House lawmakers this week will debate a bill that would legalize sports betting in Massachusetts with a proposal that one state representative said could generate $70 million in state tax revenue.
The House scheduled a formal session Thursday to discuss a sports betting bill approved by the Joint Committee on Economic Development and Emerging Technologies, a spokesperson for Speaker Ron Mariano said.
The committee’s 38-page bill, H.3974, legalizes betting on professional and collegiate sporting events, except for wagers related to an individual athlete’s performance. People aged 21 and older could also place bets within Massachusetts on motor race events, e-sports, competitive video games and any other event approved by the Massachusetts Gaming Commission. The law doesn’t cover fantasy sports.
The proposal was sent to the House Ways and Means Committee for review before Thursday’s session.
“People seem anxious to get it done. I’m glad that we got the opportunity to take it up, and hopefully we can make it happen,” said Rep. Jerald A. Parisella, a Beverly Democrat who co-chairs the economic development committee.
The committee also approved Sen. Eric Lesser’s bill, S.269, with several other accompanied proposals to the Senate. The Longmeadow Democrat’s bill does not legalize college sports betting and proposes different licensing fees.
“I’m happy to see that things progressing and conversations are ongoing, and I’m eager to see where the House lands on certain issues,” said Lesser, who co-chairs the committee with Parisella.
It is unclear whether the Senate will take up Lesser’s bill or the House bill that’s debated on Thursday.
Like other proposals, the latest House bill would offer three types of sports betting licenses: one for casinos, one for race tracks and one for mobile apps that run digital sports books.
Retail operators and mobile partners could take out a combined 11 sports betting licenses, making the state at least $70 million on application and licensing fees alone, Parisella said. Under the bill, each casino could pursue a license with up to three mobile operators. Race track operators could secure a license with one mobile operator.
The state also allows mobile operators to apply for licenses as independent entities with no cap on the number of mobile licenses. Parisella said he doesn’t foresee too many mobile operators taking advantage of the option.
“They could operate independently, but that hasn’t really been the move in states that have casinos and race tracks,” he said, adding that some states that allow dozens of mobile operators haven’t reached their limit.
Parisella estimates the state could generate $70 million in tax revenue annually, in part because of collegiate sports betting.
The state’s three casinos — MGM Springfield, Encore Boston Harbor and Plainridge Park — stand to profit off of a market that has been legalized in more than two dozen other states. The bill would create a new market for Boston-based DraftKings, FanDuel and other competitors.
But the licenses don’t come cheap. In addition to a $100,000 application fee, each applicant that’s approved would pay a $5 million initial fee for a license, paying another $5 million to renew after five years. The first-time fee drops to $4 million for operators who secured a $1 million temporary license to start taking bets while their request went through the commission.
Casinos and race parks would face a 12.5% tax on gross sports wagering receipts, while mobile operators would face a 15% tax.
Mobile operators would also face an annual fee of $1 million to cover public health programs that treat people diagnosed with compulsive gambling disorder or other forms of addiction. Casinos won’t be charged because they already pay an annual fee under the existing gaming law.
The commission would also regulate how mobile operators market their product, banning advertisements that appear “deceptive” or “false,” ads that market to people under 21 years old, unsolicited pop-up ads on a website or text message to people who have placed themselves on the state’s self-exclusion list for gambling and any form of advertising or branding deemed “unacceptable or disruptive” to someone watching a sports event.
Sports betting operators that took wagers for events at sports stadiums or other facilities will face a 1% facility fee on those receipts. It would be up to the commission to collect the facility fee and distribute it to each facility that hosted those sports events, based on how much was collected from the event they hosted.
House leaders pushed for a sports betting bill last year, folding it into a massive economic development bill. The Senate rejected efforts in July, arguing the economic development bill was not the right “vehicle” for legalization. After months of closed-door negotiations, House and Senate lawmakers approved a jobs bill that made no mention of sports betting early Jan. 6, during the final hours of the legislative session.
More than a dozen sports betting bills were filed in the 2021-22 legislative session before the economic development committee.
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