Massachusetts Sports Betting Stalls Due To Temporary Licensing Issues

Sports fans in Massachusetts eagerly await the chance to place sports bets on their favorite teams, but some hurdles still remain in the regulatory process.

Sports bettors in the state rejoiced in early August when Gov. Charlie Baker signed the Massachusetts sports betting law into effect, but so far, it’s been a case of hurry up and wait.

The sports betting law allows the Massachusetts Gaming Commission (MGC) to issue licenses for the state’s casinos, simulcast centers, and slot parlors to take in-person bets. Those facilities can then partner with mobile operators. MGC can also award mobile licenses to up to seven independent companies – and that’s where problems have arisen.

Confusion And Concern Over Temporary Licenses

At least 30 operators are expected to apply for the seven available independent licenses. While the operators wait for the seven permanent licenses to be awarded, they can qualify for a temporary license that could last up to a year and come with a $1 million fee. Officials are concerned that potentially dozens of temporary licenses will then be shut down when the official seven are chosen, causing chaos for the regulator, licensees, and the public.

In a public meeting, MGC Executive Director Karen Wells said that up to 76% of temporary license holders could be required to shut down in a year.

“This structure, and this disconnect, poses complications for both the regulator and the licensee themselves, and it also presents consumer protection concerns for the public,” Wells said.

If operators are suddenly ordered to cease business, there are concerns about bettors being able to retrieve any money left in their accounts or money they have placed on an open bet that hasn’t settled. Wells wants the commission to be able to ensure players get their money. She brought up the question of whether or not operators should have to put up a bond to guarantee all wagers if they are not chosen as one of the seven permanent licenses.

In the meeting, MGC Chair Cathy Judd-Stein also highlighted concerns about shutting down temporary licenses.

“The idea of having to issue notices to honorably operating businesses that just didn’t happen to make our final cut of up to seven is just untenable to me”, said Judd-Stein. “It’s just a construct that I would say was never intended here.”

Judd-Stein also noted that a timeline for the Massachusetts legal gambling launch would have already been set if it wasn’t for the questions and confusion around temporary licensure.

What’s Next?

The commission will hold a roundtable with every interested operator on Thursday to try and iron out concerns and work towards a solution.

Judd-Stein said she is hopeful that this week will provide more clarity on when the public can expect to be able to place a bet.

When the dust settles, the commonwealth’s betting law will allow for up to 20 total sportsbooks.