Sports betting in Massachusetts moving forward with high-powered backing

The legislation is part of a $459 million economic development package that still needs approval from the Massachusetts Senate and Gov. Charlie Baker, who has publicly voiced support for sports betting to be legalized in the state. “We consider (his support) the most critical factor,” Jefferies gaming analyst David Katz told investors in a research note on Wednesday.

“The progress in Massachusetts is supportive of our bullish view on sports betting proliferation and its primary beneficiaries,” Katz said. “As with gaming expansion in prior forms, successful passage in Massachusetts, which we expect to occur, should drive neighboring states to contemplate legalization as well.”
The measure, which was overwhelmingly approved in the Massachusetts House Tuesday, provides funding for nonprofits damaged by the coronavirus pandemic, several local projects, and language legalizing sports betting.

Under the current language, the bill offers three types of sports betting licenses: online and in-person wagering at the MGM Springfield, Penn National’s Plainridge Park, and Wynn Resorts’ Encore Boston Harbor; in-person wagering at racetracks; and digital-only platforms for operators that have offered daily fantasy in Massachusetts for at least a year and are licensed for sports wagering in two other states.

Penn National has a partnership with sports media platform Barstool Sports to create both a mobile sports betting app and Barstool-branded retail sportsbook operations. MGM is partners with UK betting giant GVC Holdings in Roar Digital, which operates the BetMGM sports wagering platform.

Katz said the last category benefits DraftKings, which is headquartered in Boston and has operated in the state since 2013, as well as FanDuel.

An application fee of $250,000 covers the first five-year period and can be renewed for another five years for $100,000. Sports betting revenues will be taxed at 15% plus an additional 1% for events that take place in the state. That fee would be divided among the owners of those facilities, including Fenway Park, home of the Red Sox.

Brendan Bussmann, a partner in the Las Vegas-based Global Market Advisors, who has been monitoring the Massachusetts debate, expressed concern that the current House bill “leaves an incredible amount of revenue on the table by appearing to focus on politicking instead of policy. The proposed structure is far from optimal.”

Bussmann said Massachusetts would be a “strong” sports betting market.