Despite only nine full months of legal online sportsbooks on the market in 2023, Massachusetts recorded the seventh-largest tax revenue haul in the United States last year.
Massachusetts sports betting debuted online on March 10, 2023 and still managed nearly $100 million in tax revenue from the activity, placing it seventh among states with a legal market. This, according to a new report by Lending Tree.
Massachusetts sports betting tax revenue ranks 7th in 2023
The commonwealth ranked first nationally in terms of its increase of sports betting tax revenue from 2022 to 2023, at 11,547.5%. That’s because Massachusetts did not have active legal sports betting in 2022. Retail sportsbooks launched in January of 2023, and online came along about two months later.
Massachusetts sports betting tax revenue amounted to $99.47 million in 2023. Only New York, Pennsylvania, Indiana, Illinois, Ohio, and New Jersey pulled in more.
Massachusetts then uses the tax revenue from sports betting for a handful of different initiatives. Tax revenue is divided between the general fund (45%), Gaming Local Aid Fund (27.5%), Workforce Investment Trust Fund (17.5%), Public Health Trust Fund (9%), and the Youth Development and Achievement Fund (1%).
Only six states saw more 2023 sports betting tax revenue than Massachusetts
According to the Lending Tree report, The top ten states based on 2023 sports betting tax revenue are as follows:
- New York — $875.996 million
- Pennsylvania — $176.655 million
- Indiana — $175.387 million
- Illinois — $161.437 million
- Ohio — $136.296 million
- New Jersey — $111.092 million
- Massachusetts — $99.470 million
- Tennessee — $83.557 million
- Virginia — $74.420 million
- Maryland — $64.483 million
Massachusetts taxes sports betting operators at 20% of their taxable revenue from gaming. In five different months in 2023, MA reported in excess of $50 million in taxable revenue for its sports betting operators, which meant at least $10 million in tax revenue for each of those months. For the full year, taxable revenue from the eight online sportsbooks in Massachusetts was just under half a billion, at $497.3 million.
Massachusetts reports 11,547.5% tax revenue increase from sports betting
According to the LendingTree study, eight states reported increases in tax revenue from sports betting activity of at least 40.0%:
- Massachusetts (11,547.5%)
- Ohio (3,549.2%)
- Maryland (957.1%)
- Kansas (406.4%)
- Alabama (80.7%)
- Nevada (71.5%)
- Colorado (46.7%)
- Virginia (40.2%)
Among those states, only Nevada and Colorado had legal sports betting markets for the entirety of 2022.
Neighboring New York, which taxes sportsbooks at 51%, reaped the benefits of that lofty rate. During 2023, New York accumulated a whopping $875,996,000 in tax revenue. Pennsylvania trailed New York, nearly $700 million behind that total.
Massachusetts on pace to top $100 million in tax revenue for 2024
The only new market to log more than $100 million in tax revenue for 2023 was Ohio, which reported nearly $136.3 million. Massachusetts fell just below the triple-digit mark, collecting $99.47 million in 2023.
Given its pace already this year, Massachusetts should top $100 million in tax revenue from sports betting in 2024. The Bay State gathered almost $10 million in April sports betting revenue alone. Massachusetts has already collected more than $43 million of that goal during the first four months of 2024.
The state is also well on its way leapfrogging New Jersey in terms of overall tax revenue. While the Garden State has taken in roughly $286.7 million in tax revenue since its launch in June 2018, Massachusetts has already brought in $127.1 million in tax revenue in just 16 months.
