Massachusetts House of Representatives Approves Sports Betting
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The Bill Passes
On Thursday evening, the House of Representatives passed HB3977 by a lopsided vote of 156-3. This isn’t the first time the House has approved sports betting legislation, as they did last summer in an economic development bill. However, the Senate has been far less enthusiastic regarding the prospect of legalized sports betting and has cited concerns over problem gaming and the propensity for harmful addictions. Representatives are hopeful that this lopsided vote will send a message to the Senate and are still keying in on a potential launch this year.
Representative Andy Vargas of Haverhill cited lost revenue to neighboring states that have already launched legal sports betting. “I represent a district which borders New Hampshire. In Haverhill, you can literally walk across the border into New Hampshire and place a bet. I know that my constituents who partake in sports wagering would rather place these bets in their homes and in their own state and would rather have any revenue collected going towards benefiting their home state of Massachusetts.”
One of the major points of contention has been the prospect of potential collegiate sports betting, and especially a prescient issue with Massachusetts’ ongoing consideration of allowing collegiate athletes to be compensated for their Name, Image, and Likeness rights. House Speaker Ronald Mariano drew a line in the sand, saying that college sports betting would “probably be” a dealbreaker in the state.
Rep. Jerald Parisella, the chairman of the Committee on Economic Development, clarified that this new legislation wouldn’t be “bringing sports betting to Massachusetts” as “residents are already betting on sports” with a “short drive up to New Hampshire or Rhode Island” or “offshore applications” or a “bookie.” He went on to explain – “what this does do is it brings it out of the shadows and into the light and makes it legal in Massachusetts.”
Launching Massachusetts Sports Betting
HB3977 lays out clear guidelines for the prospective launch of legal sports betting in the state of Massachusetts. It states that all sports bettors must be at least 21 years old and physically present in Massachusetts, rules that follow most other states which have launched. HB3977 also allows betting on college sports events, but only specific event outcomes, not individual athlete prop bets. There are also numerous safeguards against problem gambling which Representatives hope will appease the Senate.
The potential for significant tax and licensing revenue for the state of Massachusetts should encourage legislation to move along faster. HB3977 proposes a 12.5% tax on in-person bets and a 15% on mobile bets with the lower tax on in-person bets meant to account for the added costs of brick-and-mortar facilities, including marketing and employment. There will also be a 1% tax on wagers on events in Massachusetts to account for security and integrity costs such as protection against illegal information sharing.
Initial estimates suggest that Massachusetts could generate up to $60 million annually in tax revenue. However, if college sports are not a part of the legal sports betting industry, that number would drop to $25-35 million. In addition, Massachusetts is expected to generate as much as $70-80 million from licensing fees for operators.
In addition to the online sports betting industry, MGM Springfield, Encore Boston Harbor, Plainridge Park Casino, two simulcasting facilities, and racetracks would be granted in-person wager ability per HB3977. An amendment to the bill would allow the Gaming Commission to grant additional licenses to allow veterans’ organizations to operate as many as five slot machines – this is a point of contention with the Senate.
Next Step in Legal Process
This new legislation from the House of Representatives is but one piece of the puzzle as the Senate still needs to make significant progress to make the 2021 sports betting launch a real possibility. The Senate Ways and Means Committee is set to resolve college sports betting, a significant point of divergence as SB269, proposed by Senator Eric Lesser, does not allow for college sports betting.
After approval by the Senate, Governor Charlie Baker will need to approve the finalized legislation, but this is very likely to be fast as Baker has filed his own bill to legalize sports betting (HB70) and has repeatedly included $35 million in sports betting revenue in proposals for the state’s annual budget. Then, that legislation would require approval from the Department of the Interior. All that said, Massachusetts can launch sports betting in 2021 should the Senate move forward with its legislation in the coming weeks.
