Massachusetts Sports Betting Bill Takes Shape

Legalizing online and retail sports betting in Massachusetts is starting to see a more concrete path to actualization more than a year after lawmakers introduced the first noteworthy bills to do so.

Like every other facet of the legislative process, Massachusetts sports betting is still threatened by the spread of COVID-19. But in one of the few legislatures still meeting on a consistent basis, the recently reorganized sports betting legislation appears to have a better chance than ever to (finally) come into law.

Introduced earlier this year, HB 4559 consolidates 11 separate House and Senate measures, settling the competing sports betting proposals into one vehicle. Now with 22 co-sponsors between the two chambers, the bill already has a sizeable base of support in the House Committee on Ways and Means, where it now under consideration, as well as the full floors of both houses. Gov. Charlie Baker is also a sponsor and has publicly championed legal betting in the commonwealth.

With up to 16 online licenses, or “skins” available and a tax rate below the national median, the legislation won’t likely run into much opposition from would-be sports betting stakeholders. The biggest challenges will come from a possible slowdown (or shutdown) in the day-to-day dealings of the Massachusetts General Court, as well as the intrinsic political difficulties passing legislation in even the most favorable of conditions.

Operator Options

Sports betting trade groups as well as sportsbook operators themselves have pitched lawmakers in statehouses across the country to not just legalize online sports betting but to do so with as many skins as possible. Along with the increased access for providers to enter a market, advocates for wide availability point to the benefits of competition and the early success of competitive marketplaces such as New Jersey and Nevada, the two highest-grossing sports betting states.

The current bill would allow as many as 16 skins. Although that’s fewer than markets such as New Jersey, Colorado and Indiana, which allow for more than 30 each, this still would allow most leading sports betting operators to enter Massachusetts. With a 10% tax rate for retail betting gross gaming revenue and 12% rate for online wagers, the rate is low enough to entice most major brands.

If passed as written now, Massachusetts sports betting would be divided into four categories:

• Casinos: Encore Boston Harbor, MGM Springfield and an (eventual) third casino in the southeastern portion of the state would each offer up to three skins apiece. Each facility would remit an effective initial fee of $1 million for the rights to take bets, which is on par with most other state rates.
• Slot Parlor: The Plainridge Park slots facility would be able to offer two skins after paying the same initial fees as the casinos.
• Independent Operators: Up to five additional operators, untethered to existing gaming facilities, would be able to take bets and would be subject to the same fees as the tethered facilities. Boston-based DraftKings, along with rival FanDuel, would be likely candidates for one of these licenses if they don’t partner with one of the land-based facilities.
• Horse Tracks: State horse tracks would pay a much lower fee and would be able to offer in-person sportsbooks on their properties.

The casinos and slot parlors would also be able to open retail sportsbooks on their properties. Bars, restaurants and other businesses would not be able to accept bets.

Massachusetts Takes Responsible Gaming Seriously

The bill creates the “Collegiate Health, Wellness and Education Fund.” Annually, 5% of sports betting revenue would go to educate student-athletes on sports wagering regulations, violation reporting, and protections from illicit wagers. Student-athlete protections have been a critical aspect of the bill in Massachusetts, where the notorious Boston College men’s basketball team point-shaving scandal of the 1970s took place.

The legislation also creates a confidential integrity helpline for athletes and sports personnel to report violations. The Massachusetts Gaming Commission, which has purview over sports wagering in the bill, would also create a study to assess the impact of regulated sports betting on problem gambling, as well as on youth, collegiate, and professional sports.

Problem gamblers or any other individual will be able to place themselves on restricted lists that prevent them from gambling. License holders are also required to train employees to look for signs of problem gambling and to prevent any other ineligible bettors from wagering with their sportsbooks.

Extensive measures are also taken under the legislation to prohibit marketing to anyone under the age of 21, which is the minimum age to place a bet. Eligible bettors can place an online bet from anywhere within state lines, but will not be allowed to wager with a Massachusetts betting operator if they are outside the commonwealth.

Other Details

After extensive debate, lawmakers in the current version of the Massachusetts sports betting bill have allowed betting on in-state and out-of-state Division I college teams. In-play or live betting is not permitted on individuals in collegiate sporting events.

Otherwise, the bill permits license holders to accept single-game bets, teaser bets, parlays, over-under, money line, pools, exchange wagering, in-game wagering, in-play bets, proposition bets, and straight bets. The bill allows for new options the MGC sees fit, as long as they don’t run against the existing statute.

Massachusetts would be one of a small group of states to approve sports betting but prohibit wagers on the Olympics. Like most states, it also prohibits wagers on eSports, but officials in states such as Nevada, New Jersey, and Indiana have begun lifting those restrictions, in part due to the widespread cancelation of traditional sports due to COVID-19.

Will This Massachusetts Sports Betting Bill Pass?

Now condensed into one, relatively straightforward piece of legislation with bipartisan, bicameral support, the Massachusetts sports betting bill lays out what legal wagering would look like in the commonwealth. It remains to be seen if it can take effect.

Massachusetts lawmakers have considered sports betting since the Supreme Court struck down the federal sports betting ban nearly two years ago. Despite support from both parties, as well as both the legislative and executive branches, legislators in Boston haven’t been able to reach a consensus on a sports betting bill, even as neighboring Rhode Island and New Hampshire managed to do so.

A single bill, instead of the dozen or so that floated through the General Court for months, gives sports betting a solid direction and a positive step toward legalization, but that is far from enough to pass it into law.

Recommended favorably by the House Committee on Economic Development and Emerging Technologies, the bill now sits in Ways and Means, the influential House committee that considers matters affecting the commonwealth’s finances. But as of April 10, the committee doesn’t have any meetings announced for the coming weeks.

A timeline will likely become clearer in the coming weeks as Ways and Means, vital to most of the General Court’s day-to-day operations, finds time to consider some of the 573 bills currently under its purview. Massachusetts is one of a handful of states with year-long legislatures, and it technically has until this summer to pass a bill so that it can come into effect into the upcoming fiscal year.

That doesn’t make things a sure bet. If advanced favorably by Ways and Means, the legislation is still subject to votes on the full House and Senate floors, both of which would need to pass identical versions before it can come into law. Baker’s signature seems like a formality, but he could override the bill if it evolves into a form against his liking.

And Coronavirus remains the great variable. By not adjourning due to the virus, the General Court is among a dwindling group of legislatures still in session. The sports betting bill is among thousands still under consideration, practically all of which are in jeopardy from further delays or suspensions.

With elected officials’ focus on strengthening the literal and financial health of the government, sports betting could fall to the wayside. It may be a new revenue source for lawmakers scrambling to overcome dramatic budget shortfalls for next year, but even the most optimistic projections would generate only a few million dollars for the commonwealth’s nearly $45 billion annual budget.

Should the bill pass today, it would still be months until betting could begin. With sports leagues globally effectively shut down, there wouldn’t be much to bet on anyway.

A single path for sports betting in Massachusetts could be a boon for the long-stalled legislation. Its journey is just beginning against potential opposition from both inside and outside the statehouse.