Here’s why legalized sports betting in Massachusetts is already a failure


The gambling state has become the 31st to legalize sports betting, but the industry is waiting for bigger prizes like California, Texas and Florida.

SPort punters in Massachusetts will soon be able to ditch their local bookmaker for a legal one. Governor Charlie Baker signed Massachusetts’ sports betting law into law on Wednesday, making the Bay State the 31st in the nation to legalize sports betting.

“Our administration first introduced legislation to legalize sports betting in the Commonwealth several years ago, and I am pleased to be able to sign this bill into law today,” Governor Baker said in a statement. . “We appreciate the dedication and compromise the Legislature has shown on this issue, and we look forward to supporting the work of the Massachusetts Gaming Commission on the responsible implementation of the law over the coming months.”

The Massachusetts Sports Wagering Act was not a safe bet this year. He passed the state Senate by a 36-4 vote after elected officials had an all-nighter in the last legislative session of 2021-22. For two years, state lawmakers couldn’t agree on a bill, and until the end of July, Governor Baker openly discussed how it might not make it to his office. . Now that the bill has become law, the state Gaming Commission will begin work on implementation and licensing, a process that is expected to take months.

Lawmakers estimate that legal sports betting will bring in $60 million in annual tax revenue, thanks to a 15% tax on in-person sports betting and a 20% tax on mobile betting. Once companies have been licensed, betting can take place at land-based casinos, racetracks, and through mobile apps. The state Gaming Commission will regulate the industry and is authorized to license up to seven companies that do not yet have a casino in Massachusetts. The state expects to generate up to $80 million in license fees, which must be renewed every five years.

State Senator Eric Lesser, one of the bill’s sponsors, said on a Massachusetts radio show Zolak and Bertrand show that lawmakers are hoping legal sports betting could kick off before the Super Bowl, the nation’s biggest single-game betting event.

“I want the public to understand, like we as commissioners are starting to understand, that this is not something that’s going to happen overnight,” Commissioner Brad Hill told State House News. “It’s going to take a little longer than expected, and that’s fine with me because I want to do it right.”

On Tuesday, Massachusetts House Speaker Ronald Mariano said it would be “disappointing” if the implementation took too long. “You have two hotels ready to open doors as quickly as possible,” he said. “I still know [Boston] built a room, and I know MGM [Springfield] depends on it to increase their bottom line. So hopefully we can make it work.

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Getting it right took a long time. Brendan Bussmann, the managing partner of B Global, a consulting firm focused on gaming, sports and hospitality, says Massachusetts is finally joining the majority of states – 31 plus Washington, D.C. – that have some form of betting legal athletes. ” It was time ; no state debated it longer than Massachusetts,” Bussmann says, explaining that one version of the bill was debated for several legislative sessions before a compromise bill passed. “It’s a great sporting state with the Celtics, Patriots and Bruins. All of these teams have been bet over time, but instead of the bartender taking your bet [illegally] now you can do it on your phone.

Only 16 states have not reformed their laws since 2018, when the Supreme Court struck down the Professional and Amateur Sports Protection Act. (PASPA had effectively made sports betting illegal, except in Nevada and a few other states.) Maine, Ohio, Nebraska, and Kansas have legalized sports betting but have yet to launch legal markets.

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Massachusetts has a much more reasonable tax rate, 20% on mobile betting, compared to New Hampshire and New York, which tax mobile sports betting at 50%. But Bussmann thinks the state’s legal industry will struggle to compete with the illicit market, especially around college sporting events. The law does not allow betting on college games in the state except during tournaments, such as during March Madness. “The college betting provision is just plain stupid,” says Bussmann. “That makes absolutely no sense.”

Another regulatory hurdle is that gaming companies cannot deduct promotions, which are necessary costs to attract customers to a certain app in a competitive environment.

“There will always be a black market,” adds Bussmann, thanks to the “handcuffs” of taxes and regulations that legal operators must contend with. “An operator who wants to do it right not only has the privilege of paying 20% ​​taxes, but you are looking at 30% to 40% additional costs beyond what illegal operators pay in marketing.”

At some point, Bussmann says, more states will have to lower their tax rates and step up enforcement against illegal operators, “which nobody seems to want to do and hasn’t done for years.”

When asked if the new Massachusetts law was a political failure, Bussmann replied, “To be determined.”

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Fitch Ratings analyst Colin Mansfield says Massachusetts’ long-delayed move to legalize sports betting is good for the industry, but it’s not one of the big states like California and Texas, which are still far from legalizing their own betting markets.

“We see it positively, but it’s on the fringe,” Mansfield says. The average American spends $50 a year on sports betting, so if you extrapolate that to Massachusetts’ population of 6.8 million, the state has a potential market size of around $350 million in revenue. rough game, says Mansfield. “Nothing that’s going to move the needle for any of the game companies,” he says.

But Massachusetts is a “gaming-rich” state with one of the highest per capita spending on lottery tickets, Mansfield says. So if you are a betting man or woman, the odds could be in your favor.


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