Play at These Top Casinos
Wow Vegas logo
Wow Vegas

Bonus up to 1.5 million WOW Coins + 30 SC

*18+ T&Cs apply to each offer. Click "Play Now" for more information.

How Will the Massachusetts Licensing Impact the Sports Betting Market

Following news that mobile sports betting is to become regulated in Massachusetts, approved operators in 'The Codfish State' will cast their nets far and wide in the hope of reeling in eager enthusiasts, with a number of whales primed to swallow up the market.

It may, perhaps, come as a surprise to many that the state has only just become regulated, especially considering many over the last couple of years have reaped the benefits from opening this up to residents, particularly from a tax perspective.

However, it is easy to understand the caution that has been applied so far. Despite having a population recorded of just under seven million (6.98m) in 2022, the state is one of the most well-respected in the U.S. for education, boasting the highest percentage of university graduates in the states and two of the best academic institutions in the world; Harvard and MIT.

As such, technology and finance are two industries that are key to the economy, and as a result, this can only be a good thing for the newly regulated sports betting market - indeed, the state has an average household salary of just under $66,000 (2022) and a relatively low cost of living - meaning a significant level of disposable income is available.

While the end of January will paint more of what is a sparse picture at the minute in terms of those operators that are likely to be accepted, it is likely that at least most of those from FanDuel, BetR, Bally's Interactive, DraftKings, PointsBet, and Betway who have already applied for a license, will be approved. Certainly, the likes of FanDuel DraftKings, PointsBet, and Bally's Interactive, which are already well-established across the U.S., seem certainties.

Under state law, seven untethered licenses can be issued to operators, meaning that they do not need land-based casinos as a partner, though Encore Boston Harbor, MGM Springfield, and Plainridge Park Casino have just passed a review process to partner with online entities WynnBET, BetMGM, and Caesars Sportsbook respectively, while earlier this month, Barstool Sportsbook became the fourth operator to secure a license.

Regulating Mobile Sports Betting in Massachusetts

Across the U.S., multiple states have witnessed a positive impact from regulating mobile sports betting - one of the obvious benefits being a considerable financial boost to the local economy due to taxable income.

States such as Pennsylvania, Michigan, and now Illinois are already reaping the rewards that have come from this, though for some, regulating the industry was more out of necessity to create a source of income as a way of compensating for the effects of the global pandemic.

The fact that Massachusetts has waited for so long suggests that there wasn't too much of an urgency in a state that already boasts one of the best infrastructures in the U.S. - its burgeoning technology scene is one to rival that of San Francisco (California), aided by graduates from MIT.

A considerable amount of caution has been applied to the process of deciding to legislate mobile sports betting in the state; indeed, research professor Rachel Volberg has been conducting years' worth of analysis about the effects of casinos since 2013 on behalf of the Massachusetts Gaming Commission (MGC).

"We've kept a pretty careful eye on things, but only a few U.S. states have any funding in their legislation to conduct research, so we know surprisingly little about the social and economic impacts of betting in the United States as a whole," she revealed.

I think the biggest surprise for us was how little research had actually been done, particularly on the economic impacts — what does the industry look like once you legalize it, once it's operational? What kinds of jobs, what kinds of revenues, and how are those jobs translating into economic benefits? There were literally only two or three economic studies we were able to identify, so there's clearly a lot of work to be done in that area.

The general consensus appears to be that there may not be too great an impact on Massachusetts economically - especially when it comes to attracting interest from outside of the state, as illustrated by Volberg.

"When you compare the tax revenue we anticipate being generated in Massachusetts by sports betting, the optimistic scenario is $60 million a year," Volberg said, "which is not very large compared to the lottery, which in 2019 generated $1.1 billion in tax revenue, or casinos, which in 2019 generated about $168 million."

Despite this, Senator John Velis was upbeat about the proposed regulation of the market, speaking in August as he outlined: "Legalizing sports wagering in Massachusetts will allow us to finally compete with neighboring states and will bring in new revenue and immense economic benefits."

It is perhaps hard to argue with Volberg's credibility, based on her nearly decade's worth of industry research. Her viewpoint appears to take somewhat of a negative stance when looking at just how popular sports betting in the state could be.

"It's easy to lose sight of the fact that sports betting is run on very narrow margins, so the actual revenues the operator is able to generate are a very small number of what the handle numbers are," she continued.

Perhaps the biggest emphasis and even assumption from the state's perspective is that new customers will continuously be attracted by sportsbooks and perhaps a reliance on new, legal-age gamblers signing up every year.

Of course, there are also implications of various social impacts, particularly surrounding the area of potential problem gambling in the state, which appears to already be prevalent. Volberg herself has deduced from her own team's research that: "The National Council on Problem Gambling has seen a significant increase in sports-betting participation since 2018.

