As was first reported by Colin A. Young of Statehouse News Service, the Massachusetts Senate Ways and Means Committee advanced a heavily amended version of the sports betting bill (H 3993) passed by the House in July 2021.
That’s the good news. The bad news is the Senate version of the bill differs in several meaningful ways from the original House version.
Key Differences
If the Senate passes the bill that has emerged from the Ways and Means Committee as-is, the two chambers will have their work cut out, as some of these differences are irreconcilable.
Tax Rates
The tax rate in the House bill was set at an industry-standard 12.5% for retail wagers and 15% for mobile bets. The Senate’s bill taxes retail betting at 20% and mobile betting at 35% – one of the highest rates in the country.
The bill does not allow operators to deduct promotional credits, as it defines adjusted gross revenue as:
“The total gross receipts from sports wagering less only the total of all winnings paid to participants; provided, however, that the total of all winnings paid to participants shall not include the cash equivalent of any merchandise or thing of value awarded as a prize.”
College Sports
The Senate bill prohibits wagers on college sports (and high school and Olympics), and according to House Speaker Ronald Mariano, leaving collegiate betting out of any bill “probably would be” a deal-breaker for him. “I find myself having a tough time trying to justify going through all of this to not include probably the main driver of betting in the commonwealth.”
Credit Cards
The Senate bill prohibits the use of credit cards, but not debit cards:
“An operator shall not accept… (ii) a credit card for the purpose of placing a sports wager or depositing credit into the person’s account; provided, however, that this clause shall not exclude the use of debit cards.”
Licensing Structure
The House bill passed last July created three licensing categories:
- Category 1 – Casinos with up to three mobile brands
- Category 2 – Racetracks (including simulcast) with one mobile brand
- Category 3 – An unspecified number of untethered, mobile-only operators
The Senate version lists two licensing categories, eliminating the House’s untethered mobile licenses:
- Category 1 – permits the holder of a gaming license to operate sports wagering through 1 mobile application or other digital platform approved by the Gaming Commission and in person at a gaming establishment.
- Category 2 – permits the operation of sports wagering through 1 mobile application or other digital platform approved by the Gaming Commission and in person at a facility approved by the Gaming Commission.
Category 1 licenses are available to the state’s licensed casinos. Up to six Category 2 licenses can be issued by the Massachusetts Gaming Commission using a competitive application process, and no mobile wagering can take place until this process is completed.
While it seems to be the case, it’s unclear if Category 2 licensees can operate a mobile platform without a retail location. That said, if a company like DraftKings or FanDuel applied for a Category 2 license, finding a partner location for retail betting doesn’t seem like it would be an issue.
Other Odds and Ends in the Senate Bill
- The bill has a lot of language around marketing (already a hot topic in the state) but leaves most of the nuts and bolts of crafting regulations up to the Gaming Commission.
- Among the specific policies, it prohibits “advertising on television during the live broadcast or online streaming of a sporting event, to the extent practicable, including the period beginning 5 minutes before the start of the sporting event and ending 5 minutes after the end of the sporting event.”
- Prohibits, “advertising, marketing and branding by means of television, radio or internet, to the extent practicable, unless at least 85 per cent of the audience is reasonably expected to be 21 years of age or older, as determined by reliable, up-to-date audience composition data.”
- On the RG front, the bill “requires operators that operate sports wagering through a mobile application or other digital platform to require patrons to set self-imposed limitations on sports wagering, as determined by the Gaming Commission.”
- Another RG policy in the legislation “requires certain actions by an operator and a patron whenever the patron exceeds a $2,500 lifetime deposit threshold and annually thereafter.”
- More Category 1 licenses could be made available for tribal operators as the Senate version “clarifies that a federally-recognized Indian tribe that has entered into a compact with the Commonwealth may conduct sports wagering in the “ manner and to the same extent as a person with a category 1 license.”
- The bill also makes significant changes to the Race Horse Development Trust Fund beginning in 2025. This includes Diverting revenue from category 1 gaming licensees from the Race Horse Development Trust Fund to the Education Fund if not more than 19 live racing days occurred in the immediately preceding calendar year.
