Game Plan

Now that sports betting has been legalized, Massachusetts stands to make at least $70 million in gaming licenses and another $70 million per year in revenue once residents are allowed to start betting, according to local legislators who spoke at the annual fall Moakley Breakfast Forum, hosted by Suffolk University Sawyer Business School.

Panelists were asked, “Is the New Law on Sports Betting Good for Massachusetts?” Their answer: a resounding yes.

While the income from sports betting will be paltry compared to the more than $1 billion the Lottery gives back to communities each year, sports betting is another source of income the state can use—and an important one to capture. Every state around Massachusetts except for Vermont already has it.

While it’s not yet possible to bet on the Patriots or the Bruins within the borders of Massachusetts, Commissioner Brad Hill acknowledged that the Massachusetts Gaming Commission is working to green light the process in time for the Super Bowl in February 2023. For that to move forward, ensuring the integrity of sports betting in the Commonwealth needs to happen, which means focusing on consumer protection, technology, suitable partner companies, and many other factors.

Additionally, to incentivize a return to in-person betting at the casinos, the new law will include a lower tax rate for bets made at retail locations and a slightly higher tax rate for bets made via mobile apps.

That was just one of the many takeaways from the fall 2022 Moakley Breakfast Forum, which asked “Is the New Law on Sports Betting Good for Massachusetts?” The panel was moderated by Professor Linda Melconian. Other insights:

Representative Jerry Parisella, House chairman, Joint Committee on Economic Development & Emerging Technologies, lead House negotiator, anticipates significant revenue for the state, both through licensing fees and betting itself:

“Massachusetts could generate about $70 to $80 million just in licensing fees before a bet is placed. Those licenses have to be renewed every five years—so every five years, we’re going to get that revenue from the license fees. As far as revenue from gaming itself, if you place a bet via retail, 15% of that will be taxed. If you bet via mobile, 20% of that will be taxed. So, the reason that we did a little bit lower tax rate for retailers, is we’re trying to incentivize people to show up at the casinos [to] bet, because that’ll generate a lot of economic development.

“The experts that we talked to say that Massachusetts is a wonderful sports environment, people love their sports in Massachusetts, and they feel like it’s really going to take off once it’s legalized. We’re probably one of the more productive states in terms of revenue for sports betting.”

Commissioner Bradford “Brad” Hill, Massachusetts Gaming Commission and former state representative, said the commission is aiming for a “Goldilocks approach” to regulate licensing across the state:

“The idea is to make sure that the people that are coming forward, the companies that are coming forward to get those licenses have proven resources. Five million dollars, given the scale of the market, is reasonable. At the same time, you want that competition, because if there are monopolies, they might not offer the best product to consumers, who are the people in Massachusetts.”

Considering the impact of Massachusetts casinos on the communities surrounding them, Hill said $20 million in community mitigation funds have been issued to help with infrastructure, training, police and fire upgrades.

Christopher Bennett, senior policy advisor to the Massachusetts speaker, said there is a lot of opportunity to appropriately regulate and support sports betting in the state:

“Massachusetts has had a long history of allowing for wagering on sports and horse racing and dog racing prior to its banning by the voters and the simulcasting of those types of races as well. I think the interest comes from the fact that we’ve played in this field. We’ve had successful partnerships and received the benefits of taking what had been previously illegal activities, or activities that were operating in a black and gray market, and bringing them within to a state-regulated field, and utilizing that as a way to drive revenue to the state budget and economic development, job-creation activities for the Commonwealth.”

The panel—which also included Senator Eric Lesser, Senate chairman, Joint Committee on Economic Development & Emerging Technologies, and Jonah Beckley, deputy chief of staff and general counsel to Senate President Karen Spilka—walked attendees through the history of legalized gambling in Massachusetts, starting with horse racing, which dates back to the 1930s, and the Lottery, which began in the early 1970s. From there they explained how the law worked its way through the Legislature and, now that Governor Baker has signed it, how it’s being implemented.

So is the new law good? Based on what was said at the Moakley Breakfast Forum, a lot of people are willing to bet on it.

The Moakley Breakfast Forum Series is co-sponsored each year by the Sawyer Business School, the Department of Public Service and Healthcare Administration, and the Moakley Center for Public Management.