Introduced by Governor Baker, a New Sports Wagering Bill Filed for Massachusetts

• Gov. Baker has included sports wagering as a priority within the annual state budget proposal
• Eliminating “college sports wagering” is an issue to be debated within the legislature
• Nearby NE states enjoying sports wagering success or beginning service will be an incentive

Massachusetts Governor Charlie Baker has taken a proactive measure in trying to make sports wagering available for the state. Last Friday, as part of his annual state budget proposal to the Massachusetts Municipal Association, Baker introduced HD 678, setting a plan to legalize sports wagering for the state.

HD 678 proposes a sports betting framework that would allow online sports wagering via casinos and on websites and mobile applications that are not affiliated with a casino. As part of the rules, the bill also proposes to ban all wagering involving betting on colleges and all eSports wagering in Massachusetts.

Presently, the state’s two largest licensed casinos are MGM Springfield and Encore Boston Harbor. Massachusetts is the home to four major professional sports teams including the New England Patriots, Boston Red Sox, Boston Bruins, and Boston Celtics.

As per Governor Baker, he has been quoted involving this differentiating part of the new legislation:

The legislation also seeks to maintain separation between gambling on amateur and college sports. And between gambling and electron sports, or eSports. As a result, the legislation would prohibit wagering on these types of sports events.

New Jersey a Modeling Structure

Though not as large a population density as New Jersey, Massachusetts has a goal to be among the nation’s leaders and are seeking to follow their successful framework. The bill proposition by Gov. Baker echoes many similar rules within their legislation.

One advantage the state does have is attracting some of the biggest sports operators in the gaming industry when licenses do become available. DraftKings’s the sports wagering industry top operator by the handle is headquartered in Boston. They certainly would be a major factor and undoubtedly a favorite to partner among the state’s professional teams to gain “home field” opportunity.

As stated within Baker’s proposal, each applicant would be required to pay a $100,000 application fee, and the actual license would cost $500,000. The license would need to be renewed every five years if this current proposal is the bill that directly passes.

Casinos in Massachusetts would have the ability to apply for a retail sports betting license while offering online sports betting as well. In-person wagers would only be taxed at 10%. A much lower figure in comparison to other US states.

Online wagering would be slightly higher under HD 678 and taxed at 12.5%. Baker said he was also proposing to tax online daily fantasy sports at 12.5%.

The Impact and Outlook for HD 678

Governor Baker’s ambitious proposal is the third straight year that he has included sports wagering as part of his budget proposal, however, it has failed previously. The House of Representatives in MA did pass legislation in 2020 but it also failed to gain passage in the Senate.

Timing including aggressive legislation looming in nearby states Connecticut and New York may be the difference this round. New England states Rhode Island and New Hampshire have legalized sports wagering. There are also other sports betting bills on the table in Massachusetts, including SD 177.

No doubt the clause that bans wagering on college sports is the largest limitation involved with this new bill and would need to be addressed. While other New England states have written legislation to not include college wagering involving schools within their own states, they do not eliminate ALL college wagering. That severs a huge revenue opportunity for operators and subsequently tax opportunity for Massachusetts as well.

Upon potential passage, it has been estimated that HD 678 could create $35 million in state tax revenue. Including most of college, wagering could potentially raise that figure substantially.

eSports offers more limited prospects at this juncture although the future could be bright. The slow legal proliferation through many states has been due to the same common reason. That is, most players are under the traditional legal wagering age. Also, limited due to eSports current popularity as compared to general professional and college sports wagering.

With several other New England states either proudly announcing record-breaking sports wagering months or introducing new service, look for Massachusetts to move forward to their major announcement sometime soon in early to mid-2021.