Massachusetts Sports Betting Proposals Combined Into Single Bill

One of the biggest problems hampering Massachusetts sports betting legislative efforts was logistics. The state was staring at nearly two dozen proposals and appeared to be suffering from paralysis by analysis based on the last committee hearing. That paralysis seems to be over.

On Friday, the Joint Committee on Economic Development and Emerging Technologies held a poll that whittled down the options to two bills, S269, and a reworked H506. Members were tasked with voting on the bills by Sunday at 5 PM, and not surprisingly, the state is moving forward on sports betting.

On the Senate side, S269 has yet to be reported out of committee but is expected to be sent to the Senate.

On the House side, a clearer picture has emerged. H506 morphed into H3974 and was reported to the House.

S269 was always seen as a strong candidate, as the bill was introduced by Sen. Eric Lesser, who happens to chair the Joint Committee on Economic Development and Emerging Technologies.

As noted, H3974 is a reworked version of a bill (H506) introduced by Rep. Dan Cahill that now combines different aspects of several other proposals (H70, H502, H506, H514, H515, H516, H517, H518, H519, H531, H535, and H3832).

A Deep Dive Into H 3974

The Senate and House bills have enough in common to indicate how legal sports betting in Massachusetts will be structured should legislation make the arduous journey through the Massachusetts legislature.  

On Licensing

Each bill uses three distinct licensing categories:

• Category 1 – Casinos with up to three mobile brands
• Category 2 – Racetracks (including simulcast) with not more than one mobile brand
• Category 3 – Mobile-only operators (criteria still unknown)

There is a gap in licensing fees between the two bills. H3974 calls for an across-the-board licensing fee of $5 million. S269 calls for a $2.5 million licensing fee for a Category 1 license, a $1.5 million fee for a Category 2 license, and a $7.5 million fee for a Category 3 license.

On Taxes

Another difference is tax rates:

• H3974 = 12.5% for retail bets and 15% for mobile wagers
• S269 = 20% for retail bets and 25% for mobile wagers

H3974 allows operators to deduct promotional bets from their taxable revenue, which is a policy that has greatly diminished tax revenue in other states.

The House bill also calls for an additional 1% tax on events taking place in Massachusetts, distributed to the facility hosting the event.

Other Odds and Ends

S269 bans college and Olympic betting, while H3974 only prohibits in-play and prop betting on college sports – pre-game bets on the outcome are allowed.

The House bill also mandates official league data to settle in-play and prop bets (dubbed Tier 2 bets in the legislation).

What’s Next?

The House is prepared to debate the newly amended bill on Thursday, but not before it passes through the Ways and Means Committee, where it could be further amended before it reaches the House floor.

As reported by Statehouse News Service, there are still multiple steps in the process:

“… the most likely course of action is for the House to pass its bill, then the Senate to debate and pass its own version, and then for a six-member conference committee to hammer out a compromise version that could win approval from both chambers.”

What are the Remaining Issues?

There are also plenty of potential sticking points that go far beyond haggling over a few tax percentage points.

Among the unresolved issues are:

• What role the Massachusetts Lottery will play in online gambling.
• Are mobile operators tethered or untethered from land-based operators?
• The possible inclusion/exclusion of bars, restaurants, and other small businesses through kiosk betting.
• Prohibitions on college sports betting.
• The amount and allocation of responsible and problem gambling resources.