On August 10, 2022, Gov. Charlie Baker signed Massachusetts’ sports betting bill into law. Between the bill’s signing and the retail and mobile sports betting launches, the Massachusetts Gaming Commission worked tirelessly behind the scenes to build guardrails around their new industry.
To refresh your memory: Retail sports betting launched Jan. 31, and online sports betting launched March 10.
And to give you some perspective: Other states took nearly a year to launch mobile betting after in-person betting. Massachusetts’ 38-day timeline was, by industry standard, lightning-fast.
In a one-on-one interview with PlayMA, MGC Chairperson Cathy Judd-Stein gave an inside perspective on the frenetic six months between Gov. Baker signing the bill and Massachusetts sports betting apps launching in March.
Research started long before sports betting bills passed
The MGC is a bipartisan commission consisting of five members appointed by the state’s governor, attorney general and treasurer. The current five members are:
- Cathy Judd-Stein (Chair)
- Eileen O’Brien
- Brad Hill
- Nakisha Skinner
- Jordan Maynard
Before lawmakers settled on a sports betting bill, however, the MGC was busy preparing for the possibility of sports betting legalization. It focused on the advertising blitz that accompanies both sports betting launches and major sports broadcasts.
“We really did think about the impact of gaming advertising,” Judd-Stein said. “So we asked our research responsible gaming director, Mark Vander Linden, if he would look into developing a white paper that would focus on responsible gaming conservation for gambling advertising that ultimately was published in June 2022.”
The MGC also completed another white paper about the landscape of sports betting in the US and internationally.
“(That was) really at the request of Representative (Jerald) Parisella, who said, ‘You know, you’ve got this one white paper that’s kind of dated.’ And I said, ‘We’ll get an update to you immediately,'” Judd-Stein said.
Once the sports betting bill finally went to the governor’s desk for a signature, the MGC had already begun looking into some of the major issues they’d confront after the bill’s signing. However, there were still many details to hash out.
Retail launch: 6-hour meetings and lots of feedback
The regulatory framework that the MGC’s outside counsel initially produced contained about 250 regulations that the commission “would probably need to enact or consider” for sports betting in Massachusetts.
“A lot of them came from looking at our regulatory framework under casino gaming,” Judd-Stein said, “and a lot had to be tailored for the needs of sports wagering, both retail and online.”
The process of debating specific regulations included daily meetings that could run as long as 4-6 hours. During these meetings, the MGC was also developing the license application that sportsbook companies would have to fill out.
“At the time, we didn’t know if it would be an extensive competitive process, because the legislature contemplated for us to report only up to seven online sports wagering licenses,” said Judd-Stein, who noted that, of course, the number raised to 15 online sports betting licenses.
So began the meetings with sports betting operators, sports leagues, the players associations, and experts in responsible gaming, advertising and broadcasting. After developing the application, the MGC then had to decide how to evaluate the application.
“For instance, how will you address diversity in terms of your employment numbers, in terms of your spend, in terms of your supplier diversity?” Judd-Stein said. “Where are you going to expand equitable opportunities for (Minority Business Enterprises) and (Women Business Enterprises)?”
That didn’t include the time it took to review the applications once they were created.
The four months between the sports betting bill, Aug. 10, 2022, and retail sports betting’s launch, on Jan. 31, 2023, may have seemed long to bettors. But the long days of public meetings writing regulations probably felt longer to the commissioners.
Online launch: Compressing 11 months of work into 38 days
After retail sports betting launched in January 2023, Massachusetts regulators still had to create mobile sports betting safeguards. One of the main challenges was ensuring that sportsbook apps could verify that their users were eligible to place bets.
“In other words, (mobile bettors) could not be under 21 (and) were not on our voluntary self-exclusion list,” Judd-Stein said.
That was only the beginning.
Each interested sports betting operator also had to present different features of their apps to the MGC.
“We were able to see their KYC (Know Your Customer information), their limit-setting for responsible gaming settings on amounts wagered, on time spent on the device, their cooling off periods,” Judd-Stein said.
Mobile sports betting went live on March 10, less than six weeks — just 38 days — after retail sportsbooks launched in Massachusetts. That’s fast compared to other states that have legalized both retail and online sports betting.
Like, really fast.
Michigan’s online sportsbooks didn’t launch until 10 months after retail sportsbooks. In Maryland, it took 11 months for online sportsbooks to go live after the state’s retail books.
Clearly, the work that went into the MGC’s pre-launch discussions paid off.
Promotional write-offs policy
In many states, when sportsbooks award bonus credits, those credits are deducted from the pool of sportsbooks’ taxable revenue. In Colorado, the write-offs have been so large that taxable revenue has been cut by over half. As for other states, these write-offs have cut sportsbooks’ taxable revenue by 40%.
That means far lower tax revenue for the states, which relied on the promise of increased tax revenue to legalize sports betting.
Arriving at the decision to manage write-offs in the first place was challenging. It began with a vote in January 2023 to decide whether the MGC had the authority to make those policies.
The five commissioners disagreed about whether the sports betting statute gave them the authority to implement a write-offs policy. Two commissioners adopted the reading of the MGC’s outside counsel that the statute did not give them the authority to implement a policy. Three believed the statutory language was vague enough to allow them to set a write-offs policy.
The 3-2 vote decided the commission could make a rule on promotional write-offs.
As of today, sportsbooks aren’t allowed to write off promo credits in Massachusetts. This fulfills one of the mandates for the MGC to guarantee a profitable sports betting industry for the state. But it makes marketing more expensive for sportsbooks.
Massachusetts regulators followed Ohio’s lead in prohibiting promotional write-offs completely. However, Ohio will phase in write-offs every four years until 2031. Massachusetts, meanwhile, has announced no policy to phase write-offs in.
The next major regulatory issue
The promotional write-off policy was a major announcement. But there are many other issues for the MGC to focus on next.
“The most immediate — it’s not necessarily a reg — but we do have coming before us the Category 2 application, which is Raynham’s, the simulcast facility there,” Judd-Stein said. “As you know the law permits Raynham to have a sportsbook as well as one tethered online sports wagering (platform).”
The MGC will discuss Raynham Park’s Category 2 license application — in conjunction with Caesars Sportsbook — on April 12.
As for additional issues, the commission might announce its advertising regulation at that same meeting.
“We’ve spent months on that advertising regulation, and we’ve been able to secure so much input from so many experts and key stakeholders,” Judd-Stein said.
For all the long meetings, the intellectual pace is unrelenting. Weighing decisions between so many stakeholders makes regulators’ jobs difficult. Doing this job poorly leads to either weak regulators that fail to protect consumers, or overzealous regulators that make industries unprofitable without proportionately protecting consumers.
It’s a critical job to get right. And it’s difficult to avoid leaning in one direction or the other.
The MGC’s work continues with long hours, difficult trade-offs and the added challenge of performing their work in the public eye. Reflecting on the six months between the sports betting bill’s signing and mobile sports betting’s launch, Judd-Stein acknowledged the deluge of information commissioners had to absorb and accurately synthesize.
“You can’t not be seasoned,” she said, “after the last six months.”
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