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Sports-betting kiosks are likely to remain limited to inside Massachusetts’ three land-based casinos, after a new report has found that any expansion of the self-service wagering terminals into retail locations would result in little added benefit to the state.
The Massachusetts Gaming Commission (MGC) hired Spectrum Gaming in April to conduct a review on the feasibility and potential impact of allowing retail locations, such as convenience stores and bars, to operate sports-betting kiosks.
In 2022, Massachusetts lawmakers approved a bill legalizing sports betting at the state's three commercial casinos, plus through online platforms. Retail sportsbooks at Encore Boston Harbor, MGM Springfield and Plainridge Park Casino opened in January 2023, with online betting beginning in March.
The MGC has scheduled a presentation of the 120-page report for its upcoming meeting on Thursday (November 21), having last week submitted it to the chairs of the House and Senate Joint Committee on Economic Development and Emerging Technologies, Joint Committee on Consumer Protection and Professional Licensure and Joint Committee on Ways and Means.
Consultants at Spectrum Gaming recommended to commissioners and lawmakers that the state “not implement kiosk sports wagering because … there is little to no economic upside for kiosk hosts and the (state) itself while there is an increased risk of negative social impacts”.
“The pervading sense from the experts interviews is that the most vulnerable community members will bear the burden of expanded gaming, with any economic benefits being unlikely to reach those who are doing the helping,” the report found.
In addition, Spectrum researchers cautioned that the integration of gambling kiosks in public spaces would shrink the number of gambling-free spaces for families and people in recovery, and it would increase youth exposure to gambling advertisements.
“These factors are understood to increase the risk of future gambling harm for those exposed youth,” the report said.
Perhaps further limiting the upside potential for kiosks in retail locations is that online and mobile sports betting have been well entrenched before the first kiosk could be installed in Massachusetts.
“I see limited deployment and use of betting kiosks. It’s counter-intuitive, I believe,” Ronnie Jones, a gaming regulatory consultant and former chair of the Louisiana Gaming Control Board (LGCB), told Vixio GamblingCompliance on Tuesday (November 19).
“Why would I get up from my barstool and walk to a kiosk to place a bet on the [New Orleans] Saints when I can remain comfortably on my barstool with my cocktail in one hand and my mobile device in the other, making a bet on one of my sports-betting apps. It just doesn't make any sense to me."
Jones told Vixio that he “conveyed that sentiment to the sponsor of the sports-betting bill in Louisiana when he called to get my opinion”.
“But the legislature authorized kiosks in bars and restaurants anyway,” Jones said. “The move was pushed in part by the owners of those establishments where the kiosks would have been permitted. Others have suggested that the manufacturers of kiosk hardware and operating systems also pushed hard for their deployment.
“Inexplicably the bill which became law put the regulation of the kiosks under the Louisiana Lottery rather than the Gaming Control Board,” he added. “That made no sense to the lottery or the board but that's what the bill did.”
In Louisiana, the state lottery has been unable to launch a network of kiosks at retail businesses alongside a lottery-run mobile sportsbook, as authorized under a 2021 law that also included provisions for sports betting through casinos and affiliated online platforms.
The Louisiana Lottery Corporation did hold a procurement process for a partner to support the operation, only for BetMGM to pull out due to concerns over its economic viability.
“Within a year the Louisiana Lottery CEO essentially signed the death warrant for the kiosks when BetMGM backed out of their initial proposal to provide the devices and technology,” Jones said. “The lottery’s CEO said that her organization did not have the ‘bandwidth’ to set up infrastructure for kiosk use.”
“Consequently, I suspect kiosks are DOA in Louisiana,” Jones said.
It is a similar story in Oregon, where sports-betting kiosks were part of the lottery’s preliminary plans after the state legalized online sports betting in August 2019, but they were never rolled out into retail locations.
“We have explored kiosks in the past, and it didn’t make financial sense to offer them at this time,” Oregon Lottery spokeswoman Melanie Mesaros told Vixio in an email.
The report submitted to the MGC focuses on three states where self-service betting kiosks operate in retail locations.
In Montana, the state lottery oversees the Sports Bet Montana network of kiosks in bars and restaurants, while the Ohio Lottery oversees a structure that involves licensed private companies as kiosk operators.
The Spectrum report highlighted just how modest a return those kiosks generate in Ohio.
In 2023, Ohio generated only $1.3m in gross sports-betting revenue from an average of 892 kiosks across the state. The retailer’s share of this was less than $200,000, amounting to an average of less than $225 in revenue per retailer annually.
In contrast, the Ohio Casino Control Commission reported $22m in revenue from retail sportsbooks and $914m from digital sports betting last year, meaning kiosks accounted for barely more than 0.1 percent of total sports-betting revenue in the state.
The report also found that, in Ohio, regulatory costs of $650,000 exceed the $305,000 in state tax revenue from kiosks. Last year, more than half of all sports wagering kiosk partnerships that ended did so due to a lack of sales.
Kiosk sports betting is relatively new in the United States, with Montana and the District of Columbia offering it for four years, while it has been around for less than two years in Ohio.
Earlier this week, Caesars Sportsbook began to roll out sports-betting kiosks in 48 businesses in the District of Columbia, having been selected earlier this year by the D.C. Office of Lottery and Gaming to assume operation of wagering kiosks from the DC Lottery.
The self-service kiosks also accept cash deposits to Caesars Sportsbook online accounts.
“We appreciate the Office of Lottery and Gaming for providing us the opportunity to further our connection with sports fans in our nation’s capital,” Eric Hession, president of Caesars Digital, said in a statement. “Our self-service betting kiosks are an excellent addition to our sports wagering options in D.C.”
