Massachusetts casinos and a handful of online operators would be allowed to offer betting on college and professional athletic events under new legislation state lawmakers advanced Friday, a major step in the pursuit of legalized sports wagering within the state’s borders.
The new proposal, which now moves to a key House committee, follows nearly two years of internal deliberations over how, and whether, the state should join the newly legalized sports betting landscape.
“After reviewing all of the data, after looking at all the pros and cons, we came to the conclusion that we could put a bill out that was in the best interests of the taxpayers . . . and the consumers of the Commonwealth,” said state Representative Ann-Margaret Ferrante, a Gloucester Democrat who is cochairwoman of the joint legislative committee that has been studying the issue.
The proposal would allow people 21 or older to bet on professional and Division I college athletic events. It would impose a 10 percent tax on the revenue operators make from in-person wagers at casinos and other brick-and-mortar sports books and a 12 percent levy on revenue from online bets. The bill would also place a 12 percent tax on daily fantasy sports, which have been operating untaxed in Massachusetts in recent years.
If the measure passes, Massachusetts would become the largest market in New England to legalize sports betting following a 2018 Supreme Court decision that allowed the practice to expand beyond Nevada.
Rhode Island and New Hampshire are now offering sports wagers, but the industry has been eagerly eyeing sports-crazed Massachusetts as an area for growth.
“When you look at the map, specifically in the Northeast corridor, Massachusetts is one of the remaining jigsaw puzzle [pieces] to be put in place,” said Sara Slane, founder of Slane Advisory, a consulting group working on sports betting.
Ferrante said her hope is to have sports betting up and running by the beginning of the NFL season in the fall. She said she expects the bill to generate $20 million to $25 million per year in tax revenue.
But the bill’s movement out of the Joint Committee on Economic Development and Emerging Technologies comes with a caveat: Senators on the panel did not sign on to this version, opting instead to reserve their opinion as it moves to the House.
Once the full chamber debates the measure, and should lawmakers approve it, the legislation would then swing to the Senate. But there’s no guarantee the Legislature will send a completed bill to Governor Charlie Baker’s desk before the formal legislative sessions ends in July.
Senator Eric P. Lesser, the committee cochairman, declined to say what aspects were sticking points, but said senators on the panel were “not ready to commit to that language or that version at this point.”
“We want to keep the process moving, and we’re in active conversations with them,” the Longmeadow Democrat said of House members. “No one has said no to anything. . . . The Senate will consider it if or when something is sent back from the House.”
Progressive senators have already raised concerns about expanding legalized gambling in the state, and members of its leadership, including Senate President Karen E. Spilka, opposed legalizing casino gambling before it became law in 2011.
“I’m not a big gaming guy, never have been a gaming guy. But we’ll take a good look at it,” said Senator Michael J. Rodrigues, the chamber’s budget chairman.
Under the proposal, both of the state’s resort casinos, in Springfield and Everett, as well as the slots parlor in Plainville, would be able to apply for licenses to offer in-person and online sports betting, after paying $1 million in fees.
The legislation also allows up to five additional online operators, who would have to pay the same amount.
Gambling industry interests in Massachusetts said they were happy to see the Legislature beginning to take action on sports betting. They argue that people are already gambling on sports here, through illegal bookies and unregulated offshore websites.
And casinos are seeking new revenue streams and different ways to get people in the door amid weaker-than-expected cash hauls on traditional games.
Encore Boston Harbor is planning to construct a sports bar, which it hopes to eventually convert into a sports book if state law allows it. And Penn National Gaming, the owner of the Plainridge Park slots casino in Plainville, recently bought a share of Barstool Sports, a popular online media brand that it plans to use to promote sports betting where it is legal.
"Legalized sports betting will generate much-needed tax revenue, keep Massachusetts competitive with its neighboring states, and make major inroads in the effort to curb illegal betting,” Eric Kraus, head of public affairs for Encore, said in a statement.
DraftKings, the Boston-based online betting and daily fantasy sports company, has been promoting its Boston roots on Beacon Hill as it seeks to expand its business in its home state.
“This bill is an important step toward eliminating the pervasive illegal market, creating a safe and responsible sports betting experience for sports fans in Massachusetts, and boosting the Commonwealth’s innovation economy,” the company said in a statement.
Baker has been urging lawmakers to move forward on sports betting since early in 2019, when he introduced a measure that would legalize it.
The bill now in the House allows wagering on college sports, which the governor had sought to prohibit. Some believe bets on college contests threaten the integrity of student athletics, while others say an all-out ban would drive gamblers to illegal markets.
The legislation would ban bets on the performance of individual college players, such as so-called prop bets. And it would not allow bets on the Olympics.
The measure would also allow horse tracks that offer live racing to operate in-person sports books. Such a distinction wouldn’t mean much in the short term ― Plainridge is the only track offering live racing this year ― but it could be an extra incentive for the several groups looking to operate races in coming years.
But it would bar any "employee of a sports governing body or any of its member teams” from having an ownership stake in an operator offering sports betting. Ferrante said that would exclude companies such as Delaware North — whose chairman, Jeremy Jacobs, owns the Boston Bruins and TD Garden.
The company has said it wants to partner with a mobile sports betting provider here.
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