Online sports betting launches in Massachusetts
Tightened regulations on advertising likely after AG’s office sounds alarms
By 
SIX OPERATORS started taking online sports bets at 10 a.m. Friday, launching a new era of Massachusetts gambling one day after gaming officials and the attorney general worried about how to protect vulnerable populations from being inundated with gambling advertisements.
“Gambling in our state is about to enter a new phase,” Pat Moore, first assistant attorney general, said during a six-and-a-half-hour meeting of the Massachusetts Gaming Commission on Thursday. “Until now, legal gaming has been predominantly been confined to a handful of brick and mortar sites. Now every smartphone has the potential to be a sports book, and sports betting apps are on the verge of becoming mass market products in the Commonwealth.”
The state crossed that line with fanfare on Friday. Local legislative leaders, including House Speaker Ron Mariano, and sports stars celebrated the milestone outside DraftKing’s Back Bay headquarters.
“While our company presence is now international in scale, Massachusetts remains our home,” CEO Jason Robins said. Of its humble Watertown roots and its 1,300 local employees, he said, “we are the true hometown team in Massachusetts and I can’t wait for local eligible customers to experience world class mobile sports betting with us.”
The Boston-based DraftKings was one of six apps ready to go on Friday, after the gaming commission also voted to grant Category 3 operating licenses to FanDuel, BetMGM, WynnBet, Barstool Sportsbook, and Caesars Sportsbook. All were set to launch on Monday morning. Four other apps granted initial approval could be on the way soon – the gambling app betr hopes to be running in the state by next month, followed by mid-year additions Fanatics and BallyBet. Betway is aiming for an early 2024 launch.
Lawmakers have long estimated about $60 million in state revenue each year from taxes on casino and operator revenue from sports betting. Operator revenue from mobile betting is taxed slightly higher – at 20 percent – than the 15 percent rate for in-person wagers.
Just a day before the first launch, representatives for Attorney General Andrea Campbell told the Massachusetts Gaming Commission that significant concerns remained about making sure sports betting is safe for consumers and does not target people under the betting age of 21. They elaborated in a nine-page letter calling for stronger regulations in the online gambling advertising space.
Promotions for the new apps have digitally papered Massachusetts, many offering credits or “referral bonuses, which often lock users in for a particular period of time or until they have spent a particular sum of money,” assistant AG Moore said. This is a deviation from advertising policies for other products with public health implications like alcohol or marijuana, he said, “and the burden should be placed squarely on the operators to show why any particular promotion should be permitted here.”
Connected TV platforms like Hulu or YouTube TV could show ads to audiences far too young to gamble, attorneys said. Moore said that is a “considerable concern,” but one “which we think is potentially fixable in the very short term” by requiring operators to exclude potential advertising targets based on age.
Not only could young people be “unduly exposed to potentially addicting products,” the AG’s office warned, but the design of these apps could keep even of-age players hooked. If the apps collect user data, they could deploy targeted “nudges” to remind players to place bets even if it wasn’t on their mind at the time.
Jared Rinehimer, the AG’s chief of data privacy and security, said the office is “concerned that these types of features when incorporated into sports betting apps will lead to substantial public harm by encouraging problem gambling.”
Attorneys asked for several regulations to be considered – including aligning online gambling rules with state consumer protection law, requiring that customers be given “frequent, clear, and conspicuous opportunities to opt out of this type of marketing,” and implementing strong age verification systems to exclude the under-betting-age population.
“I’m hearing each one of you indicate to us there are ways that we can make our regs better. And when we hear that, we are all ears,” Judd-Stein said. When regulations needed timely alterations before, “we’ve pivoted, we are nimble,” she said.