On Friday, March 10, 2023, Massachusetts became the latest state with legalized online sportsbooks when six operators successfully launched. At 10 a.m. on March 10, Barstool, BetMGM, Caesars, DraftKings, FanDuel, and WynnBET started accepting wagers from Massachusetts bettors over the internet.
The launch weekend was considered a huge success. More than 400,000 individual accounts were active over that Friday, Saturday, and Sunday, representing more than 5% of the state’s total population. The launch of mobile sports betting follows the introduction of terrestrial sportsbooks at three Massachusetts casinos on Jan. 31.
- 1 More About the Massachusetts Sports Wagering Act
- 2 MA Sports Betting Details
- 3 Where Does the MA Sports Betting Market Stand Today?
- 3.1 Category 1 (Retail Casino) Licenses (3 potential licenses)
- 3.2 Category 2 (Racetrack + Simulcast) Licenses (2 potential licenses)
- 3.3 Category 3 (Digital) Licenses
- 4 Massachusetts Sports Betting Projections
- 5 Massachusetts Offshore Sportsbooks a Viable Alternative
More About the Massachusetts Sports Wagering Act
Sports betting in The Bay State is governed by H5164the Massachusetts Sports Wagering Act. Initially, the Senate and House of the Massachusetts legislature had differing ideas about the proper level of taxes for sports wagers and whether or not betting on collegiate athletics should be allowed. This was reflected in two separate bills passed by each chamber, which were eventually reconciled by a conference committee.
After months of activity, the compromise bill passed the House on Aug. 1, 2022 with a vote of 151-2 and the Senate by a margin of 36-4. It went to the desk of Governor Charlie Baker (R) who signed it into law on Aug. 10.
MA Sports Betting Details
The Massachusetts Gaming Commission is charged with overseeing the sports betting industry within the state, which includes both retail and online sportsbooks. Individuals must be 21 years or older to place bets. Betting on college sports is allowed except that no bets can be placed on events involving Massachusetts collegiate teams unless they’re part of a tournament, like March Madness. Wagering on high school athletics is prohibited.
In order to offer sports betting in the state, an operator must be properly licensed. The licensing fee is $5,000,000 for five years, but applicants can seek one-year temporary licenses at a rate of $1,000,000 until their applications have been thoroughly vetted by the Commission. Should a temporary licensee be granted a permanent license, their $1 million payment is credited toward the $5 million that they would owe.
There are three categories of licenses envisioned by the legislation:
- Category 1: These licenses are available to existing casino operators in the state (which manage Encore Casino, MGM Springfield Casino, and Plainridge Park Casino). They’re allowed to host a single retail sportsbook as well as up to two online sports betting brands, which must each separately obtain Category 3 licenses as well.
- Category 2: These licenses are available to qualified racetrack and simulcast facility operators (Raynham Park and Suffolk Downs). They can operate a single physical sportsbook apiece along with one online sportsbook brand. The online sportsbook must separately obtain a Category 3 license.
- Category 3: These licenses are available to Category 1 and 2 license holders that wish to manage online sportsbooks. Additionally, up to seven licenses are available for online-only sportsbooks that aren’t connected to brick-and-mortar wagering facilities. These seven licensees are under no obligation to partner with any Massachusetts gaming firm.
Adding up the total possible sports betting opportunities in Massachusetts, we find that up to five terrestrial sportsbooks are allowed (three at casinos and two at racetracks) along with up to 15 online bookmakers (6 connected with casinos, 2 connected with racetracks, and 7 independent organizations).
Revenues and Taxes
As previously mentioned, sports betting licenses cost $1 million for a year or $5 million over five years. Furthermore, a non-refundable application fee of $200,000 is levied on each applicant for a Category 1, 2, or 3 license. This fee can be higher in the event that the costs to the Commission of investigating an applicant exceed $200,000. Certain supervisory employees of sports betting licensees must themselves obtain occupational licenses, which are good for three years and have a fee of $100 attached.
Gross betting revenue is taxed at a rate of 15% for retail operations and 20% for online business. Companies are not allowed to deduct promotional expenses from their revenues when calculating their tax obligations.
The $200,000 and $100 application fees for operator licenses and occupational licenses will go toward a Sports Wagering Control Fund. This is supplemented by investigation fees paid by operators who are believed to be in breach of the rules and certain other funding mechanisms. The Sports Wagering Control Fund is intended to provide the Massachusetts Gaming Commission with the resources it needs to oversee the sports betting industry.
License fees and taxes on sports betting revenue will go toward the similarly named Sports Wagering Fund. The Gaming Commission is the trustee of this fund and will distribute the money as follows:
- 45% to the state’s General Fund
- 17.5% to the Workforce Investment Trust Fund, which promotes employment opportunities for low-income areas and young adults
- 27.5% to the Gaming Local Aid Fund, which is transferred to the state’s cities and towns
- 1% to the Youth Development and Achievement Fund, which promotes education
- 9% to the Public Health Trust Fund, which is involved in combating problem gambling
Additionally, each Category 3 licensee that is not associated with a Category 1 or 2 licensee will have to pay $1,000,000 toward the Public Health Trust Fund
Official League Data
Curiously, Massachusetts is one of the few states to require the use of what’s known as “official league data.” This refers to records maintained by each sports league on the events and stats related to matches played by that league’s teams. This is a controversial requirement because it allows the leagues to sell information that, in most cases, is available for free elsewhere, e.g., in local newspapers or sports broadcasts.
