Gaming Commission Clarifies Massachusetts Sports Betting License Fees

• Partnerships for Category 2 licenses will be expensive
• The Massachusetts Gaming Commission agreed to accept Category 2 license applications on a rolling basis
• Raynham Park and Suffolk Downs are close to announcing operator partnerships

Representatives from simulcast facilities Raynham Park and Suffolk Downs are close to announcing  partners for their Massachusetts sports betting operations, but learned yesterday that it will be more costly than they expected.

The Massachusetts Gaming Commission and its legal counsel clarified that each entity offering sports betting in the Commonwealth must pay a $5 million licensing fee, regardless of any existing partnerships.

Raynham Park and Suffolk Downs can both partner with up to one online sports betting operator after they receive a Category 2 sports betting license.

Massachusetts Sports Betting Licenses $5 million

Steve Eichel, legal counsel for Raynham Park, yesterday asked the commission for clarification on the necessary licensing fees after encountering confusion in the sports betting bill.

Eichel asked if Raynham Park and its operating partner were both responsible for a $5 million fee to offer sports betting at the facility, or if an online sports betting operator was included under the umbrella of the simulcast facility’s Category 2 license.

The commission voted 5-0 to clarify the bill, requiring that every license holder pay the $5 million licensing fee.

A Category 2 license allows its holder to offer both retail and online sports betting. In order to offer online sports betting, Category 2 license holders must partner with an online sports betting operator, all of whom must have a Category 3 sports betting license. Category 3 licenses require a $5 million fee.

“There is no in-house mobile operation. Any mobile operator must have a Category 3 license. In this case, that operator has to pay the $5 million fee in order to get their Category 3 license. They can run Category 1 or 2 mobile operations,” said Todd Grossman, Massachusetts Gaming Commission legal counsel.

Category 2 Licenses Accepted on Rolling Basis

Applications for Category 1 and Category 3 licenses, for retail and online sports betting, are due on Monday, Nov. 21. The state’s three casinos are expected to submit applications, while 23 sports betting operators are eligible to apply for Category 3 licenses after submitting scoping surveys to the commission in October.

The gaming commission, however, voted 5-0 to allow Category 2 license hopefuls to submit their applications on a rolling basis past the Nov. 21 deadline.

Both Raynham Park and Suffolk Downs representatives said they are still several weeks away from entering into partnerships with their sports betting operators. Neither said they were prepared to submit a license application by Nov. 21.

“We are negotiating term sheets and trying to finalize those negotiations with several potential operators. In one case, we have may have a scenario where we will have a separate operators for mobile for the tethered Category 3 and one for retail, or possibly a single operator who would do both retail and mobile,” Eichel said.