One of a number of states facing a revenue black hole due to the COVID pandemic, Massachusetts is considering taking the fast track to regulated sports betting. The move will see much-needed money pumped back into government coffers that were badly affected by the health crisis.
Late last week, the state legislature announced that plans to allow sports wagering were being considered as part of a $372 m economic development bill. The money will be used among many other programmes to promote job training, schooling, tourism, and child care.
Crucially, the specifics of the sports betting plans include mobile betting regulations, as well as bricks and mortar wagering. Betting on college sports was also introduced into the law, but does not provide for prop-wagers in the game. The tax rate has been set at 15 percent with an additional 1 percent levy payable to sports stadiums to fund integrity and health.
The entry cost for operators has been set at $250,000 for an initial five-year licence application, valid every five years for $100,000. Casinos, racetracks and DFS companies allowed to run sportsbooks in Massachusetts should be able to.
Sport betting income will be deemed increasingly desirable as Massachusetts faces disproportionately higher rates of unemployment and declining tax revenues in the face of the COVID outbreak.
The state will look at a $6bn revenue deficit, the economic impact of which is likely to be felt for many years, according to the Massachusetts Taxpayers’ Federation.
State Department of Revenue collections have already dropped by $2.25bn, largely due to a 54 percent shortfall in April versus the same period in 2019. The state earned tax revenues worth $1.7bn in May, 13 percent less than it did year-on-year and 15 percent behind state estimates.