States.

Senator John Keenan, a Democrat, proposed an amendment to the state’s annual budget bill that would have increased the tax rate on mobile sports betting from its current 20 percent of adjusted gross revenue to 51 percent, which would have tied the state for the highest sports-betting tax in the U.S.

The proposal was one of about 1,100 amendments from individual legislators to add to the budget, and after a brief argument by Keenan on the Senate floor Thursday, senators immediately voted down the amendment by a voice vote.

Proposed increases to sports-betting tax rates have become more common over the last year, led by Ohio doubling the state’s tax rate from 10 to 20 percent in its state budget last summer.

Illinois lawmakers are currently weighing a proposal from Democratic Governor J.B. Pritzker to increase the sports-betting tax from 15 percent to 35 percent as part of the state budget that could be voted on in the coming days.

“Most of the pushback, of course, is by the sportsbook companies that have made literally tens of millions of dollars from the state of Illinois,” Pritzker said during a press conference Thursday. “All we’re asking is that they pay a little more of their fair share.”

Fanatics Fined $10,000 For Bets On Massachusetts Colleges

Fanatics Betting and Gaming has been fined $10,000 as part of a settlement agreement over accepting a wager on a college football game involving a Massachusetts university.

The Massachusetts Gaming Commission voted 4-0 Thursday (May 23) to impose the fine on Fanatics, which accepted a $50 futures bet on December 5, 2023, on the Fenway Bowl played by Boston College and Southern Methodist University in December.

Then on December 6, Fanatics noticed the error, canceled the wager, and refunded the customer's money. The bet was placed well in advance of the December 28 football game.

Massachusetts gaming regulations do not allow a wager on in-state colleges unless they are participating in a tournament with four or more teams.

“The goal of the commission … was to make sure we set the goal posts and once the goalposts were set that it was followed,” said MGC interim chair Jordan Maynard. “I see that here. I think it was great work.”

Prior to the vote, commissioner Nakisha Skinner requested a complete copy of Fanatics permissible market policy be included in the record, “especially since they have listed it as a remedial measure that they’ve taken.”

Betr Receives Initial Approval For Maryland License

Betr Holdings received initial approval Thursday (May 23) from the Maryland Lottery & Gaming Control Commission for sports-betting license, with final license approval required from the Sports Wagering Application Review Commission.

In presenting Betr’s application to the commission, John Mooney, the managing director of the lottery’s regulatory oversight division, described the company’s financial performance during its brig history as “poor.” He noted that Betr has incurred significant operating losses in its start-up phase while generating limited revenue.

In 2023, Betr reported revenue of $23.2m, and a net loss of $32m driven by increased marketing and promotional incentives. Currently, Betr operates in Ohio and Virginia, but the company did exit Massachusetts earlier this year.

Mooney said Betr executives expected to report a loss this year before reaching profitability in 2025. Betr also reported $34.8m in cash reserves, which gave regulators confidence they could “fund their operations for the foreseeable future.”

Commissioner Harold Hodges asked how Mooney could give them a positive opinion when Betr exhibited such a poor performance financially.

“They have financial backers that are willing to put the money in,” Mooney said. “It is not uncommon for any business … but particularly in the sports wagering field that companies will lose significant amounts of money for a period of time.”

He cited DraftKings and FanDuel, which both operate in Maryland, as examples of companies that took years to report profits but had financial backing to reach profitability.

Pennsylvania Fines Casino $125,000 For Underage Gambling

The Pennsylvania Gaming Control Board (PGCB) approved a consent agreement Thursday (May 22) with Wind Creek Bethlehem that included a $125,000 fine for underage access to the casino floor, with the board chair telling company executives that she will see them again next month.

“I will tell you; you are having a licensing renewal hearing next month,” said PGCB chair Denise Smyler. “We will probably be revisiting this issue at that time.”

The ten incidents, which occurred between November 26, 2021 and September 24, 2023, involved 11 individuals between the ages of 18 and 20, who gained access to the casino floor and were seen gambling or drinking alcohol.

One of the incidents highlighted in the consent agreement involved an underage patron presenting an identification to security personnel that was scanned but was allowed access after state police did not respond to a request to validate the license.

A 19-year-old female who was with a group of three other patrons used a legitimate identification from a 41-year-old individual to gain access to the casino for more than an hour before being approached by security.

Commissioner Shawn Dillion asked Wind Creek executives if there had been any more incidents since the violations mentioned in the consent agreement dated March 28, 2024.

“We are aware of aware of minors on the floor since that time, however, there were no incidents where minors were gaming or drinking since that time,” said Glen Granitez, director of security with Wind Creek Bethlehem.

Pennsylvania Gaming Regulators Approve GAN Merger

GAN Ltd’s merger with Sega Sammy Creation, a subsidiary of Sega Sammy Holdings, received unanimous approval Thursday (May 22) from the Pennsylvania Gaming Control Board (PGCB).

Sega Sammy Creation is currently an applicant for a slot machine manufacturer license in Pennsylvania, while GAN, a wholly-owned subsidiary of GAN UK Ltd, is licensed as both a gaming and sports wagering manufacturer in the state.

GAN will survive the merger as a wholly-owned subsidiary of Sega Sammy Creation. No closing date has yet to be scheduled but the companies expect it to close either in late 2024 or early 2025.

GAN has partnerships with Encore Boston Harbor, owned by Wynn Resorts, Island View Casino Resort in Mississippi, and Oaklawn Racing Casino Resort in Arkansas.

In October, Nevada gaming regulators signed off on a conditional two-year license for GAN that allows them to replace the sports-betting platform used by Red Rock Resorts’ southern Nevada sportsbooks. The software is expected to gain final approval by Gaming Laboratories International in early November and then it will be submitted to Nevada for testing.

Louisiana Seeks To Remove Ban On Casino Campaign Contributions

A prohibition on casino campaign contributions to Louisiana lawmakers dates back almost three decades and was put in place to prevent possible corruption, but an amendment added to House Bill 906 would lift that ban.

The Senate Finance Committee voted 5-4 on Monday (May 20) to approve the amended bill and sent it to the legislative bureau. If approved by the Senate, the measure would be sent to the House for their approval.

“I believe we are at the point where we need to correct that unconstitutional legislation,” said Republican state senator Thomas Pressly, who authored the amendment and is a member of the Finance Committee.

When the prohibition was put in place, Pressly said, there were concerns that casinos would come in and try to overwhelm the legislature and their actions.

“It is time to move past that,” Pressly said. “We certainly haven’t seen that. It would put them in line with every other entity in the state and allow them to participate in the political process.”

Republican Representative Mark Wright, who introduced the bill that revises the state’s Campaign Finance Disclosure Act, said he would not oppose the amendment because it was up to the committee to decide whether to amend his legislation.

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