Massachusetts House passes sports betting bill; deal with Senate before fall unlikely

Massachusetts lawmakers and gambling analysts found themselves in familiar territory Thursday afternoon as the House overwhelmingly passed a bill to legalize sports betting.

A year ago, the House packed sports betting legislation into an economic development package only for the Senate to pull the measure from its version. As COVID-19 claimed hundreds of lives weekly in Massachusetts, Senate leaders said it was the wrong time and place to introduce an entirely new industry.

With the worst of the pandemic behind them, House leaders renewed their push for a sports betting bill before the August recess. The bill passed 156-3.

“House Bill 3977 has been a long time coming. Some would say it’s even been a tease to our residents,” said Rep. David Muradian Jr., a Grafton Republican.

Rep. Jerald Parisella, co-chair of the Joint Committee on Economic Development and Emerging Technologies, estimates the legalization bill would generate $60 million to $70 million annually, in addition to at least another $70 million every five years from licensing fees.

Those revenue estimates are twice as high as that Gov. Charlie Baker predicted the market would generate under his bill, but Parisella said that’s because Baker’s proposal doesn’t include collegiate sports.

Once again, though, the timeline for getting a bill to the Republican governor’s desk depends on the Senate.

Senate leaders have not said when they plan to take up a sports betting bill. Nor have they indicated whether they would take up the House bill or Sen. Eric Lesser’s sports betting proposal, which does not include college sports betting and imposes different fees.

Lesser told NESN the Senate is ready, noting most neighboring states have legal sports betting markets. He said he hopes sports betting becomes legal this calendar year.

“I think people are ready to do this if it’s done the right way, if you’ve got the protections in place,” said Lesser, a Longmeadow Democrat who heads the Joint Committee on Economic Development and Emerging Technologies.

“We’re going to make sure that any bill that moves forward has a lot of consumer protections in place and really sets a high standard for the quality of play,” he added.

In a statement, Senate President Karen Spilka said senators will review the proposals before them.

“Legalizing sports betting in Massachusetts would represent a major development, and the Senate is committed to understanding all of the issues involved in making this change before acting,” the Ashland Democrat said. “I look forward to speaking with Senators about this issue to understand any concerns or ideas they may have.”

One sticking point that could divide Democratic leaders could be collegiate sports betting, which isn’t in the Senate bill. House Speaker Ron Mariano told Bloomberg Thursday afternoon a final bill without collegiate sports would likely be a deal breaker.

“If we don’t allow college games, people are still going to go to Rhode Island and New Hampshire,” the Quincy Democrat said.

Griffin Finan, vice president of government affairs for Boston-based DraftKings, said the time for a legal sports betting in Massachusetts is now.

“We are hopeful that the legislature will move quickly to establish a regulated market that will create jobs, protect consumers, and support the many Massachusetts businesses that are losing customers to neighboring states right now,” Finan said in a statement. “We look forward to continuing to work with both branches to get a final bill over the goal line.”

What’s in the bill

The bill allows people ages 21 or older to place various types of bets at casinos, race tracks and on independent apps.A proposal to allow stadiums to secure their own sports betting licenses failed, but lawmakers approved an amendment to study the possibility.

Sports betting operators face steep startup costs in Massachusetts, starting with a $5 million licensing fee every five years and for mobile operators another $1 million annually for public health responses to compulsive gambling disorder. (Casinos and race tracks already face those fees under the state’s current gaming law.)

Brick-and-mortar licensees would face a 12.5% tax rate, while mobile operators would pay a 15% tax rate.

Massachusetts residents can make bets on professional and collegiate sports as long as they’re placing wagers in the state, though proposition bets on individual athletes won’t be allowed.

The bill also allows bets on fantasy sports and esports, a rapidly growing industry.

Activate, a tech and media consulting firm, projected in 2017 that esports would have the second highest viewership in the U.S., next to the NFL. In its 2021 outlook, Activate predicts esports revenue will grow to $5.1 billion between consumer spending and sponsorships.

The esports industry has the second highest viewership in the U.S. this year, Rep. Andy Vargas said during Thursday’s debate, citing figures from the data analysis company Statistica.

“As someone who grew up playing games like NBA2K and Call of Duty, I never imagined saying those words on the House floor,” the Haverhill Democrat said. “I know the e-sports industry will continue to grow exponentially.”

Lawmakers approved an amendment from Rep. Orlando Ramos that would add diversity, equity and inclusion requirements to a feasibility study measuring the impact of letting retailers host sports wagering kiosks.

“Allowing for casinos and existing online gaming apps to monopolize yet another multi-billion dollar industry will only further widen the income gap,” the Springfield Democrat said on the House floor Thursday, “because I’m certain there are no Black- and brown-owned casinos in Massachusetts and, to my knowledge, there are no major Black and brown-owned sports apps.”

Legislators also approved an amendment by Rep. Tackey Chan, a Quincy Democrat, to require that certain grants funded by sports betting revenue go to adult literacy and English language learning programs to increase access to the state’s workforce. Chan’s amendment also allows grants for skills training and adult literacy to benefit immigrants, refugees and people of color, among other groups.

An amendment from Rep. Daniel Hunt clarified that no mobile operator with a Category 3 license would have to partner with a casino or race track to get the green light to take bets in Massachusetts.

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