Massachusetts Senate Approves Bill to Legalize Sports Betting

• The approved bill allows for retail and online sports betting in the Commonwealth of Massachusetts
• Each casino in the state will be allowed to offer retail sports betting and partner with one online sports betting operator
• The Senate bill differs greatly from a 2021 House approved bill

Good news: for the first time, the Massachusetts Senate has approved a Massachusetts sports betting bill. Bad news: it differs greatly from a House approved sports betting bill and finding a compromise between the two legislative bodies may prove to be difficult.

After nearly seven hours of discussion, the Senate approved bill S2844 to be engrossed after calling for a voice vote. The Senate sports betting bill legalizes sports betting in the state and allows each of the six casinos to offer retail and online sports betting.

The Massachusetts Senate Ways and Means Committee approved the sports betting bill last week.

Senate Bill Restricts Advertisements, Credit Card Usage

The bill sets the retail sports betting tax rate at 20% and the online sports betting tax rate at 35%. The bill allows for sports bets to be funded by debit cards or digital payment, but does not allow for credit cards to fund bets.

Sen. Eric P. Lesser (D) explained that the Senate did not want the bill to enable sports bettors to wrack up thousands of dollars in credit card debt.

Prior to Thursday’s hearing, Senators submitted 69 amendments to the document, several of which called for the inclusion of college sports betting in the bill. The college sports betting amendments were withdrawn before a vote, so the Senate bill will not allow any sports betting on collegiate events.

The inclusion of collegiate sports betting will be a key point moving forward. House bill H.3977, which was approved by House representatives in July 2021 by a vote of 156-3-1, includes collegiate sports betting and several legislators have described its exclusion (or inclusion) as a deal breaker for the legislation.

By excluding sports betting, Sen. Patrick M. O’Connor (R) warned the state could expect a 25% reduction in sports wagering revenues.  Limiting collegiate sports betting only on teams outside of Massachusetts could be an appropriate safeguard, he said, but excluding it entirely would be a mistake.

Massachusetts sports bettors could easily continue betting on college sports through the unregulated black market and offshore sportsbooks, he noted.

“A legal college sports betting market is not just a safer sports betting market, but also a more profitable sports betting market for the Commonwealth,” O’Connor said.

The bill designated two categories of sports betting licenses. A category 1 sports betting license will be available for the state’s existing gaming operators and will enable the facilities to offer in-person sports betting and online betting via one online sports betting partnership.

Category 2 licenses will allow up to six other facilities in the state to offer retain and online sports betting.

The bill will also impose some of the strictest restrictions on sports betting marketing and advertising in the country. The law would not allow televised sports events in Massachusetts to air sports betting advertisements or broadcasts to mention sports betting sponsorships on air.

Future of Massachusetts Sports Betting?

While the approval of a Senate sports betting bill was a big step, the two Massachusetts legislative bodies will have to agree to a single bill if sports betting has a change to be legalized.

There are major differences between the two pieces of legislation. The House approved bill called for much lower rates, with online sports betting at 15% and retail sports betting at 12.5%, and also allowed collegiate sports betting. It features much less restrictive advertising and marketing rules and allows sports bettors to fund bets with a credit card.

The previously approved House sports betting bill has been sitting in a committee since last summer, with its future still up in the air. The bill, as approved, provides for three types of sports betting licenses for casinos, racetracks, and untethered online sportsbook operators.

Category 1 licenses will be available for state casinos and will allow in-person sports betting and up to three skins for online sports betting. Category 2 licenses will be available for state horse and/or greyhound race tracks and will allow for one skin each for online sports betting and in-person sports betting. Category 3 licenses will be available for untethered online sports betting platform operators that are approved by the Massachusetts Gaming Commission.

Each license will cost $5 million and will last for 5-years. An initial application fee of $100,000 will be required.

The Massachusetts legislative session runs through July 31.