Massachusetts Sports Betting Tax to Aid Employment and Education

State policymakers in Massachusetts reached an agreement on legislation that will make sports betting legal in the state. The legislation sets the tax rate at 20% for online sports betting and 15% for retail.

These tax rates are on par with what other states have set as tax rates, as most states tax between 10% and 20% for retail and online betting

The legislation still needs to be signed by Gov. Charlie Baker. If signed, Massachusetts would become the 36th state to legalize sports betting, and State Senator Eric Lesser said that he “expects and hopes” the state will be live before the end of the year. 

The Massachusetts Gaming Commission will issue up to seven sports betting licenses for mobile apps, as well as separate licenses for the state’s three casinos and horse racing establishments. Lawmakers say that these licenses will allow the state to bring in $70 million or more in licensing fees every five years and at least $60 million in tax revenue from operators.

Tempering expectations: Gaming Commission says patience is important for Massachusetts sports betting launch

How the Massachusetts Sports Betting Tax Will be Spent

The legislation requires three new funds to be established. The first is the Sports Wagering Fund, which will collect tax revenues from operators and distribute them. The other two funds that will be created and financed by gaming taxes are the Workforce Investment Trust Fund and the Youth Development Achievement Fund. 

The Sports Wagering Fund will distribute the revenues into other funds at the following levels: 

The General Fund is a holding fund for all of the state’s tax needs. The Public Health Trust Fund and the Gaming Local Aid Fund have been established for several years due to the legal gaming at casinos, but both expect a boost when sports betting goes live. 

The Public Health Trust Fund helps to “mitigate the harms associated with gambling through research, prevention, intervention, treatment, and recovery support services” across the state. The Gaming Local Aid Fund distributes tax revenues to cities and towns throughout Massachusetts to support general annual aid requirements.

The two new funds focus on building up access to education and careers. The Workforce Investment Trust Fund is meant to develop career opportunities for low-income communities and “vulnerable” youth and young adults. The goal is to develop a grant program that empowers youth to gain job skills through education and training programs, improving adult literacy, and teaching hands-on skills and languages.

The fund will be responsible for determining the requirements for the grant, but it will likely target those under 30 who meet a variety of other criteria that would limit them from finding traditional employment. 

The Youth Development and Achievement Fund will be established to provide financial aid to students across the state studying at a college level, as well as giving grants to elementary, middle, and high school clubs and cultural events. It will also provide funding for after-school and extracurricular activities like athletics, student health, art, music, theater, language learning programs, and tutoring. 

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