That suggests that an increase in sports betting has the potential to come with increased harm, which is not a surprise, but in Massachusetts because the Gaming Commission already has familiarity with implementing measures to try to minimize and mitigate harm — because they already have that experience with casinos — we're hopeful those harms can in fact be minimized.

Interestingly, there is a conflicting opinion on the subject from another highly-placed and well-respected source, who suggested that the regulation of sports betting in Massachusetts is unlikely to have too much of an effect on problem gambling.

Alisha Khoury-Boucher is a clinical supervisor for MiraVista Behavioral Health Center, and there was some crossover in her and Volberg's view, though as opposed to suggesting that it would affect current problem gamblers even more, an entirely new demographic may become affected.

"Gambling has been a concern for a long time, but we already have a casino close by, so we don't see a major change with the people we serve from legalizing sports gambling; if they wanted to do those things, they were already doing those things. It's the behavior more than the access," she explained.

In my opinion, where we may see more of a problem is with young people, college-age people, who may still be home with mom and dad and have more disposable income. We might see an increase there, but that's to be determined.

"Any time a new entertainment is starting up, it's always going to be advertised toward young people," Khoury-Boucher continued, using the vape niche as one example. "They weren't looking for middle-aged people who'd been smoking for 25 years; they were looking at mid- to late adolescents. It's kind of the same thing with sports gambling. If you're a sports fan, you're seeing advertising that looks like the old beer commercials — everyone's happy, it's exciting, and it's flashy. They're targeting young people, and that's potentially a problem."

A New Market or Only a Substitution?

One school of thought centers around whether mobile sports betting will create entirely new customers in the state or if these will change allegiances from gambling in land-based casinos to signing up for sportsbooks instead - something they may perhaps have been waiting to do for a long time.

The hope would be that those who have been participating in any illegal sports betting activities in the state are persuaded to sign up for regulated sportsbooks such as FanDuel, DraftKings, or any other of the regulated ones, present or future.

A Social and Economic Impacts of Gambling study conducted by the state of Massachusetts effectively illustrates this as one possible scenario, stating: "While it is likely that sports-book operators, including land-based and online operators, will benefit from sports-betting legalization in Massachusetts. It is difficult to predict whether sports bettors will add legal sports betting to their repertoire or simply substitute betting on sports for spending on other types of gambling."

However, Chris Kelley, who is the president and chief operating officer at MGM Springfield casino, has shed a different observation on the matter, outlining that the legislation of mobile sports betting in Massachusetts is likely to keep people from crossing state lines - something that residents of New York were doing (venturing to New Jersey), prior to passing legislation.

"Massachusetts residents are already driving across the border to Connecticut, Rhode Island, New Hampshire, and New York to place bets. Keeping the millions of tax dollars generated annually by sports wagering in the Commonwealth is a big deal," he emphasized.

Sports betting at MGM Springfield will bring more foot traffic and visitors to downtown Springfield. We are thrilled at the prospect of having more people come and enjoy our property but also to experience all of the amazing businesses nearby.

Kelley continued: "As a New England sports fan, I can tell you the MGM Springfield Sports Lounge is the best spot to watch the Patriots, the Red Sox, the Celtics, the Bruins, you name it. It's also just a great place to gather with your friends for a fun night out. As soon as we get the green light, we are ready to incorporate the BetMGM platform into our property."

Popular Sport Franchises - Potential Difference-Maker

One edge that Massachusetts does have going for it from a sports betting perspective is that it has a range of sports franchises in the state, with each one having considerable followings, even to the point of being global brands.

The Boston Red Sox MLB (Major League Baseball) is arguably one of the most iconic U.S. sports teams, with major worldwide recognition, and should attract a considerable amount of betting interest in the state.

New England Patriots, meanwhile, have seen their reputation swell over the last two decades, with a number of Super Bowl appearances, while they also have one of the biggest followings of any NFL (National Football League) side's in the U.S. and, indeed, the world.

Boston Celtics NBA (National Basketball Association) side and Boston Bruins NHL (National Hockey League) team also have a notable number of fans, so, as a result, they should attract a significant number of weekly bets.

Then, of course, there is the opportunity for major corporate alliances between the sportsbooks to become official betting partners. DraftKings may just have a considerable advantage here, thanks to its long-standing arrangement with each of the Boston-based franchises from when it was exclusively a daily fantasy sports website and, as a result, may look to leverage such relationships in order to seal new deals. The fact that DraftKings was born in Boston may also weigh further in the company's favor.

Any sportsbook operator that can agree to sponsorship arrangements is likely to become one of the most popular in the state, especially from a revenue perspective, due to increased and more widespread branding, which could even result in media rights agreements.

It will certainly be interesting to see how the market responds to the bill and even how much of an opportunity this will be for the proposed operators. No amount of philosophizing will affect the bottom line.

Leave a Comment

user avatar
My Name United States of America
Rating:
0.0
Your Comment

User Comments

comments for How Will the Massachusetts Licensing Impact the Sports Betting Market