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Massachusetts Sports Betting Could Aid State Economic Recovery

Sports betting has been included in an economic recovery plan for Massachusetts, meaning that it could be set for a fast-track into law. 

H.4789 aims to regulate the vertical across both online and mobile platforms, as well as within land-based venues. 

The state introduced a new economic development package bill last week, which aims to assist financially in the fallout from the COVID-19 pandemic. 

In addition to sports betting being legalized, the bill also seeks to permit the sale of lottery tickets online. 

The legislature has already looked over the sports betting proposals

The online lottery proposal was added by the state legislature, having not been included in the original version. Meanwhile, some changes have been made to sports betting regulations too. 

Originally, sports betting operators in Massachusetts would have had to pay 15% of their gross gaming revenue (GGR) in tax. However, that has now risen to 30%. Some wanted it as high as half, but a happy medium was eventually settled on. 

Online lottery operators’ admin and operational costs will not be allowed to surpass 15% of the revenue they make from ticket sales. 

Other practicalities of sports betting in Massachusetts 

If sports betting is legalized in the Codfish State, the Massachusetts Gaming Commission would overlook all related regulatory matters – which includes handling the licensing process. 

There are three separate licensing categories that would be available to sportsbooks. The first, a.k.a. Category 1, allows for online, in-person and mobile sports betting. 

Category 2 enables an operator to take in-play bets at a racetrack in the Bay State. There has been a slight amendment to the initial piece of legislation, as this license now also allows for mobile wagering. 

Category 3 licenses would be available to operators who wish to only offer online and mobile sports betting services. 

Operators would be required to pay $250,000 for a license if they wish to sell sports betting services in Massachusetts. This permit would be valid for five years, with renewal possible upon the payment of a $100,000 fee. 

Temporary licenses will also be available. These would cost $50,000 initially and last for two years. Once they have expired, operators would need to apply for a permanent operating permit. 

In addition to their annual tax, operators would also pay 1% of their GGR to sporting venues in the state. This money would be used to uphold sports betting security and integrity. 

Sports betting in Massachusetts will be available to residents aged 21 and over. 

Support for sports betting in Massachusetts 

In recent weeks, Governor Charlie Baker has said that he “absolutely” agrees that regulated sports betting could contribute vital money to state coffers. His administration has filed legislation related to the vertical in a bid to push forward with it before, but little progress had been made prior to the pandemic. 

Speaking earlier this month, he said that “it [sports betting] would certainly generate revenue and it would be something that a lot of people would be interested in here at home as opposed to doing across the border. 

Another supporter of legalized sports wagering is David Friedman, Senior Vice President of Legal and Government Affairs for the Boston Red Sox. He acknowledged a few weeks ago that sports betting alone “wouldn’t fix the state’s massive budget deficit”. However, he also said: “to use baseball terms, while it may not be a grand slam, it’s a solid single”. 

Massachusetts’ state budget deficit 

According to various sources published in May, Massachusetts faces a state budget deficit of between $6 billion and $8 billion

Job losses could cause the state to lose $1.9 billion in taxes, according to MassLive. Meanwhile, $2 billion may be lost through sales taxes. 

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