The Massachusetts Senate appointed its conference committee members that will negotiate MA sports betting with the House.
The appointment of Sens. Eric Lesser, Patrick O’Connor and Michael Rodrigues came Thursday after the Senate insisted on changes it made to H 3993. On Tuesday, the House chose not to concur with the changes made to the bill it passed to legalize Massachusetts sportsbooks last July.
Negotiations should start soon with all conferees appointed and the end of the formal session on July 31 approaching. What exactly will be up for negotiations is being kept close to the chest by both sides, but there are three clear areas that need to be addressed:
Biggest MA conflict: college sports betting
Whether college betting is allowed or not could shut down all talks of legalization this year.
House Speaker Ron Mariano said last year a ban on college betting would probably be a dealbreaker for him. Earlier this month he said the Senate bill leaves a large portion of betting “in the hands of the black market.”
One positive is that Sen. O’Connor offered three amendments on the Senate floor to include some kind of college betting. While those amendments did not pass, they were withdrawn, not rejected.
After the Senate bill passed, Lesser noted all Massachusetts Division I colleges are against college betting. That might lead to a middle ground of only banning bets on in-state schools.
Very far apart on taxation
The House is considerably more operator-friendly when it comes to its tax structure. The Senate proposal, on the other hand, seems focused on maximizing the state’s revenue even without college betting.
The House proposal calls for a 15% tax rate on mobile sports betting revenue and a 12.5% tax on retail. The proposal also allows operators to deduction promotions.
There are no promo deductions in the Senate proposal, which taxes mobile revenue at 35% and retail at 20%. Projections from PlayMA suggest the Senate’s proposal is more profitable for the state, with an estimated $319 million in taxable revenue compared to $212 million from the House.
Can advertising restrictions work?
The Senate wants some advertising restrictions that even the bill text concedes might not be possible.
The proposal calls for a few rules not seen elsewhere in US sports betting. They include a ban on betting ads during live games and a ban on ads unless 85% of the audience is reasonably assumed to be of legal betting age.
Both of those parts mention “to the extent practicable,” which essentially couches the regulations to allow for nationally televised content. That means it would likely just be local broadcasts that have to adhere to the rules.
AGA weighs in on MA sports betting
American Gaming Association President Bill Miller offered the AGA’s takes on those three sticking points in a letter released Thursday.
Miller advocated for college betting. Excluding all college bets from a legal, regulated industry “fails to protect the integrity of games and wagers,” he said.
As for limiting ads, that will just give another advantage to the black market, Miller said. He pointed to a survey published by the AGA in 2020 that found there is still confusion amongst bettors about which websites are legal.
“Statutory restrictions or bans will only impede the ability to inform consumers about the availability of legal sportsbooks and the tenets of responsible gaming,” he said.
What about tax rate?
Miller was not as specific in his comments about taxation as the other two topics. He said the AGA urges adoption of a “reasonable tax rate” so regulated operators can effectively compete with offshores.
“Sports betting is a low margin business and will not be viable long term if a burdensome taxation framework is adopted,” Miller wrote.