Massachusetts Governor Files Sports Betting Bill Ahead of Legislature Deadline

It’s been a busy week for lawmakers in Massachusetts as they rush to introduce legislation for the 2019 session. No fewer than four sports betting bills headed through the legal pipelines ahead of the Friday deadline this week, the last one just eking through at the last minute on Thursday.

It seems, however, that the last bill introduced may make the largest ripples, as it was proposed by none other than the Bay State’s own Governor Charlie Baker.

Baker seems determined to bring sports betting to the state’s table this year and reap the rewards of the potential revenue that a legal and regulated sports betting industry can bring. As such, Governor Baker announced on Thursday that he would be filing An Act to Establish Sports Wagering in the Commonwealth before the deadline.

In a press release, Baker stated:

Expanding Massachusetts’ developing gaming industry to include wagering on professional sports is an opportunity for Massachusetts to invest in local aid while remaining competitive with many other states pursuing similar regulations,” said Governor Baker. “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. We look forward to working with our colleagues in the Legislature to pass this bill into law.”

The Miami Herald states that Baker’s bill would allow the Massachusetts Gaming Commission to license the state’s three licensed casino operators, giving them permission to offer on-site and online betting. Other entities online, including daily fantasy sports operators will also be allowed to apply for sports betting licenses.

What Does Governor Baker’s Sports Betting Bill Entail?

  • An Act to Establish Sports Wagering in the Commonwealth will put a 10% tax on sports betting inside casinos.
  • Online wagers will be taxed at 12.5%
  • The Massachusetts Gaming Commission will oversee the legal sports betting industry. The authority already regulates casino gambling.
  • The bill does not include any form of ‘integrity fees’ that major sports leagues have been urging state governments to add to their legislation.
  • A minimum licensing fee of $500,000 will be charged for a five year term. Operators will also pay a $100,000 application fee for the license.
  • Daily Fantasy Sports (DFS) will also be subject to the 12% tax rate in order to create a level playing field with other sectors. Although DFS is legal in the state, the industry is currently untaxed.
  • No betting on college or amateur sporting events will be allowed. Wagering will be restricted to professional sports only.

The Governor has told media outlets that he modeled his proposal on New Jersey’s sports betting legislation. He was impressed with the Garden State’s reports that nearly $1 billion was wagered on sports within the first half a year of the law taking effect. Baker is hopeful that Massachusetts can earn as much as $35 million in revenue in the first fiscal year of legal sports betting.

Delaware and New Jersey were the first states to introduce legal sports betting after the US Supreme Court’s landmark ruling that the Professional and Amateur Sports Protection Act of 1992 was unconstitutional.

Since then, other states have passed their own sports betting laws, including Mississippi, Rhode Island, West Virginia and Pennsylvania.

DraftKings Comments on Governor’s Bill

The Governor’s proposed bill has been called “thoughtful” by daily fantasy sports operator and mobile sportsbook DraftKings, a group based in Boston, thereby considering the state its home turf.

The group’s director of global public affairs, James Chisholm said in a statement:

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.”

In the Meantime, Other Bills Wait in the Wings

Because Baker’s proposed bill was the last one that made it to the finish line before the Friday deadline, it’s only natural that it is currently hot news. But let’s not forget several other sports betting bills, each one from a different sponsor, are headed to state legislature this week.

Senate Docket 908

This bill, introduced by Senator Bruce Tarr, seeks to create “a special commission on sports gaming.”

According to the language of the bill, the purpose of this commission will be to “consider and evaluate the advantages and disadvantages of authorizing sports betting in the Commonwealth, potential statutory and regulatory structures and methodologies for so doing, potential types and amounts of assessment or taxation of such activities, and any and all other relevant issues.”

Key points of SD 908:

  • The creation of a study commission, consisting of 11 people, to study the idea of legal sports betting in Massachusetts.
  • The commission will be granted 180 days to study the issue, after which time it has to report back to the legislature – preferably before the end of this year’s session.

Senate Docket 882

Sponsored by Senator James Welch, SD 882 is described as “An Act Relative to Sports Wagering”. The bill redefines the different gambling license categories.

Key points of SD 882:

  • Land casinos in the Bay State will be allowed to offer sports betting.
  • The understanding is that the bill includes both mobile sports wagering and in-person betting.
  • Category 1 and Category 2 casino licensees will be required to pay a 6.75% tax on sports betting revenue.

Senate Docket 903

Senator Brendon Creighton’s SD 903 seeks to legalize retail and mobile operations.

From the bill, formally titled the “Act to Regulate Sports Wagering”:

“In 2018, the United States Supreme Court struck down the law barring sports betting outside the state of Nevada, therefore allowing other states to partake in it. Therefore the Commonwealth of Massachusetts enacts the following to allow sports betting to fall under the supervision of the Massachusetts Gaming Commission authority provided under Chapter 23K.”

Key points of SD 903

  • Gross revenue on retail and mobile sports betting operations will be taxed at a rate of 12.5%.
  • An initial application fee of $500,000 will be paid by operators, followed by a $100,000 annual license renewal fee.
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