The Massachusetts State House and Senate will form a conference committee to debate the details of a bill that would legalize sports betting.
On Tuesday during a brief informal session, the House refused to accept changes to the sports betting bill made by the Senate. A formal vote confirmed that the lower chamber rejected the modifications, meaning the matter will be hammered out in a conference committee composed of members of the Senate and House.
The major differences between the two bodies of state legislators are what the tax rate should be on sports betting and how many and what type of licenses should be made available. The Senate bill does not permit betting on college sports, while many members of the Massachusetts House support wagering on collegiate athletics.
Last month, the Senate passed its sports betting bill after more than 70 amendments were attached. The House passed its bill last summer, and some in that chamber have chided their Senate colleagues for moving slowly on the issue.
According to a study commissioned by the Massachusetts Senate Ways and Means Committee, the bill passed by the Senate would gather as much as $35 million in annual tax revenue for the state from legalized sports betting.
Tax Rate Is A Sticking Point
The Senate bill calls for a higher tax rate than the House is proposing. It calls for a 20% tax on gross sports betting receipts from retail sportsbooks, and 35% from wagers placed online or via a mobile app. Those figures would place the state among the highest tax rates in the U.S. sports betting market.
Higher tax rates may be inadvisable. Last week BetMGM Sportsbook announced that it is curbing its marketing and spending in New York because of the 51% tax rate imposed there.
The House bill that passed with bipartisan support in 2021, specified that revenue from retail sports betting should be taxed at 12.5%, and set the rate for digital and mobile sports betting revenue at 15%.
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Senate Bill Limits Sportsbook Advertising
Another unusual provision in the Senate bill would prohibit sports betting advertising immediately before, during, and following live broadcasts of sporting events. For example, a sportsbook could not run an ad that appeared during the pregame of an NFL broadcast, during an NBA game, etc. There is a similar law in the United Kingdom.
Currently, there are four states bordering Massachusetts that have sports betting in some form: New York, Connecticut, New Hampshire, and Rhode Island. Some industry experts view Massachusetts as a potentially large market despite the small population, because of the immense popularity of professional sports teams in the state.
Among legal sports betting markets that are operating in the United States, only Oregon does not permit collegiate betting, and Connecticut has a restriction that allows only futures bets on college sports. The bill that passed the Massachusetts House would allow it for those age 21 or older.
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AGA Gets Into The Game
The American Gaming Association sent a letter to the Massachusetts General Court expressing concern that legislators are considering a ban on college sports betting. The letter notes that if sports bettors are not allowed to bet on college games through the legalized sports betting apps, they may not bet on the legal apps at all because they’d rather keep their sports betting funds in a single account.
That means they would stay with the illegal offshore sportsbooks the AGA is trying to crack down on.
Competitive, legal sports betting markets benefit consumers, strengthen responsible gaming, and are the best way to fight the pervasive illegal market.
— American Gaming Association (@AmericanGaming) May 19, 2022