Group Argues Adverse Effects Of Inaction On Sports Betting
As the sports betting debate rages on in Massachusetts, a premier casino trade group recently offered its insights to lawmakers. In a May 19 letter, the American Gaming Association (AGA) argues the adverse effects of inaction on sports betting this legislative session.
The AGA’s three-page letter points to three issues currently being debated by House and Senate lawmakers:
- College sports betting
- Tax rates
Overall, the gaming group says more restrictions only would undermine efforts to protect consumers from illegal markets. Failure to make sports betting legal in Massachusetts could force bettors to bet illegally. Or they could continue to take their dollars across state lines.
Lawful college sports betting crushes illegal markets
Nearly 20% of all wagers are on college sports, according to the AMA. For 2021, that would mean about $11.5 billion of the $57.71 billion wagered came from bets placed on sports.
The AGA’s stance is that not legalizing college sports wagers will just drive bettors to illegal markets. Customers have no legal standing if something goes wrong.
It also becomes more difficult to protect the integrity of games. The letter, signed by AGA President Bill Miller, pointed to this:
“Only in a legal, regulated market do regulators and law enforcement have insight into betting patterns and activity that can help them identify concerning trends, that in turn help to uncover unlawful tampering with games and athletes.”
The gaming group not only argues the adverse effects of inaction on sports betting in its letter. It also reminds lawmakers of lost tax revenue. With nearby states offering legal college bets, more and more Massachusetts residents will simply cross state lines to place bets.
Advertising restrictions hurt legal operators
While some may argue that increased advertising encourages betting, the AGA argues that ads are a critical tool to inform the public about which sportsbooks are legal and regulated in new markets.
Unclear marketing can lead to people betting with illegal operators without realizing it, the AGA said in its letter.
“AGA’s research shows that while consumers want to use legal operators, the availability of these illegal sites is driving confusion: 74 percent of sports bettors say it is important to only bet with legal providers, however, 52 percent continue to utilize illegal bookmakers. Most of these consumers (63%) later say they are surprised to learn that they bet through unregulated and illegal sportsbooks.”
The letter also states that in January and February of this year, “internet searches in Massachusetts for illegal offshore sportsbooks increased by 22% year-over-year and almost 60% of all sportsbook searches in Massachusetts were for illegal sites — both above the national average.”
High tax rates harm industry
The AGA told Massachusetts lawmakers in its letter that the gaming industry helps drive the economy. In Massachusetts, the industry supports more than 5,000 jobs. It has also invested more than $4 billion in infrastructure and development and provides $1 billion in state tax revenues.
At the end of the letter, the AGA also urged the committee to “adopt a reasonable tax rate that will allow and encourage regulated operators to effectively compete against illegal, offshore entities that do not pay any taxes or generate any economic benefit for the Commonwealth.”