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THE ARGUMENT

Should Massachusetts permanently legalize and impose a tax on sports fantasy betting?

The DraftKings office in Boston. AP Photo/Charles Krupa

YES

Eileen M. Donoghue

State senator, Lowell Democrat

<b>Eileen M. Donoghue</b>

Daily fantasy sports has become a growing part of people’s pastimes and an exciting new part of our innovation economy. It flourishes worldwide, with 59 million people playing last year in just the United States and Canada. Moreover, DraftKings, the largest operator in America, is based in Boston.

Last year, the Massachusetts Legislature temporarily legalized daily fantasy sports, online games where players create fantasy teams consisting of real-life athletes and play for prizes based on their real-life performance. We established a commission to do a deep dive into online gaming and offer a permanent solution. I cochaired this commission, which concluded that daily fantasy sports could be carefully and responsibly legalized to operate safely. The commission also recognized that daily fantasy sports has significant potential to produce local jobs and generate new revenue for the state.

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Like all gaming in Massachusetts, daily fantasy sports should be taxed at a fair rate to defray expenses that the state could incur from its activities. Operators of the games currently pay zero taxes on their revenues in Massachusetts, in stark contrast with our casinos and slots parlors that must pay between 25 percent and 49 percent in taxes. Permanently legalizing daily fantasy sports is not without risk, but, if done right, could provide distinct benefits to the state while allowing millions of fans to continue playing a game they love.

I recently filed legislation that keeps the sunlight on this industry by permanently legalizing daily fantasy sports. It requires operators to pay a fee (thus costing taxpayers nothing) to be registered and regulated by the Massachusetts Gaming Commission, and guarantees that commonsense consumer protection regulations are followed that mandate transparency, accountability, and responsible gaming behavior. The bill also includes a reasonable 15 percent tax on daily fantasy sports revenue, significantly lower than casinos or slots, but on par with rates already set in New York, Pennsylvania, and Delaware.

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Daily fantasy sports is a homegrown industry and one worthy of support. We should recognize it for what it is and put to rest any lingering questions about its legality once and for all. Massachusetts must do so with the proper oversight and the right regulations in place to protect consumers, properly vet operators, and safely grow this new business in our state.

NO

Les Bernal

National director of Stop Predatory Gambling, Lawrence resident

Les Bernal

Massachusetts citizens lost more than $1.4 billion last year to state government-sanctioned gambling enterprises, the difference between money spent on Lottery tickets and prizes awarded.

But some corporate gambling interests and politicians want to make our citizens even bigger losers. They are lobbying for new legislation that would permit online gambling, the biggest expansion of gambling in state history. Nearly 70 percent of Massachusetts voters oppose online gambling.

The legislation, disguised as a bill to allow “daily fantasy sports,” is a naked attempt to legalize online casinos and lottery by the backdoor. It would allow the state — if it chooses — to bring online gambling into every home and smartphone in Massachusetts, 24 hours a day, seven days a week.

One of the special interests for the bill is fantasy sports operator DraftKings. The company has never turned a profit but has openly discussed becoming an online sports book if the United States legalizes sports betting. By leveraging its database of mostly young male users, DraftKings is positioned for a potential financial windfall if it were to partner with a gambling operator that already has a sports betting platform.

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Some politicians tout government-sanctioned gambling as a way to raise tax revenue. But history has shown repeatedly that this argument is either overstated or wrong. A 2016 report by the Rockefeller Institute at SUNY-Albany found that while states creating new revenue streams from gambling may see momentary bumps in tax income, “the revenue returns deteriorate — and often quickly.”

There is one revealing truth most gambling operators and the politicians they partner with have in common: With the zeal of a teetotaler, they don’t gamble. These hypocrites cause life-changing financial losses for thousands of people.

It’s not surprising one of the founders of DraftKings told the Globe that prior to starting the company, “I had never even stepped foot in a casino. The three of us have computer science degrees. We’re a bunch of dorks that wanted to build something cool.”

During a time when Americans of all political stripes agree our country could be doing much more to provide opportunity for all, it is wrong for the state to team with corporate gambling interests to redistribute even more wealth away from ordinary citizens to society’s most powerful.

This is an informal poll, not a scientific survey. Please vote only once.


As told to Globe correspondent John Laidler. He can be reached at laidler@globe.com.

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