Massachusetts House Passes Sports Betting Bill, Calls Out Senate

The initiation of sports betting legislation by the Massachusetts House of Representatives has set things in motion. It remains to be seen if the Senate is equally well-equipped to handle this matter.

On Thursday, the House passed sports betting legislation with an overwhelming majority of 156-3, signaling a clear message to the upper chamber.

This week, the Economic Development and Ways and Means committees joined forces to bring about the formation of Bill H 3977.

In anticipation of yet another football season where Massachusetts residents venture into neighboring states to place sports bets, the House is eager to expedite the process of legalizing sports betting. Nevertheless, it remains uncertain whether the Senate will comply with this proposition.

Rep. Andres Vargas, vice-chair of the Economic Development Committee, expressed that he is aware of the preference of his constituents engaged in sports betting. They would prefer to place their bets within the comfort of their homes and in the state of Massachusetts, while also wanting the revenue collected to benefit their home state.

MA House sports betting bill details

Chairing the Economic Development Committee, Rep. Jerald Parisella meticulously discussed the intricacies of the bill while addressing the House floor. These encompassed:

• The Massachusetts Gaming Commission is appointed to supervise sports wagering.
• The legislation allows for the legalization of retail and mobile sports betting at the state’s three commercial casinos as well as up to three horse or greyhound racetracks.
• Casinos have the potential to operate with a maximum of three online skins, whereas tracks are restricted to just one skin.
• The cost of licenses is $5 million for a duration of five years, accompanied by an initial extra fee of $1 million.
• Regardless of whether they collaborate with a gaming facility or not, online operators are obligated to pay $5 million for a Category 3 license. An amendment passed during the discussion explicitly states that Category 3 license holders are not obliged to establish any affiliation or partnership with a Category 1 (casino) or 2 (racetrack) licensee.
• The tax rate for retail wagering is set at 12.5%, while online wagering is set at 15%.
• Enables betting on both collegiate sports and esports.
• Every year, online operators contribute a staggering $1 million to a Public Health Trust Fund, dedicated to supporting initiatives that tackle the issue of compulsive gambling.
• To ensure the safety of athletes and maintain the integrity of games, operators are required to contribute 1% of the bets placed on in-state sporting events to the facility. This contribution is allocated towards security measures and other necessary expenses.

Bill includes wagering on college sports

The subject of betting on college sports has been a source of disagreement in past Massachusetts discussions on sports wagering.

It remains uncertain whether Gov. Charlie Baker will approve a bill that includes college betting, considering his consistent omission of it in his proposed legislation.

Despite local colleges requesting an exemption, the House bill encompasses all types of college wagering, including bets placed on in-state colleges. House members argued the necessity of including wagering on college sports.

Vargas, the gaming analyst, stated that college sports bets are projected to contribute 25% of the sports betting revenue in Massachusetts. He further warned that if this particular market segment is not legalized, bettors will probably continue to travel across state borders to place their college bets or resort to the illicit market exclusively.

According to Parisella, the Super Bowl is the only sporting event that surpasses March Madness in terms of betting activity. Additionally, Parisella emphasized the importance of state regulation in ensuring a safer environment for college betting.

Parisella stated that there are several reasons why they deem it suitable to permit college betting. “To begin with, it helps to bring it into the light, away from secrecy. Our aim is to prevent incidents like the shavings scandal at Boston College from occurring in the future.”

College players will not be permitted to participate in proposition bets. Furthermore, the 1% venue fee for security and integrity encompasses college venues as well.

Sports teams could have avenue toward participating

An amendment proposed by Rep. Jay Livingstone was approved by the House, mandating a commission to examine the potential for professional sports teams or facilities to provide retail and online sports betting options.

The study shall include:

• The capability of professional sports teams or their authorized representatives to engage in sports betting operations.
• Should professional sports teams, facilities, or independent third parties be responsible for operating sports wagering?
• Authorizing sports wagering at a professional sports venue has significant economic, public health, and safety implications.
• The impact of professional sports events on minors, problem gambling, and viewers’ overall experience.

Livingstone proposed an amendment aiming to establish a new type of license for professional sports facilities, referred to as a fourth category license. The deadline for completing the study is Dec. 31, 2022.

Minority and small business inclusion gets deeper look

At the recent committee hearing, the discussion surrounding the inclusion of sports betting kiosks in bars and restaurants generated considerable interest.

Sen. Adam Gomez and Rep. Orlando Ramos presented it as an opportunity to incorporate small- and minority-owned businesses.

By December 31, 2022, the House bill mandates that the commission carry out an analysis on the viability of permitting retail locations to offer sports betting kiosks.

Rep. Vargas explained:

There is indication that implementing this type of betting would attract a greater number of illegal bettors and could be advantageous for business owners from diverse backgrounds. Additionally, it has the potential to generate more revenue and boost business for restaurants and bars. However, the installation of retail sports betting kiosks is intricate and necessitates additional scrutiny. Therefore, the bill adopts a cautious approach to thoroughly investigate this particular matter, all while ensuring the legalization of the rest of the market promptly so as not to miss out on another season of potential earnings loss.

On the floor, Ramos introduced an amendment that includes a study on the involvement of minority-owned, women-owned, and veteran-owned businesses in the sports wagering industry. The deadline for the study’s completion is set for July 1, 2022.

Revenue projections for Massachusetts sports betting

According to Parisella, the state can expect substantial revenue from sports betting.

He estimated that the state would generate a revenue of $70 to $80 million even before the first bet is made, considering the $5 million licensing fee.

Every year, he referred to estimates of $60 million in state tax revenue, with the possibility of it increasing even more as the market fully develops.

The revenue from state sports betting is distributed in the following manner according to the bill.

• The Workforce Investment Trust Fund receives 40% of the funding.
• A contribution of 33% will be allocated to the Gaming Local Aid Fund.
• The Youth Development and Achievement Fund will receive a 20% contribution.
• The Public Health Trust Fund will receive a 6% allocation.
• One percent allocated to the Players’ Benevolence Fund.

“Rep. David Muradian stated that a significant portion of these revenues will be allocated to local aid, which is expected to be highly attractive to all of us. This will offer additional financial support to every city and town.”

The ball is in the Senate’s court

This is not the first instance where the House has approved sports wagering language. Previously, the House included it in the economic development bill but unfortunately, it was removed during the conference committee negotiations with the Senate.

Last month’s Joint Economic Development and Emerging Technologies Committee hearing saw participation from members belonging to both political parties.

The ideal scenario for the chambers to collaborate on a unified sports betting bill has been established. However, House members chose to take independent action in order to capture the Senate’s attention.

Several House members, including Rep. Bradford Hill, expressed their opinions in an attempt to ignite progress on sports betting in the Senate.

I am eager for the Senate to promptly address this matter, allowing us to legalize sports betting in the Commonwealth. It is crucial that we do not miss out on future football seasons, college basketball seasons, World Series, or Super Bowls, as we have already missed three opportunities. It is imperative that we take action and make progress in this regard. This is just the beginning.