How MA Sportsbook Taxes Will Impact Responsible Gambling Funding

Legalized online sports betting in Massachusetts will provide unprecedented access to the world of gambling.

Although it may be convenient for gambling enthusiasts, it could pose a potential danger for individuals struggling with compulsive gambling. Fortunately, Massachusetts ranks among the highest in the United States in terms of responsible gambling funding per person. In the fiscal year 2021, Massachusetts held the second-highest per capita responsible gambling funding, following only Oregon.

If the estimated annual tax revenue of $60 million for sports betting is correct, a total of $5.4 million will be contributed annually to the Public Health Trust Fund. This fund supports problem gambling resources and programs, receiving 9% of the sports betting tax revenue.

The Public Health Trust Fund reached $17.2 million in fiscal year 2022, providing crucial funding for the Office of Problem Gambling Services and the Massachusetts Gaming Commission. These organizations rely on this fund to develop effective strategies and initiatives to address the issue of problem gambling. The creation of this fund was a significant outcome of the Expanded Gaming Act of 2011, which not only legalized land-based casinos in Massachusetts but also paved the way for the state’s commendable efforts in establishing a responsible gambling framework.

According to Keith Whyte, Executive Director of the National Council on Problem Gambling, Massachusetts stands out as a national leader in responsible gambling due to its comprehensive statewide strategic framework. This framework, which includes legislative requirements, dedicated funding for problem gambling, and robust consumer protections, is a direct outcome of the successful advocacy efforts of the Massachusetts Council on Gaming & Health (MAGCH).

The Pieces of Massachusetts Problem Gambling Funding

Problem gambling services in Massachusetts receive funding from two main sources: one being an annual fee determined by the number of active slot machines in the state’s two resort casinos and one slot parlor, which amounts to $5 million. Additionally, 5% of the tax revenue generated by the resort casinos is allocated to the Public Health Trust Fund.

The anticipated balance of the Public Health Trust Fund is typically estimated to range from $15-20 million due to these allocations.

According to Whyte, MACGH dedicated many years to developing connections with all parties involved, which ultimately placed them in a favorable position to become a prominent advocate and reliable source of information regarding the proposed casino legislation. They actively advocated for various provisions, alongside others, to establish a comprehensive responsible gambling system in Massachusetts.

In addition to its financial initiatives, Massachusetts’ leadership in addressing problem gambling extends to the development of proactive programs aimed at preventing it from occurring in the first place.

Take Massachusetts as an instance, where they have created PlayMyWay, a straightforward program that enables bettors to establish budgets and receive push notifications once they near their budgetary thresholds. By doing so, it effectively combats loss-chasing tendencies, which often lead to compulsive gambling disorder. PlayMyWay serves as an uncomplicated approach to ensure that individuals can maintain their gambling activities within manageable limits.

Find out how the tax revenue from Massachusetts sports betting will be allocated by clicking here.

Spending Responsible Gambling Funding Is the Real Challenge

In contrast to other contemporary sports betting markets, Massachusetts is poised to legalize online gambling while demonstrating a proactive approach. The state possesses an established pool of funds dedicated to responsible gambling and is further augmenting this funding as it widens accessibility to gambling.

However, this doesn’t imply that all challenges have been resolved. American sportsbook regulators are still grappling with the issue of universal self-exclusion. In other markets, individuals who have self-excluded themselves occasionally receive marketing materials that promote bonuses using misleadingly positive language. For instance, “risk-free bets” may not truly be risk-free if customers are required to place a bet beforehand.

Massachusetts stands out among the states in terms of both funding and research capabilities to tackle these problems, making it imperative for any state legalizing online sports betting to pursue solutions.

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