Massachusetts Governor Proposes Sports Betting Bill
A spate of sports betting bills have been filed in the Massachusetts legislature and assigned to committees.
Governor Charlie Baker last week sent a proposed bill, “An Act to Establish Sports Wagering in the Commonwealth” to the legislature that would allow stand-alone online sportsbooks, but allow brick and mortar operations, while taxing the former at 12.5 percent and the latter at 10 percent.
Baker’s comprehensive bill would also include a $100,000 application fee and $500,000 licensing fee. It would put sports betting under the regulatory arm of the Massachusetts Gaming Commission. It would allow sports betting at the state’s three casinos and allow individuals to place bets from their computers or mobile platforms.
Baker’s bill comes about a week after two legislators filed competing bills. The governor’s bill comes just before the deadline for submitting bills for this session.
Governor Baker sent a letter with his bill pointing out that neighboring states, such as Rhode Island, are putting pressure on the Bay State by legalizing sports books. He claims his bill could earn the state a “projected $35 million in revenue” as early as the next fiscal year.
This estimate compares to $27.2 million that an Oxford study by the American Gaming Association predicted would be produced by a 10 percent tax.
Senator Brendan Crighton’s bill SD 903, which is also comprehensive, would allow interactive sports wagering operators to open online operations, whether or not they have a brick and mortar connection. Online operators would pay $1 million to apply and physical sportsbook operators would pay $500,000. All would be taxed at 12.5 percent, which the senator estimates would bring in between $50 million and $70 million annually.
SD 903 allows sports book at the three existing casinos, simulcast racing operations and allow mobile wagering through platforms like DraftKings and FanDuel but not betting on college games—all under the umbrella of the MGC.
Crighton told reporters, “We certainly see (mobile sporting betting) as the future of gaming and if we are going to bring people into legalized sport betting and off of these illegal platforms, we’re going to need to have that component.”
He told the State House News Service: “Every day there are new legislatures out there filing bills and considering things so really it’s time for us to be deliberate but also have a sense of urgency to get something passed this session.”
Both bills would prohibit betting on college sports.
Crighton explained why his bill prohibits college betting, “We heard some concerns from institutions of higher education, in terms of the integrity of their sports. They’re not the billion dollar operations that professional sports leagues are. They’re paid athletes. So we kept Massachusetts college teams exempt. You can’t bet on a Massachusetts college team.”
Jill R. Dorson of Sports Handle wrote last week: “The idea that online sportsbooks should be able to be freestanding seems like an idea that should have come up somewhere earlier, but makes perfect sense considering that DraftKings is headquartered in Boston, and has been lobbying/campaigning in favor of such a structure.”
DraftKings spokesman Jamie Chisholm in a statement last week argued that “Legal, regulated mobile sports betting provides the best mechanism to not only protect consumers, but to eliminate illegal offshore gambling, ensure game integrity, generate new revenue for the Commonwealth and fuel the growth of Massachusetts’ sports-tech sector.”
Lt. Governor Karyn Polito issued a statement supporting the governor. “Over the last seven years, the Massachusetts gaming industry has grown into an economic driver for thousands of jobs associated with construction, hospitality and tourism.” She added, “The Massachusetts Gaming Commission has developed a comprehensive set of regulations, and passing this bill into law will allow the proper oversight of the industry’s next chapter in addition to providing critical support to the Commonwealth’s cities and towns.”
Senator Michael Rush’s competing bill SD110 includes a rare provision that would collected the “integrity fee” or “royalty” of .25 percent that professional sports leagues have sought, but largely been denied in other states. Rush’s bill would further favor the leagues by requiring bookmakers to buy data from them. His bill would allow for college sports betting and have a less expensive application fee than Crighton’s, $100,000 compared to $500,000/$ 1 million. The bill does address tax rates. The MGC would also oversee sports book.
Two other bills that are not considered comprehensive have also been filed. Senator Bruce Tarr’s SD 908 would create a “Special Commission on Sports Gaming.” Senator James Welch’s SD 882 would amend existing laws to include sports betting, and allow existing casinos to offer it, at 6.75 percent tax.
Boston-based online fantasy sports operators DraftKings and FanDuel, which are both lobbying heavily to be allowed to offer sports betting, will undoubtedly oppose a provision that skims some of their profits to pay to the professional sports leagues such as the NFL and MLB, the NBA and the PGA tour have all united to lobby for.
Persons who concern themselves with the social costs of gambling are warning that legalizing sports betting could prove an unhealthy lure for the 2 percent of the population considered problem gamblers and the 8 percent considered at risk.
Victor Matheson, a sports economist and professor at Holy Cross, in an interview with the Boston Herald, warned, “There’s reason to believe that sports gambling is addictive to certain folks. Sports gambling gives the illusion of control and it particularly impacts young men.”
The Boston Herald editorial board later issued this warning: “The act would allow sports wagering lounges at the three licensed casino operations in the commonwealth as well as permitting bettors within the state to place sports wagers from their phones and laptops. In other words it will be everywhere. In this endeavor, elected leaders must not gamble — caution must guide us.”
The nonprofit Massachusetts Council on Compulsive Gambling plans to ask the legislature to earmark some of the expected tax revenue for treatment of problem gambling.
Defending against such criticism, Baker issued this statement: “Our legislation puts forth a series of commonsense proposals to ensure potential licensees are thoroughly vetted and safeguards are in place to protect against problem gambling and illegal activity.”