Group Argues Adverse Effects Of Inaction On Sports Betting  

The ongoing sports betting debate in Massachusetts has attracted the attention of a prominent casino trade group. Recently, the American Gaming Association (AGA) shared its perspectives with lawmakers in a letter dated May 19. The AGA emphasizes the potential negative consequences of refraining from taking action on sports betting during this legislative session.

The AGA has written a letter consisting of three pages, highlighting three issues that are currently under discussion among House and Senate lawmakers.

• College sports betting
• Advertising
• Tax rates

In general, the gaming group argues that imposing additional restrictions would not effectively safeguard consumers against illegal markets. If sports betting remains illegal in Massachusetts, bettors may be compelled to engage in unlawful betting activities. Alternatively, they may choose to travel to other states to place their bets.

Lawful college sports betting crushes illegal markets

According to the AMA, approximately one-fifth or nearly 20% of all wagers are made on college sports. Based on this statistic, it can be estimated that around $11.5 billion out of the total $57.71 billion wagered in 2021 were placed on sports bets related to college athletics.

The AGA firmly believes that the failure to legalize college sports wagers will only push bettors towards illicit markets, leaving customers without any legal protection in case of issues.

The protection of game integrity also becomes increasingly challenging, as highlighted in the letter signed by AGA President Bill Miller.

Regulators and law enforcement gain valuable insights into betting patterns and activity, aiding them in identifying worrisome trends that can uncover illicit tampering with games and athletes. This level of awareness is only possible within a legal and regulated market.

In its letter, the gaming group highlights not just the negative consequences of inaction on sports betting but also emphasizes the potential loss of tax revenue. As neighboring states permit legal college bets, an increasing number of Massachusetts residents will likely opt to cross state borders to engage in betting activities.

Advertising restrictions hurt legal operators

Although there are those who claim that increased advertising promotes betting, the AGA asserts that advertisements play a vital role in educating the public about the legality and regulation of sportsbooks in emerging markets.

According to the AGA, if the marketing is not clear, people may unknowingly end up betting with illegal operators.

According to AGA’s research findings, consumers express a preference for using legal operators for their betting activities. However, the presence of illegal sites is causing confusion. A significant 74 percent of sports bettors consider it crucial to only engage with legal providers, but surprisingly, 52 percent still opt for illegal bookmakers. Interestingly, a majority of these consumers (63%) admit to being taken aback when they discover that they had unknowingly placed bets through unregulated and illegal sportsbooks.

According to the letter, there was a 22% year-over-year increase in internet searches for illegal offshore sportsbooks in Massachusetts during January and February of this year. Additionally, it was found that nearly 60% of all sportsbook searches in Massachusetts were for illegal sites, which is higher than the national average.

High tax rates harm industry

In its letter to Massachusetts lawmakers, the AGA highlighted the economic impact of the gaming industry. The industry plays a crucial role in driving the economy of the state, supporting over 5,000 jobs. Furthermore, it has made substantial investments of over $4 billion in infrastructure and development, while contributing $1 billion in state tax revenues.

The AGA concluded the letter by urging the committee to adopt a fair tax rate that would enable and motivate regulated operators to effectively compete with illegal offshore entities. These entities neither contribute taxes nor generate any economic benefits for the Commonwealth.