New revenue source eyed during economic downturn
CONSIDER ITS UNCERTAIN ODDS as falling somewhere between a Hail Mary pass and a slam dunk.
With a week left before the scheduled end of the legislative session, the Massachusetts House just threw sports betting back into the mix of major issues that will be discussed.
On Friday, the House Ways and Means Committee released its version of an economic development bill, which includes legalizing sports betting.
The bill’s release was cheered by industry groups who have been pushing for legalization. Sports betting companies DraftKings and FanDuel, along with casino company MGM and the Boston Red Sox, released a joint statement thanking the House for putting forward “comprehensive, consumer-focused sports betting legislation.” The groups said Massachusetts should legalize sports betting “to replace the huge existing illegal sports betting market and protect consumers and the integrity of our games.”
“As we confront an economic downturn and budget shortfalls, this is a unique moment for the legislature to act to protect consumers, create jobs, and bring an infusion of tens of millions of dollars in much needed revenues to the Commonwealth,” the groups wrote.
Sports betting, which can be done either virtually or in person, lets players place bets on real-life sports games. In May 2018, the US Supreme Court overturned a federal prohibition on sports betting, which had been illegal everywhere but in Nevada. Twenty-two states and Washington, DC, now have legal sports betting, including New Hampshire and Rhode Island.
Gov. Charlie Baker in January released his own proposal to legalize sports betting by adults online or at the state’s existing casinos.
On March 12 – just before the pandemic hit – the Joint Committee on Economic Development and Emerging Technologies released a revised version of a sports betting bill, which would similarly allow sports betting online and at casinos. But the bill was only signed by the representatives on the committee, not the senators. The State House News Service reported at the time that senators were taking a “wait-and-see” approach and said they would consider the bill once it came over from the House.
Antonio Caban, a spokesman for Senate President Karen Spilka, on Friday declined to say whether the Senate would support passing sports betting this session. “The Senate President has noted economic development as a priority of hers for this session,” Caban said. “We’ll of course review the components of the bill once it reaches the Senate.”
The bill released by the House Ways and Means Committee would allow sports betting online, through a mobile app, or in person at a state racetrack or casino. Only adults 21 or older could bet. Betting would be prohibited on high school sports. For college sports, bets could be made on games but not on the performance of an individual athlete.
The state would impose a 15 percent tax on an operator’s sports wagering receipts, plus a 1 percent tax distributed to Massachusetts sports facilities where games were played. The money would be earmarked for several different funds to benefit workforce investment, restaurants, youth development, local aid, public health, and a players’ benevolence fund that would benefit sports players’ charitable work.
The Massachusetts Gaming Commission, which already oversees the state’s casinos, would be tasked with issuing licenses and regulating and overseeing the industry. The bill lays out standards for things like licensing fees, conflicts of interest, the use of official league data, and background checks for licensees.
A lingering question is whether lawmakers will have the appetite in the last week of the legislative session to take on a complex issue that raises questions about game integrity, problem gambling, cheating, and impacts on actual sports leagues and athletes.
Some are likely to argue that the pandemic makes the need to pass sports betting even more urgent, since the state is facing a huge revenue shortfall. But experts say sports betting also tends not to be a huge moneymaker for states. Baker’s bill estimated that the state would collect $35 million annually from sports betting, although his bill had a lower tax rate than the House proposal.