On March 23, the Massachusetts Gaming Commission (MGC) reiterated that it would not allow sportsbooks to write off promotional credits from their taxes. Based on promotional write-offs in other markets, this policy could double the state’s expected sports betting revenue.
Revenue for the state is a tax expense for sportsbooks. It leaves less net revenue for sportsbooks to reinvest. In other words, the best-case scenario for the state’s tax revenue is the sportsbook’s worst.
However, it’s not an unbearable expense. Sportsbooks will still turn profits and award bonuses. Ohio and Massachusetts have both banned promotional write-offs and sportsbooks have still offered large welcome bonuses and continual bonus promotions.
When it comes to sports betting in Massachusetts, concerns about bonuses tapering off solely because of promotional write-offs are almost certainly overblown.
In other words: No, your promos in Massachusetts likely won’t suffer with sportsbooks not being able to write them off.
More than just welcome offers in Massachusetts
Sportsbook welcome bonuses are large, but those aren’t the only bonuses that sportsbooks offer. Massachusetts sportsbook apps also offer smaller bonuses for major events, and even smaller ones to encourage continued betting.
The smallest MA sports betting bonuses can be personalized. Sportsbooks periodically send customers small bonus offers in the hopes they’ll increase their customers’ activity. These small bonuses can be automated and fine tuned to ensure a sportsbook isn’t overspending.
In FanDuel’s Capital Market Days presentation, FanDuel claimed it spent 29% of its revenue on promotions in 2022. This was lower than its two unnamed competitors, who spent 44% and 64% of their revenue on promotions respectively.
These bonus offers are different from odds boosts, which offer higher potential payouts on a line either as part of a featured parlay, or to attract money to one side of a game’s line. Odds boosts aren’t paid in bonus credits or written off a sportsbook’s taxable revenue.
Most states allow promo write-offs in some capacity
Over 30 states have legal online sports betting, and almost all of them allow sportsbooks to write some or all of their promotional credits off. Although states are reexamining those policies, major sportsbook brands have profitable operations in older markets that can fuel growth in new ones.
It’ll take more than two states eliminating promotional write-offs to change the sports betting industry’s reliance on bonus credits.
If you or a loved one is experiencing problems with gambling, call 1-800-327-5050 or visit www.mahelpline.org/problemgambling to speak with a trained specialist for free, 24/7