Mass Still Deciding How To Handle Sports Betting Promo Tax Write-Offs

Written By Matthew Bain on March 3, 2023
Massachusetts still deciding how to handle sports betting promo tax write-offs, from

Massachusetts sports betting revenue, sportsbook tax payments to the state and the promos those sportsbooks offer all hinge on one undecided topic: How will Massachusetts handle promotional tax write-offs with its sportsbooks?

Most states allow sportsbooks to write off their promo bet credits when filing their taxes. This significantly reduces the amount of taxable sports betting revenue. Across the US, promo write-offs on average add up to 40% of gross revenue or 3% of total handle.

Based on PlayMA‘s projections for Massachusetts sports betting revenue in a fully mature market, allowing promo tax deductions would be the difference between $297 million in taxable revenue and just under $450 million in taxable revenue. Going further, that’s the difference between $56 million and $87 million in tax payments.

MGC has the authority to decide

The last time the Massachusetts Gaming Commission discussed promo write-offs was in January. Commissioners voted 3-2 in favor of giving the MGC the authority on how to handle these deductions. It has not been discussed since. MGC spokesperson Thomas Mills told PlayMA they don’t yet have promotional tax write-offs on a future meeting agenda, but they will.

“We know this is front of mind for so many,” Mills said, “so (we) will be sure to message it when the issue will come up.”

Sports betting operators are eager to learn if the state will allow tax write-offs for Massachusetts betting promos credits, because that decision could impact how many bet credits they’re comfortable giving to MA sports betting customers.

How do other states handle promo tax write-offs?

Again, these tax write-offs usually equal about 40% of gross revenue. That’s why some states are looking at changing their policies with promotional credit tax deductions.

Colorado, for instance, will eventually prohibit these write-offs. For now, it’s capping the write-offs at 2.5% of total handle.

Virginia is handling things differently. It allows sportsbooks to deduct promotional credits in their taxes. But it only allows this for the first 12 months after launch in the state.

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Matthew Bain

Matthew Bain started as Content Manager at PlayMA in 2022. Before that, he spent six years as a sports reporter and then deputy sports editor for the Des Moines Register, during which time he won nine statewide journalism awards, including the Genevieve Mauck Stoufer Outstanding Young Iowa Journalists Award. As deputy sports editor, Matthew oversaw the Register's recruiting coverage while also innovating the outlet's high school sports coverage. Matthew graduated from San Diego State and grew up in California, but he's somehow a Boston Celtics fan. Long story. Matthew also led coverage of Prop 26 vs. Prop 27 in the California sports betting election battle for Catena Media.

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