Have Circumstances Forced Massachusetts’ Hand On Sports Betting?

By this point, we’re sure you’ve all read a number of articles about sports betting. We’re therefore going to assume that you know a few things. We imagine you know, for example, that sports betting has been legal throughout the United States of America since a landmark Supreme Court ruling in 2018. We imagine that you also know that several US states have acted on that ruling and opened up sports betting avenues for their residents already. Some of them, for example New Jersey, are making hundreds of millions of dollars in tax revenue from the activity. Not everybody has, though. There are some states that are still wringing their hands and wondering which way to go on the issue. There are even a few (more religiously conservative) states who have no plans to permit sports betting.

Until very recently, the great state of Massachusetts was firmly in the ‘wait and see’ camp. The state’s legislators and politicians have never spoken out forcefully against the idea of introducing sports betting, but nor had they ever voiced any great enthusiasm for doing so. That was before everything changed earlier this year. Like just about every other state in the USA (and every country in the world, with a few exceptions), Massachusetts is looking at enormous budget shortfalls due to the temporary closure of many of its businesses and the loss of income that came as a result of that. We all know why that happened – it’s the same reason that most of us are currently involved in daily arguments about whether we should or shouldn’t be wearing masks. The economic damage done to Massachusetts during this period, when fully costed, is expected to come to around six billion dollars. The state can’t afford to lose out on a sum like that and do nothing about it, and so anything that can make money quickly suddenly looks like an attractive prospect. Sports betting falls into that category.

There isn’t much time or space on this year’s legislative timetable to squeeze in any act or change to the law that would clear the way for sports betting to begin in the state, but legislators are going to give it a try anyway. According to several news outlets and people close to the situation, a brand-new sports betting bill is going to be introduced in Massachusetts in the very near future – and when it does appear, it’s going to be fast-tracked. The proposals are set to become part of a new economic development bill that also covers new education, tourism, and job training opportunities within the state. The bill is wide-ranging and far-reaching, but it’s the proposals that relate to sports betting that are likely to generate the most interest.

Unlike some of the other states that have opened themselves up to sports betting as a relatively closed shop, Massachusetts appears to be open for business to anybody who wants to come and operate a sports betting venue or business within the state so long as they’re happy to pay a quarter of a million dollars for a five-year license, and then a further one hundred thousand dollars for each five year period after that. Taxation on all bets placed will be set a fifteen percent, and an additional one percent of each bet will be used to fund sports venues and other sporting facilities within the state. The tax rate is higher than several of the most successful sports betting states, but that isn’t expected to dampen the enthusiasm of companies who might be considering setting up shop in Massachusetts.

One of the most remarkable aspects of the bill is the fact that it provides for both offline and online sports betting. The online aspect of the offer was unexpected on account of the fact that Massachusetts’ current gambling laws don’t make any reference to online gambling at all. Playing slot games at websites and casinos is something of a gray area when it comes to state law. Citizens of the state are able to access online slots websites and place bets, but the sites are operated by entities based outside the state. While it isn’t technically illegal to own or operate an online slots website inside Massachusetts, it isn’t technically legal to do so either. The fact that a new state law will now specifically permit online gambling may encourage the creation of the first Massachusetts-based slots websites, which in turn will be another revenue stream for the state as it attempts to balance its books.

No matter how quickly the new bill can be introduced, voted upon, and implemented, it will miss what many people expect to be a considerable rise in sports betting activity over the next few weeks. With several American sports now returning to the field, including the hotly-anticipated return of baseball (provided there aren’t further unexpected postponements), betting companies are bracing for an influx of wagers from millions of Americans, including many who have never placed a bet on a sport before. Sports betting fever was just beginning to take hold in a number of states before the ax unexpectedly fell on major sports, and companies who have invested millions of dollars in setting up facilities have been left carrying the can as they awaited the all-clear to be given for sport’s return. That moment has now arrived, but sadly it’s come too fast for Massachusetts and its budget deficit. Missing this wave isn’t a good reason to miss the next one, though, and if the bill is waved through as quickly as it’s expected to be, the state should be in a position to profit from sports wagers by late 2020.

In amidst all the excitement and haste about this issue, nobody seems to have been able to come up with an estimated figure regarding what sports betting might be worth to Massachusetts. We’ve seen some reports that list numbers as high as three hundred million dollars per year. We’ve seen other equally-credible reports that place that figure as low as fifty million dollars in tax revenue. Clearly, fifty million dollars per year isn’t going to plug a hole as large as six billion dollars, but when times are hard, every little helps. We don’t imagine that everyone in the state will be happy that this is the way that legislators have decided to go, but in times of economic hardship, it’s a case of “needs must.”

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