-
Casinos for you
AGA Urges Massachusetts Senate to Rethink Sports Betting Approach
By Jeff Osienya May 23, 2022 IndustryIn light of the recently passed Massachusetts Senate bill on sports betting legalization, the AGA has penned an open letter to legislators. The AGA is concerned about the implications of banning collegiate betting, high taxation, and prohibitive ad rules.On April 28, the State Senate of Massachusetts passed a bill that would finally see sports betting legalized in the state. However, there’s a caveat banning wagering on collegiate events, whether the teams are local or out of state. This and several other components of the bill have been met with some reactions from concerned parties, including the American Gaming Association (AGA), USA’s gambling industry trade body.
The AGA has since written an open letter to the General Court of the Commonwealth of Massachusetts to address the not-so-friendly gambling expansion bill. While the letter commended the lawmakers for their move to legalize sports betting, the AGA also asked the state legislator to reassess the explicit exclusion of college sports from the sports gambling equation. The letter also addressed the state’s decision to put stringent regulations on bookmakers looking to advertise their services and the ‘burdensome taxation framework’ proposed in the Senate bill.
The Bay State Will Lose a Fifth of its Revenue Without Collegiate Betting
The letter made it clear that the bill’s outright ban on collegiate sports betting was on the extreme side. Further, the AGA cited other states that have only made an exception by not allowing wagering college and university teams within their states. According to AGA, if wagers on collegiate events were not considered legal by the bill, the effects would be devastating for Massachusetts’ legal sports betting industry.
The association further cited a study that showed that Americans were eager and willing to bet on collegiate sports events to show how much potential collegiate betting has for The Bay State. If collegiate betting was prohibited in its entirety, the illegal sports gambling market that is already enjoying significant profits would continue to thrive. AGA pointed out that the state would be the ultimate loser in the long run, given that about 20% of all legal betting nationwide comes from betting on collegiate events. The letter reads in part:
Quote“Allowing legal, regulated wagering on collegiate events strengthens the integrity of games and protects bettors, competitions, and the athletes competing in them by enabling robust, transparent, and collaborative monitoring by regulators and law enforcement. Only in a legal, regulated market do regulators and law enforcement have insight into betting patterns and activity that can help them identify concerning trends, that in turn help to uncover unlawful tampering with games and athletes.”
Implications of Stringent Advertising Restrictions and High Taxation
Touching on the advertising restrictions, the letter emphasized the critical role played by sportsbook advertising. The US gaming industry trade body advised that proper advertising assists by steering punters away from harmful sports betting activities and into the regulated market that offers robust security.
And with the current bill proposing hefty tax rates for operators, the AGA cautioned Massachusetts lawmakers that if taxation isn’t practical enough, legal sportsbooks wouldn’t be a match for offshore operators. The letter stated that:
Quote“The AGA also urges the conference committee to adopt a reasonable tax rate that will allow and encourage regulated operators to effectively compete against illegal, offshore entities that do not pay any taxes or generate any economic benefit for the Commonwealth. Sports betting is a low margin business and will not be viable long term if a burdensome taxation framework is adopted,”
Finally, The Bay State lawmakers were encouraged to make haste with the approval of sports betting regulation as offshore operators still dominate the sports betting scene. From the look of things, the AGA is worried that the illegal offshore operators will maintain their foothold in MA for as long as there is little progress in ratifying any sports betting bill. For sure, AGA’s concerns cannot be taken lightly as they carry significant observations that could make or break the business entirely.
Massachusetts Legislative Journey So Far
One advantage of the Massachusetts legislature is that it has one of the longest sessions, giving lawmakers ample time to fine-tune any tabled bills. By the end of 2021, two bills, a House bill, and a Senate bill, were proposed for consideration in the 2022 session.
In February, efforts to beat the Super Bowl deadline hit a wall, but that did not stop gamblers from crossing stateliness to New York, New Hampshire, Rhode Island, and Connecticut to place their stakes. DraftKings even reported that 28% of the Super Bowl wages came from Massachusetts households, a report that vexed a few statesmen like House Rep. Rob Mariano.
At the time, Rep. Mariano expressed his frustrations to the Bloomberg, pointing out the significant loss for the Bay State due to the hesitation to pass the House bill, which he had thought to be progressive enough. With the Senate’s amendments to House bill 3993 rejected by the House, it’s now the conference committee’s decision on the next phase. Whether AGA’s proposals will be taken to account will be determined by what the committee decides.
Meanwhile, the American sports betting industry is expanding at an exponential rate. With 34 states on board, the game has now turned to how much revenue the states can win from regulated sports betting. As the numbers would have it, the past year has seen the sports betting handles in some states rise to over $1 billion and beating previous records by far. Moreover, since the PASPA was repealed in 2018, the US sports betting industry has processed a whopping $125 billion in sports bets.
Thankfully, the Massachusetts Gaming Commission has also been supportive of the process. Chair Cathy Judd-Stein even voiced the commission’s sentiments regarding thoughtfully executing the plan to legalize sports betting, should the state finally make it to that point. However, as the sports betting legislative journey progresses, it’s becoming clear that many voices would need to be heard before the final decision arrives.
You might also like