No Limits To Online Operators In Massachusetts Sports Betting Legislation

The legislation on sports betting passed by the Massachusetts House of Representatives does not impose any restrictions on the number of online operators.

Play MA confirmed the open-market approach with Rep. Jerald Parisella, the committee chair from which the bill originated.

According to Parisella, it is common for online operators in the industry to collaborate with physical establishments. However, we followed a different approach similar to the one in New Jersey, where casinos have three mobile apps and tracks have one each. Nevertheless, there is no restriction on an individual venturing into this alone. Our rationale was that if a brilliant sports betting app is developed by a talented MIT student, meets our requirements, and can afford the $5 million fee, we are open to giving them an opportunity to test it out.

On July 22, the bill was passed by the House. The Committee on Ways and Means was assigned H 3993 by the Senate.

How would MA online sports betting landscape look?

The House bill establishes three categories of licenses for sports wagering.

• Category 1 licensees consist of three commercial casinos, each of which is permitted to have three online sports betting skins.
• Category 2 licensees consist of two racetracks, with the possibility of expanding to three. Each racetrack is allowed to have one online sports betting skin.
• Online operators are granted Category 3 licenses.

Online operators are required to make a payment of $5 million in order to obtain a license that is valid for five years. Additionally, they must pay an initial fee of $1 million, as well as an annual contribution of $1 million towards programs aimed at addressing compulsive gambling.

Why would online operators choose to collaborate with a physical entity when the fees remain unchanged whether they operate independently or in partnership?

According to Parisella, based on my conversations with people, it seems that they typically collaborate with well-established organizations. In my opinion, there could be a mutually beneficial relationship with online operators. Only time will tell how the market unfolds. However, I strongly believe that DraftKings will eventually form a partnership with one of the casinos.

No opposition has been voiced by the casinos regarding the authorization of untethered mobile sports betting licenses, according to Parisella.

Sports teams requested to be involved late

If possible, DraftKings may be inclined to collaborate with a professional sports team. Their recent partnership with the Boston Red Sox as the official daily fantasy sports partner indicates this likelihood.

During a recent session on the House floor, an unexpected amendment was proposed, suggesting a comprehensive study to evaluate the feasibility of granting online and retail licenses to sports teams or facilities within the state.

In 2021, there has been a surge in professional sports teams actively engaging in sports betting. This trend is evident in Arizona and Maryland, where these teams have been granted sports betting licenses. Furthermore, Ohio is currently considering legislation that would also involve teams in the realm of sports betting.

During the June hearing, Massachusetts sports teams made it clear that they had no intention of participating in sports wagering. However, they expressed their support for the legalization of this practice, highlighting reasons such as enhanced fan engagement, increased revenue from sponsorships, and a boost in advertising funds.

Parisella explained that the sports teams joined the process relatively late. He mentioned that the bill had already been developed before they showed interest in participating. During the initial meetings and the hearing, they had not expressed any interest. However, if it is logical for them to be included, Parisella believes it is something that can be considered.

College wagering could be sticking point

According to Parisella, the inclusion of college sports betting by the House could potentially be the most controversial aspect in the Senate.

Senator Eric Lesser, along with Governor Charlie Baker, both stand against the inclusion of college sports. Lesser, who serves as the chair of the Economic Development and Emerging Technologies Committee, shares this opposition with Baker.

Parisella presents a logical argument in favor of incorporating college betting.

In my opinion, without college betting options, many consumers will likely opt for an alternative that allows them to bet on both professional and college sports. I don’t believe they will use one app for professional betting and another for college betting. If we neglect college betting, they will probably continue to go to New Hampshire, Rhode Island, Connecticut, or resort to offshore books, or even rely on their local bookmakers.

Parisella is optimistic that implementing a groundbreaking 1% integrity fee for wagers made on in-state games will address any apprehensions surrounding local colleges.

According to Parisella, having these tools provides individuals with the means to enhance security or guarantee integrity during games. While there haven’t been many reported problems in states with college betting, this additional measure assists both college and professional teams in strengthening their security measures.

Path forward for Massachusetts sports betting

Instead of working together as heads of the joint committee, Parisella and Lesser could have reached a consensus on sports betting language. However, the House chose to proceed with the issue and encourage the Senate to do the same.

“We were aware of the urgency, hence our desire to expedite the passage of a bill,” Parisella explained. “It was crucial for us to ensure the approval of a well-crafted bill, and ideally, our counterparts in the Senate will swiftly address it. Given the popularity of sports betting during football season, it is doubtful that it will be implemented in time for Tom Brady’s return to Gillette Stadium in Week 4.”

The Senate has not displayed any signs of urgency in passing sports betting legislation. In a recent development, the upper chamber dismissed the inclusion of sports betting in an economic development bill, despite the House including it in their version.

If the Senate decides to disregard the House bill and enact their own legislation on sports wagering, the matter will be referred to a conference committee. This committee will be comprised of members appointed by Lesser and Parisella.

If the Senate doesn’t object to allowing another Super Bowl and March Madness to occur, there is ample time remaining in the current Massachusetts legislative session, which extends until July 2022.

However, Parisella remains confident that the Senate will take action on sports wagering during this session.

Parisella expressed confidence that a resolution will be reached with the Senate. “I have had discussions with multiple senators who believe that the legalization of sports gaming is overdue in Massachusetts. Our neighboring states, such as New Hampshire and Rhode Island, have already embraced it, and Connecticut and New York are soon to follow suit.”