Will MA Sports Betting Market Allow Revenue Deductions For Promos?

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MA sports betting

State regulators will determine whether promotional deductions on online MA sports betting will be allowed after the Massachusetts Gaming Commission was reintroduced to the matter Thursday.

The discussion arose from the communications division following inquiries from media members, one policymaker, and a university professor. 

No promo deductions are currently allowed on Massachusetts sports betting wagers, pending a final decision.

Next steps for MGC on promo plan

The MGC staff plans to seek written comment from a number of parties on the matter before determining how to proceed: 

It is also possible that MGC accepts public comment from interested stakeholders before discussing the matter further at a public meeting. Commissioner Bradford Hill had suggested a roundtable hearing on the matter, though it does not appear in play for now.

Why MA sports betting matter remains

In January, the MGC voted it has the authority to determine whether promo deductions are permissible. However, it did not rule on the actual matter itself. 

At the time, MGM Springfield, Fanatics and DraftKings sent letters to MA regulators urging them to allow promo deductions. 

DraftKings Sportsbook wrote in its letter:

Rationale: DraftKings respectfully requests that the Commission explicitly exclude promotional gaming credits1 from Adjusted Gross Sports Wagering Receipts. Including promotional gaming credits would result in the Commonwealth levying taxes on totals that do not reflect actual revenue earned by a sports wagering operator. Excluding promotional credits is the fairest way to tax sports wagering operators, and is the policy chosen by a significant number of online sports wagering states. 

MA could look to OH for comparison

The Bay State has a 20% tax rate for online sports betting, and a 15% tax rate for in-person sports betting. 

Massachusetts launched legal online sports betting March 10. March revenue and handle data will be released April 15

Online operators in Ohio, which launched on Jan. 1, gave out a combined $320 million in promo credits during their first month in business. That was higher than their combined total of $206 million in taxable revenue for January. 

Operators cannot deduct promos in Ohio.