In a last-minute deal that at least one gaming analyst believes is not ideal, Massachusetts lawmakers were able to approve a sports-betting bill and hand over the reins to the Massachusetts Gaming Commission (MGC) to implement the legislation.
The measure known as “An Act Regulating Sports Wagering,” which was passed early Monday (August 1), now awaits a signature from Republican Governor Charlie Baker and then regulations need to be crafted and approved by the state gaming commission before betting begins.
The bill represented a compromise after difficult negotiations between House and Senate members assigned to a conference committee formed to reconcile separate proposals passed by both chambers in 2021 and earlier this year. Baker, who has consistently expressed support for legalizing sports betting, has ten days to act on the bill.
Tom Mills, a spokesman for the MGC, told VIXIO GamblingCompliance early Monday that regulators already are reviewing the bill.
The commission is empowered under the bill to adopt implementing regulations on an emergency basis, and it is expressly mandated to prohibit certain advertising and marketing practices, specify the types of bets permitted, establish responsible gaming protections, and establish a licensing framework. The MGC also must establish an annual research agenda related to sports wagering, including an assessment of the impact on problem gambling.
“Over the last several years we have been monitoring legislation that has designated the MGC as regulator of a Massachusetts sports wagering industry, and staff have been doing their due diligence in order to proceed swiftly should a proposal be signed into law,” Mills said.
Mills said the commission will begin discussions related to the legislation at its next public meeting, “which is anticipated to take place this Thursday.”
The MGC already appears to have done its homework, going as far as to release a preliminary report last year on sports betting.
Although the House and Senate conference committee ended its negotiations with a successful compromise, “that still doesn’t make an ideal bill but as some will view it, a win is a win,” Barry Jonas, a gaming analyst with Truist Securities, wrote in a research note.
Jonas noted the bill imposes a tax on retail sports wagering at 15 percent, with mobile taxed at 20 percent, but deductions will be limited to federal excise tax payments and not promotional credits or bonuses.
He also noted that advertising standards will be determined by the gaming commission after a proposed whistle-to-whistle ban on sports-betting ads during live broadcasts did not emerge from negotiations.
“While a win is a win, it does not mean that it is the best,” Jonas wrote, while conceding that other nearby states have set higher tax rates.
“After multiple years of debate, you would think that the structure would be better but consider what New York and New Hampshire have, it could be considered reasonable but far from a national model,” Jonas wrote, adding that the “college provision alone provides proof of that.”
Wagering on college sports is allowed in the final bill sent to the governor but bets on events involving Massachusetts college teams are prohibited, with the exception of when they are competing in college tournaments.
Collegiate betting was one of the most divisive policy issues with House Speaker Ron Mariano, a Democrat, last week warning his colleagues that any final bill banning college betting outright would not be able to pass. Democratic Senate President Karen Spilka, in contrast, urged senators not to include college betting in the final bill.
“The commission now has the task to implement this bill,” Jonas said. “No commission has or will be in a better position to implement a structure in a meaningful way because they have been preparing for it for years.”
Among the responsible gambling provisions the MGC must include in its regulations is a requirement for all operators to “assess, prevent and address problem gaming by an operator’s consumers.”
“Legalizing sports betting brings an urgent need for additional protections,” said Marlene Warner, executive director of the Massachusetts Council on Gaming and Health.
Warner added that “innovative approaches to responsible gambling remain critical for encouraging safe play and offering support to those who need it.”
“When the Commonwealth first legalized casino gambling (in 2011), lawmakers mandated facilities to have on-site staff to prevent problem gambling,” Warner said. “A similar program should be available to audiences who will be gambling remotely.”
For several years, the state’s three casinos, five professional sports teams and sports-betting operators have lobbied Massachusetts lawmakers for legalization of sports betting.
Last week, executives from the state’s three casinos sent a letter to members of the conference committee imploring them “to seize on the opportunity to level the playing field in this hyper-competitive industry.”
On Monday, Northscott Grounsell, vice president and general manager for Penn National Gaming's Plainridge Park Casino, said he was pleased Massachusetts had joined the ranks of the 36 states to have legalized sports betting.
“We look forward to working with the [Massachusetts Gaming Commission] to open a retail sportsbook at Plainridge Park Casino and to launch our mobile app as soon as possible,” Grounsell said.
Craig Billings, CEO of Wynn Resorts, said the company's next step is to work with the commission to apply to provide sports betting. The company has developed its WynnBET Sports Bar at Encore Boston Harbor and plans to offer mobile wagering through its WynnBET app.
“The decision to legalize sports betting in Massachusetts is welcome news to sports fans who will soon be able to legally wager on sports, as well as the state, which will reap the benefits of incremental jobs and tax revenue,” Billings said in a statement.
Chris Kelley, president and COO of MGM Resorts International’s northeast division, believes a legal sports-betting market will allow the state to “repatriate the revenue and jobs currently being lost to neighboring states and the illegal betting market.”
Sports betting in Massachusetts is expected to generate an estimated $60m in annual tax revenue, in addition to $70m to $80m in initial licensing fees, according to the bill.
Kelly said the MGM Springfield casino plans to provide “an immersive, world-class sports watching and betting experience” within its TAP Sports Bar on the property.
Boston-based DraftKings also celebrated the compromise reached on sports betting, which includes up to seven untethered licenses for mobile sportsbook operators.
“We are thrilled that our home state has acted to protect consumers, create jobs and grow revenue in the Commonwealth,” DraftKings CEO Jason Robins said in a statement released early Monday. “We are hopeful that the legislature will move to quickly pass this and Governor Baker will sign it into law.”