Massachusetts Sports Betting

It is unclear whether Massachusetts lawmakers have any real interest in legalizing sports betting, though the state is now free to do so with SCOTUS declaring PASPA unconstitutional on May 14, 2018. This cleared the way for states to make their own decisions regarding sports betting.

What we do know is the state passed the Expanded Gaming Act in 2011. This allowed Penn National Gaming’s Plainridge Park Casino slot parlor to open in June 2015. The allow also greenlit two commercial casino resorts, the $950 million MGM Springfield and $2.4 billion Wynn Boston Harbor. Those properties are scheduled to open in 2018 and 2019 respectively.

We also know a number of the Massachusetts-based Native American tribes are lobbying the state for the right to open up Native American casino facilities. In fact, The Mashpee Wampanoag Tribe is moving forward with construction of the $1 billion First Light Resort & Casino in Taunton, Massachusetts. The casino should open in the summer of 2018.

Gambling is coming to Massachusetts in a big way.

Unlike some other states, Massachusetts did not challenge the federal ban on sports betting. However, Gov. Charlie Baker did sign a bill into law that legalized paid-entry fantasy sports in 2016, adopting Attorney General Maura Healey‘s regulations governing fantasy sports in the state.

There are no fees or taxes associated with fantasy sports operations in Massachusetts. However, that could change when the current regulation deal expires in 2018.

The state created a committee to study online gambling after passing daily fantasy sports (DFS) legislation. The committee’s existence signals that Massachusetts Gaming Commission Chairman Stephen Crosby appears to support the passage of online gambling legislation. He previously claimed online gambling is a reality in Massachusetts already and expressed a desire to regulate and tax it.

One might assume Crosby’s sentiment applies to sports gambling too, although the committee has not expressly considered it.

The current legal climate for sports betting

In 1992, the federal government passed the Professional and Amateur Sports Protection Act (PASPA). This essentially made Nevada the only state allowed to offer legal sports betting. It also grandfathered in existing parlay sports betting in Delaware.

The American Gaming Association (AGA) regularly called to repeal the law. The organization says Americans are betting billions on sports every year. Most of it is wagered with illegal bookies and offshore online gambling operations.

New Jersey challenged the law in an effort to allow legal sports betting. The state pursued the case for years, with the matter finally being taken up by the Supreme Court of the United States. SCOTUS heard oral arguments on the case in December 2017 and issued its decision deeming PASPA unconstitutional on May 14, 2018.

Whether Massachusetts will opt to regulate sports betting is currently unknown.

A more than $3.25 billion market

The American Gaming Association estimated Americans bet $154 billion on sports in 2016. It also claims nearly all those wagers were illegal.

Broken down by population numbers, that would mean Massachusetts’ population of approximately 6.79 million people bet an estimated $3.25 billion on sports in 2016.

Daily fantasy sports in Massachusetts

Massachusetts allows legal and regulated daily fantasy sports (DFS). Massachusetts Gov. Charlie Baker signed a bill into law legalizing DFS in 2016.

There are no fees or taxes on DFS operations in Massachusetts. However, the current deal expires in 2018. Some Massachusetts lawmakers are considering adopting a new schedule of taxes and fees. This includes tens of thousands of dollars in licensing fees and taxes of up to 12 percent on revenues.

Massachusetts does have a list of regulations in regards to DFS. The regulations include:

  • Players must be over 21 years of age
  • No college games and other amateur sporting events
  • Truth in advertising standards apply
  • $1,000 monthly deposit limit
  • Entries limited to the lesser of 150 or three percent

What would a legal sports betting market in Massachusetts look like?

Clearly, Massachusetts lawmakers respect the federal prohibition on sports betting. However, the state’s attitude towards gambling, in general, appears to be softening over time.

Passing the Expanded Gaming Act in 2011 meant opening up the state to commercial casinos. Penn National Gaming opened the Plainridge Park Casino slot parlor in June 2015. The $950 million MGM Springfield casino will open in 2018. Plus, the $2.4 billion Encore Boston Harbor casino will open its doors in 2019. None of these operations have or are considering adding sportsbooks.

In the meantime, the Mashpee Wampanoag Tribe is going ahead with construction of the $1 billion First Light Resort & Casino project in Taunton, Massachusetts. First Light plans to open in the summer of 2018.

Any kind of sports betting market in Massachusetts is likely to surround these commercial and Native American casino properties.

This became clear when Massachusetts lawmakers began considering legal and regulated online gambling in 2016. After DFS legislation passed, the state created a commission to study online gambling.

The commission, which is a nine-member committee of lawmakers, industry experts, appointees of the governor, attorney general, and gaming commission, has conducted several hearings.

At these hearings, the state’s three licensed commercial casino properties expressed an interest in being given the sole rights to operate gambling websites in Massachusetts. Massachusetts Gaming Commission Chairman Stephen Crosby appeared to agree. He has also stated his belief online gambling is already happening in the state. The real question is whether Massachusetts wants to take it out of the shadows, regulate it, and take a piece of the action.

Although the commission is not considering sports gambling, it’s not too far-fetched to assume these same thoughts would apply.

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