Key senator releases sports betting proposal

SEN. ERIC LESSER, a key player in the state’s debate over legalizing sports betting, on Monday laid out his vision for the state’s latest gambling expansion, unveiling a proposal that is aggressive on taxation but would bar wagering on college games.

Since the US Supreme Court legalized sports betting nationwide in May 2018, at least 20 states have started allowing it and others are on the way to doing so. Lesser said taking a cautious approach in Massachusetts let policymakers see what worked and what didn’t elsewhere. Lesser said he believes his bill strikes a balance by legalizing sports betting while including “some of most comprehensive and strict consumer protections and protections for athletes anywhere in the country.”

“The idea is to bring sports betting into the daylight, legalize it, and in a real-time way monitor it so potential violations or problems can be quickly dealt with,” Lesser said in a Zoom call with reporters.

Lesser, a Longmeadow Democrat, is the co-chair of the Joint Committee on Economic Development and Emerging Technologies, along with Rep. Jerald Parisella, a Beverly Democrat. That committee will craft any sports betting bill that is eventually brought to the full Legislature. Lesser’s proposal is significant because of the three parties needed to legalize sports betting – the House, Senate, and governor – the Senate is the only one that has not yet taken a clear stance in favor of it.

But it also sets the stage for significant debate over how sports betting is structured, with Lesser proposing a higher tax rate than several of the other proposals and a more limited scope of betting.

For example, while Lesser’s bill – like one filed by Gov. Charlie Baker – would prohibit betting on college sports, a proposal filed by the House Ways and Means Committee last session would allow bets on the outcome of college sports games, though not the performance of individual student athletes. A proposal by Sen. Brendan Crighton of Lynn would allow betting on all college teams not from Massachusetts.

Lesser is proposing a tax rate of 20 or 25 percent, depending on whether it is done through a mobile app or at a casino. Baker’s proposal would tax sports betting at a rate of 10 or 12.5 percent, depending on whether the betting is done in person or online. The earlier House proposal envisioned a 16 percent tax.

Despite the differences, Lesser’s bill remains a significant step in the process, and some advocates say they see some indication that there is real momentum behind sports betting this session, which was lacking last year.

Baker released his own sports betting bill in January 2019, at the beginning of the last legislative session. But the debate largely got shelved with the outbreak of the coronavirus pandemic last March. Baker refiled a sports betting proposal as part of his fiscal 2022 budget proposal in January, and his budget for next year counts on the state taking in $35 million in sports betting revenue.

The House did revive the sports betting discussion briefly in July 2020 by including it in the House version of a must-pass economic development bill. However, the bill’s final version did not include sports betting. Lesser, the Senate’s lead negotiator, said at the time that he did not think the economic development bill was the right vehicle for it.

The new House speaker, Ron Mariano, has been supportive of legalizing sports betting.

Lesser’s bill, filed Friday, would allow sports betting at the state’s casinos and racetracks and through online or mobile apps by adults 21 and over. Sports betting would only be allowed on professional, not college, sports. The industry would be overseen by the Massachusetts Gaming Commission.

Under Lesser’s proposal, the application fee would be $1 million to $2 million with initial licensing fees of $1.5 million to $7.5 million, plus renewal fees every five years. The fees would vary by license type, with online-only companies paying higher licensing fees than physical casinos and racetracks. The bill would impose a tax of 20 percent of sports wagering receipts for the casino and racetrack licenses, and 25 percent for digital-only licenses. A 25 percent tax would also be imposed on fantasy sports betting, which has been legal in the state since 2016 but not taxed.

Among the consumer protections: Bettors could not use credit cards. People with gambling addictions could place themselves on a voluntary “self-exclusion” list. Ads could not target people under 21. A confidential helpline would let players and coaches report if they were being coerced to influence a game.

Lesser’s bill is one of more than a dozen proposals that will be considered by the Joint Committee on Economic Development and Emerging Technologies. Even if versions pass the House and the Senate, they will likely have to be reconciled by conference committee negotiators before going to Baker.

Key details to be worked out include things like the tax rate, licensing fees, whether college sports will be included, what types of bets will be allowed, how to address problem gambling, and what kind of protections will be put in place to avoid corruption and protect athletes and bettors.

A 2018 report on sports betting done by the Massachusetts Gaming Commission estimated that state tax revenue from sports betting would net anywhere from $8 million to $61 million. That estimate was based on tax rates that ranged from 6.75 percent to 15 percent.