College Sports Betting Is Major Issue In Massachusetts Sports Betting Bill Debate

Massachusetts seems to have somewhat of a love-hate relationship with legal sports betting. Many Bay State bettors love it and want state lawmakers to approve it. State lawmakers — although they may not hate it, exactly — still haven’t agreed to make sports betting legal. 

That could soon change. A group of six lawmakers, three from the Senate and three from the House, are meeting this month in a conference committee with hopes of reconciling sports betting legislation passed by the Senate last month and the House last year. Just a handful of issues stand in the way. 

Perhaps the biggest is whether or not to legalize college sports betting. 

The House voted in favor of allowing college sports betting as part of its sportsbook bill passed last July. The Senate, however, excluded college betting from its legislation passed April 28. To further complicate matters, at least two members of the six-member conference committee hashing out a final bill are at loggerheads on the issue. Reaching an agreement will be difficult. 

But the sports betting industry isn’t giving up. It hopes to have a majority of all Massachusetts lawmakers firmly in the pro-college betting camp before the current session ends in late July. 

AGA Cites Significant Public Demand For College Sports Betting

In a May 19 letter, the American Gaming Association (AGA) — a trade association for the US gaming industry — asked Massachusetts lawmakers to include college sports betting in legislation now being negotiated in the conference committee, citing “significant public demand for betting on collegiate sports.”

“States have appropriately recognized that the real public policy question is not if collegiate sports wagering will occur, but whether it should take place through legal or illegal channels,” the AGA wrote. 

“While some states with legal sports betting have imposed restrictions or prohibitions on in-state collegiate events and/or events involving universities from their states, no state law or regulation for sports wagering has an outright prohibition on collegiate sports.”

The College Sports Betting Payoff

Betting on college sports accounts for one-fifth of the total sports betting handle in the US, the AGA wrote in its letter. The association said it estimates college sports betting totaled $11.5 billion in 2021 – or roughly 20% of the $57.7 billion wagered on sports nationwide last year. 

That could mean a robust market in college-heavy Massachusetts. It could also mean hundreds of millions of dollars – a large percentage from college sports betting alone – depending on how much Bay State sports bets would be taxed. 

Current proposed online sports betting tax rates of 15% by the House (12.5%  retail) and 30% by the Senate (25% retail) would deliver a nice return to the commonwealth. The lower the rate, the more competitive the market, however, the AGA argued in its May 19 letter.

The association asked Massachusetts lawmakers to agree on a “reasonable tax rate” that allows legal sports books to compete against illegal offshore books that pay no tax at all. 

“Sports betting is a low margin business and will not be viable long-term if a burdensome taxation framework is adopted,” the AGA wrote.

Could 2022 Be The Year For Massachusetts Sports Betting?

Massachusetts has about eight or so weeks left to reach a sports betting compromise before the current session ends on July 31. Anything can happen by then, but the odds are increasing that 2022 is the year legal sports betting finally comes to the Bay State. 

Unlike many other US industries, sports betting continues to grow amid COVID-related downturns. Barron’s reported this week that US revenue generated by sports betting data firm Sportradar grew 124% in its March quarter. The company, which is already a supplier of data for a number of professional sports in the US, is now considering deals in college sports. 

It will be up to Massachusetts lawmakers ultimately to decide if sports betting — and college sports betting — is the direction they want to take. 

According to the AGA in its May 19 letter, legal college sports betting will be “critical” to the state’s success. 

“Prohibiting wagers on collegiate sports would .. hinder the growth and development of a legal sports betting industry in Massachusetts,” the AGA wrote. “Legal sports betting enhances consumer protections and helps promote transparency and game integrity, while also supporting job growth and generating tax revenue.”

AP Photo/Eduardo Munoz Alvarez

About the Author

Rebecca Hanchett

Rebecca Hanchett is a political writer based in Kentucky's Bluegrass region who covers legislative developments at Massachusetts Casinos. She worked as a public affairs specialist for 23 years at the Kentucky State Capitol. A University of Kentucky grad, she has been known to watch UK basketball from time to time.