One day after a trio of state lawmakers introduced their respective Massachusetts sports betting bills, Governor Charlie Baker followed up by submitting his own legislation.
Three separate sports betting bills were introduced Wednesday, January 16 within the Massachusetts General Court – the Commonwealth’s historical name for its state legislature.
State senator Bruce Tarr (R-Essex & Middlesex) submitted Senate Bill 908, which would task an 11-member commission with studying the merits of legal sports betting over a period of 180 days.
State senator James Welch (D-Hampden) submitted SB-882, which would grant the state’s three casino operators the exclusive right to offer sports betting – both in person and online – with a tax rate of 6.75 percent.
State senator Brendan Crighton (D-Essex) submitted SB-903, which would invite independent operators to pay $500,000 to obtain a Massachusetts sports betting license, along with a $100,000 annual renewal fee. From there, gross gaming revenue (also known as sportsbook “win”) would be taxed at a rate of 12.5 percent
But their proverbial thunder was stolen by the state’s Republican Governor, as Baker waited only one day before offering his own legislative package.
Less than two months after neighboring Rhode Island became the seventh state aside from Nevada to launch legal sportsbooks, Baker made it clear that he wants Massachusetts to be the eighth.
In a press release announcing the introduction of “An Act to Establish Sports Wagering in the Commonwealth,” Baker outlined his government’s motivations for pursuing a legal and regulated industry:
“Expanding Massachusetts’ developing gaming industry to include wagering on professional sports is an opportunity for Massachusetts to invest in local aid while remaining competitive with many other states pursuing similar regulations.
Our legislation puts forth a series of commonsense proposals to ensure potential licensees are thoroughly vetted and safeguards are in place to protect against problem gambling and illegal activity.
We look forward to working with our colleagues in the Legislature to pass this bill into law.”
Under the bill, prospective operators – which crucially would not be forced to partner with local casinos – would pay an application fee of $100,000. Once approved, operators would then pay several fees totaling at least $500,000 every five years to renew their license.
Licensed operators would be taxed at a rate of 10 percent on gross gaming revenue derived from brick and mortar wagers, while bets placed online would be subject to a 12.5 percent tax. All taxes collected would then be contributed to the state’s Gaming Local Aid Fund.
In an attempt to “level the playing field,” as Baker termed his proposal, the bill would also subject daily fantasy sports (DFS) operators like the Boston-based DraftKings and chief rival FanDuel to an identical 12.5 percent tax. As of now, DFS contests and their related revenue remain untaxed in Massachusetts.
DFS industry kingpin DraftKings – which launched New Jersey’s first online / mobile sportsbook in August of last year – has offered its full support for Baker’s bill.
Despite the newly instituted tax on DFS win, DraftKings is amenable to Baker’s proposal based on the absence of a casino partnership requirement.
In a public statement, James Chisholm – who serves as director of global public affairs for DraftKings – praised Baker’s Massachusetts sports betting bill as the state’s optimal route towards legalization:
“Baker’s administration estimates the plan would generate $35 million in revenue for Fiscal Year 2020.
Legal, regulated mobile sports betting provides the best mechanism to not only protect consumers, but to eliminate illegal offshore gambling, ensure game integrity, generate new revenue for the Commonwealth and fuel the growth of Massachusetts’ sports-tech sector.
We’re hopeful Massachusetts will seize the opportunity this year to establish a new national model of directly licensing mobile operators.”