Legal Sports Betting in Massachusetts Faces Three Main Issues

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For the most part, lawmakers in Massachusetts are in favor of legal sports betting in the state. The issue as hand centers on three primary differences in how the industry should be run. The state House has already approved its own bill. The state Senate has agreed upon its own version of that bill with significant changes.

The eventual fate of legal sports betting in the state all comes down to a compromise. The Massachusetts Senate formed its own conference committee as a negotiating team. The state House has followed suit. Obvious differences between the two exist with three main issues front and center.

Legal betting on college sports ranks high on the list. H 3993 is the House bill legalizing sports betting in the state. This piece of legislation includes legal betting on college sports. The Senate version does not.

House Speaker Ron Mariano has already described this issue as a dealbreaker. He believes the ban on college sports betting leaves too much business “in the hands of the black market.”

Senator Patrick O’Conner is part of the negotiating team. He has responded with three different amendments that would bend the rules a bit. The obvious compromise would be a betting ban on in-state college teams.

The next big issue up for debate is tax rates on legal sports betting. The House is in favor of a more moderate tax rate. Mobile betting revenue would be taxed at 15%. That rate would drop to 12.5% on revenue generated by retail sportsbooks. As a plus for operators, promotional costs can be deducted from revenue.

The state Senate’s bill taxes mobile revenue at 35% with a drop to 20% on the retail end. The deduction for promotional costs has been eliminated. The projected taxable revenue using the higher rates would be $319 million annually. This compares to just $212 million in taxable revenue using the proposed rates by the House.

The third main difference that needs to be settled is advertising restrictions. The Senate is looking to add restrictions on sportsbook advertising. There would be a ban on ads during live games. Sportsbooks would also have to ensure that 85% of the viewing audience is of legal betting age.

Compliance with any sort of imposed advertising ban on a national level would not be feasible. Any restrictions on sportsbook advertising could only applied at the local level. This would obviously lessen their impact while only complicating the matter for in-state operators.

The proposed restrictions by the Massachusetts Senate on sportsbook advertising would break new ground in the legal US market. Major operators such as FanDuel, DraftKings, BetMGM and Caesars are sure to voice their opposition to any restrictive advertising rules.

Legal sports betting in Massachusetts may still happen this year. However, there is some major work to be done. It remains to be seen if a workable agreement is reachable among all the parties involved in the decision making process.

Written by Dave Schwab, our US Sports Betting Industry Expert.