Massachusetts Bill Would Study Online Sports Betting, Create New Fantasy Sports Law

Written By

Updated on

Massachusetts DFS tax legalization

Massachusetts is the latest state where state lawmakers are eyeing the possible future of legal sports betting in the US.

A new bill would also extend the legality and regulation of daily fantasy sports in the state while creating a tax on operators.

What we know about the new Massachusetts bill

The bill does several things:

You can see the bill here.

More on the DFS part of the bill

The bill, should it become law, would mean changes for paid-entry fantasy sports operators in the state.

Currently, regulation of the industry is handled via the state’s attorney general’s office. AG Maura Healey led the way for DFS in the US with regulations that took effect in early 2016.

The new bill would put the Massachusetts Gaming Commission on charge of DFS, however.

Also in the bill, existing operators would have to make a one-time payment equal to the lesser of $100,000 or one and one-half percent of the gross revenue generated by the company in the previous year. Gross revenue would be taxed at a rate of 15 percent. There is no fantasy sports licensing fee or tax in the state currently.

It’s not clear what kind of chances the bill might have on the DFS front. Massachusetts has been exceedingly friendly to DFS operators, including DraftKings, which is based in Boston. The tax rate and the treatment of DFS as equivalent to other forms of online gaming are both things that likely won’t sit well with the industry. It seems likely that a more industry-friendly bill will surface.

“DraftKings is committed to working collaboratively with the legislature to adopt common sense fantasy sports legislation which protects consumers and allows our industry to continue to grow and create jobs here in Massachusetts,” James Chisholm, director of public affairs for DraftKings, told Legal Sports Report.

More on the sports betting portion

The bill also sets up a special commission to look at sports betting. That commission would only convene if the federal ban — the Professional and Amateur Sports Protection Act — is struck down by the US Supreme Court in the New Jersey sports betting case.

Going beyond just the possibility of sports betting at the state’s brick-and-mortar casinos, the bill specifically asks the prospective commission to look at online sports gambling. The commission:

‘…shall review all aspects of online sports betting including, but not limited to: economic development, consumer protection, taxation, legal and regulatory structures, burdens and benefits to the commonwealth and any other factors the commission deems relevant.”

The commission would consist of eight appointed members. It would submit its recommendations 120 days following the Supreme Court decision.