With Massachusetts seemingly on the precipice of becoming the latest US state to allow online and retail sports betting, regulators warn that the enterprise is at least several months away from an official launch.
An official with the Massachusetts Gaming Commission (MGC) said the agency would need time to establish rules and conduct two separate sports betting studies by year’s end.
Both factors could mean a launch in 2023 is more likely.
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An 11th Hour Compromise
After months of debate, lawmakers in each chamber of the state legislature — officially, the Massachusetts General Court — came up with very different visions for what sports betting should look like in the Baked Bean State. Separate bills in the House of Representatives and the Senate were considered but never made it out of committee.
Then, a compromise bill — H.5164, co-sponsored by Reps. Daniel Cahill (D-Lynn) and Steven Howitt (R-Seekonk) — won passage in the House and Senate in the early hours of August 1, the last day of the legislative session. The bill cleared the Senate 36-4 before passing in the House on a 151-2 vote.
Republican Governor Charlie Baker has 10 days following the bill’s passage to sign it into law. Since the legislature is no longer in session, the bill won’t become law without his signature — a move known as a “pocket veto.” But Baker is widely expected to sign the measure.
Up to 20 Massachusetts Sportsbooks Possible
Under H 5164, either 19 or 20 sportsbooks in total could be permitted to set up shop in Massachusetts. Five sportsbooks would be retail establishments, while the remaining 14 or 15 would be mobile licenses — seven of which are not tethered to a land-based casino or racetrack.
The three commercial casinos in the state — Encore Boston Harbor, MGM Springfield, and Plainridge Park Casino — would each be allowed to open one retail sportsbook and could have two skins for online sports betting in Massachusetts.
Racetracks with live horse racing or that offer simulcast wagering on horse or greyhound racing would also each be allowed to open a retail sportsbook and have one online skin. Raynham Park and Suffolk Downs are two simulcast facilities in the state, while Plainridge runs the state’s only track with live horse racing.
Plainridge could decide to be licensed with the MGC as either a casino or a racetrack, but not both. Since Plainridge would get an extra online skin if they go the casino route, the state will likely have 20 sportsbooks in total rather than 19.
Other Provisions in the Bill
The legislation allows operators to secure a one-year temporary license for a $1 million fee. A permanent license will cost $5 million and have a five-year term, after which the operator can renew it for an additional five years for another $5 million.
The sports betting bill also:
- Establishes a tax rate of 15% for retail sports betting and 20% for online wagers
- Allows wagering on college sports, but not for matches involving in-state teams (wagering would be allowed for an in-state team participating in a “collegiate tournament” like March Madness)
- Places no restrictions on advertising, but operators cannot deduct promotional costs from taxable revenue
At first blush, the compromise bill more closely resembles a separate bill under consideration earlier this year in the House — although a few parts of an earlier Senate bill were also rolled in.
The House bill, H.3974, called for a 12.5% tax rate on retail sports revenue and 15% on mobile revenue. The Senate considered legislation (S.269) to enact a 20% tax on retail and 35% on mobile.
House lawmakers originally called for allowing the three commercial casinos to each have three skins for online wagering, whereas the Senate thought each casino should only get one skin. The upper chamber also called for restrictions on advertising.
Why Sports Betting is Unlikely Before 2023
We’re going to do this right. In order for us to do this right, we need to take our time a little bit to ensure that we’re doing it right.
Although Baker is expected to sign the bill into law, sports betting is unlikely to launch in the Bay State before 2023 for several reasons.
The MSC will promulgate new rules for the sports betting enterprise, which will likely take months. The commission has also been tasked with conducting two separate studies and reporting their findings by December 31, 2022. The MSC’s studies will include:
- The participation of minority-, women-, and veteran-owned businesses in the sports wagering industry
- The feasibility of allowing retail locations, such as bars and restaurants, to operate sports wagering kiosks
During an open meeting of the MSC on August 4, Commissioner Bradford Hill warned that sports betting “isn’t something that’s going to happen overnight” in Massachusetts.
“We’re going to do this right,” Hill said. “In order for us to do this right, we need to take our time a little bit to ensure that we’re doing it right.”
“I’ve seen some quotes in the newspaper from the public and others that they hope to have this thing up and running in a very short amount of time. I just want to be clear — this is going to take a little longer than people probably anticipate. I’m okay with that because I want to do it right.”
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Several Operators Likely to Launch in Massachusetts
Nevertheless, Boston-based DraftKings — one of several operators expected to deploy in the state — applauded the news.
Big
DraftKings</a>' home state news--the Massachusetts legislature passed sports betting legislation, pending executive action, that would authorize sports wagering in the Commonwealth. <a href="https://t.co/CHxTy89toK">pic.twitter.com/CHxTy89toK</a></p>— DraftKings News (DraftKingsNews) August 1, 2022
“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 tweet on August 1. He added that the company was “hopeful” that Baker would sign the bill into law.
FanDuel — which, like DraftKings, is already active in neighboring Connecticut and New York, is also expected to launch in the Bay State.
BetMGM and WynnBET are prominent market entrants, partnering with MGM Springfield and Encore Boston Harbor, respectively. Barstool Sportsbook is also likely to launch at Plainridge, as the casino owns a stake in Barstool’s parent, Penn Entertainment (formerly Penn National).