As long as a sports governing body informs the Commission that it wants operators to use their official data, sportsbooks will be forced to comply within 60 days of being notified of this fact by the Commission. There are only a few exceptions to this mandate to use official league data:
- Pre-game wagers on the final outcome or score of a sporting event
- Cases where a reliable feed of official league data is unavailable
- Situations in which the league is unwilling to provide the required data “on commercially reasonable terms and conditions”
All online wagers must be placed by individuals physically located within the borders of Massachusetts. Curiously, waters up to three miles out from the Massachusetts coast are included within the geofence, so patrons of the several “cruise to nowhere” vessels based instate are able to bet on sports whilst enjoying the maritime casino action.
Online bookies are prohibited from accepting credit cards to fund accounts although debit cards are OK. The regulations drafted by the MGC also prohibit partnering with affiliates on CPA or revenue share deals, which is unusual because this is a time-honored method of drumming up business in the world of online gambling. This particular restriction has been waived until April 14, 2023, and it’s highly likely that betting corporations will lobby for it to be dropped altogether.
Operators are explicitly allowed to place bets with and accept bets from other operators. The only caveat is that any operator placing such a wager must inform the sportsbook accepting the bet of the identity of the operator making the bet. This may be useful for organizations that wish to hedge their positions, thereby reducing risk, but it may also provide an avenue for sportsbooks to attack any competitors’ lines that seem weak.
Where Does the MA Sports Betting Market Stand Today?
The fact that there are three separate types of licenses and distinct categories of operators that are eligible for each type may seem a bit confusing. To clear matters up, we have composed below a summary of all active and pending sports betting enterprises in the regulated Massachusetts market:
Category 1 (Retail Casino) Licenses (3 potential licenses)
Encore Boston Harbor: WynnBet Sportsbook – launched Jan. 31
MGM Springfield: BetMGM Sportsbook – launched Jan. 31
Plainridge Park Casino: Barstool Sportsbook – launched Jan. 31
Category 2 (Racetrack + Simulcast) Licenses (2 potential licenses)
Raynham Park: Caesars Sportsbook – not yet launched
Suffolk Downs – not yet applied for license
Category 3 (Digital) Licenses
Tethered to Retail Casinos (6 potential licenses)
Caesars Sportsbook in partnership with Encore Boston Harbor – launched March 10
WynnBet in partnership with Encore Boston Harbor – launched March 10
BetMGM in partnership with MGM Springfield – launched March 10
Barstool Sportsbook in partnership with Plainridge Park Casino – launched March 10
Fanatics Sportsbook in partnership with Plainridge Park Casino – yet to launch
Tethered to Racetracks and Simulcast Facilities (2 potential licenses)
Untethered Online-Only Licenses (7 potential licenses)
FanDuel – launched March 10
DraftKings – launched March 10
Betway – yet to launch
Betr – yet to launch
Bally Bet – yet to launch
We can see that all Category 1 licenses are accounted for, and in Category 2, both licenses will be spoken for once Suffolk Downs gets its act together and makes its license application.
In Category 3, Encore Boston Harbor and Plainridge Park have already allocated both of their slots. MGM Springfield has a slot available, but we have heard that it doesn’t intend to use it, instead preferring to focus its efforts on its own brand, BetMGM. Both racetrack online spots are open too, but we don’t expect much to happen on this front until they first debut their B&M sportsbooks.
As far as the seven prospective “untethered” licenses that are not dependent on any physical gambling presence in Massachusetts, five have already been awarded though we’re still waiting on the launch of three of them. There thus remain two licenses available. Competition should be fierce with such prominent betting firms as Betfred, BetRivers, Seminole Hard Rock, and Unibet all filling notices of intent that they’re interested in licensure.
Massachusetts Sports Betting Projections
Several New England states already have sports betting, like Connecticut and New Hampshire. However, Massachusetts with its much greater population is expected to grab significant traffic from these smaller markets. Similarly, the phenomenon of MA bettors heading across the New York border to place their wagers is expected to abate significantly.
Forecasts of the tax revenue to be collected from Massachusetts sports betting range from about $20 million to $60 million per year. The majority of this figure should come from online operations because figures from other states suggest that between 80% and 90% of all sports wagers are booked over the internet rather than in-person.
Massachusetts Offshore Sportsbooks a Viable Alternative
Of course, offshore bookmakers exist that compete with the regulated MA sportsbooks. By heading offshore, you might be able to benefit from a broader array of betting lines and promotional offers. To learn more about these sites, check out this guide to the best U.S.A. internet sportsbooks.
If you prefer playing poker online, then there are no state licensed options available because Massachusetts has not yet legalized this type of gaming activity. Nevertheless, you have plenty of choices for this pastime as you will discover if you read this Massachusetts online poker page.