The Senate is poised to debate legislation Thursday to legalize sports betting in Massachusetts, but the bill that emerged last Friday from a Senate committee differs in several important ways from the sports betting bill that has already cleared the House.
The long-awaited wagering bill was advanced favorably out of the Senate Ways and Means Committee late Friday afternoon, according to a Senate source. If it passes the Senate this week, lawmakers would have about three months to reconcile their differing approaches and get a bill to Gov. Charlie Baker, who has supported legalizing sports wagering for years.
"I am pleased to see the committee has come to agreement on a strong proposal and I look forward to discussing it with my colleagues next week," Senate President Karen Spilka, who for months resisted calls to debate sports betting while citing a desire to first solidify consensus among senators, said Friday.
The House passed a sports betting bill 156-3 last summer and approved sports betting legalization as part of an economic development bill the year before, but the Senate has been far less interested in tackling the issue since the U.S. Supreme Court in 2018 gave states the ability to legalize sports wagering.
More than 30 states -- including neighboring Rhode Island, New Hampshire, Connecticut and New York -- have taken action to allow betting on sports contests since May 2018.
There appear to be a number of significant differences between the bill the Senate Ways and Means Committee advanced Friday and the legislation that easily passed the House in July, most notably the Senate bill's prohibition on wagers on collegiate athletics.
Even before the House took its vote, House Speaker Ronald Mariano drew a line in the sand on Bloomberg Baystate Business and declared that leaving collegiate betting out of any bill "probably would be" a dealbreaker for him.
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"I find myself having a tough time trying to justify going through all of this to not include probably the main driver of betting in the commonwealth," Mariano said last summer.
The Senate's approach of banning betting on college sports is in line with a request from the presidents and athletic directors of the eight Massachusetts colleges and universities that have Division I sports programs.
Officials from Boston College, Boston University, Harvard University, Northeastern University, The College of the Holy Cross, Merrimack College, and the University of Massachusetts (Amherst and Lowell) in 2020 urged lawmakers to leave college betting out of any legalization bill.
Legal betting on college athletics, the presidents and athletic directors said, will lead to "unnecessary and unacceptable risks to student athletes, their campus peers, and the integrity and culture of colleges and universities in the Commonwealth."
If the House bill were to become law, the chamber's leadership estimated it could produce about $60 million in annual revenue for the state. But Mariano said the revenue estimate would drop to between $25 million and $35 million annually without college betting.
The Senate Ways and Means Committee estimated that its version of the sports betting legislation would produce $35 million in annual revenue for the state.
The use of credit cards to place bets is another issue that could emerge as a possible friction point between the House and Senate. Sen. Eric Lesser, who as chairman of the Economic Development Committee has largely led the Senate's efforts around sports betting, pointed out during a News Service forum in October that his own betting bill -- and the version that advanced with a favorable report Friday -- would explicitly prohibit the use of a credit card to make a wager, unlike the House bill.
"The idea that somebody somewhat impulsively could rack up massive credit card bills from their couch who might have an addiction issue or otherwise have a gambling problem -- that's a big concern, and it's a big concern to our caucus," Lesser said.
Like the House's sports betting bill, the Senate plan would put sports betting under the purview of the Mass. Gaming Commission, require that all bettors be at least 21 years old and physically present in Massachusetts, and implement numerous consumer safeguards to protect against problem gambling similar to those put in place for casinos when Massachusetts expanded gaming in 2011.
The Senate bill would establish a framework with two categories of licenses: one that would allow the state's gaming licensees -- Plainridge Park Casino, MGM Springfield and Encore Boston Harbor -- to take bets at their physical establishments and via one digital or mobile platform, and another that would allow up to six other operators to take both in-person and mobile bets.
All licenses would be for five years and would carry a fee of $5 million with another $5 million due for each 5-year renewal.
The Senate envisions taxing operators at a rate of 20 percent of gross sports wagering receipts from bets placed in person and at a rate of 35 percent of gross sports wagering receipts from bets placed via a mobile or digital platform. The House bill calls for a sportsbook's revenue from in-person bets to be taxed at 12.5 percent and revenue from mobile wagers to be taxed at 15 percent.
The Senate's proposed tax rates would put Massachusetts at the high end of tax rates on sports wagering revenue. Connecticut, for example, taxes sports betting revenue at 13.75 percent for retail bets and at 18 percent for online bets, while Louisiana levies a tax of 10 percent for in-person wagers and 15 percent for mobile bets and Arizona taxes in-person betting revenue at 8 percent and mobile betting revenue at 10 percent, according to the Tax Foundation.
The Senate bill would also make changes to the Race Horse Development Fund, an account fed by casino and slot gaming revenues and intended to support each side of the horse racing world: the standardbreds that run at Plainridge Park Racecourse in Plainville and the thoroughbreds that used to run at Suffolk Downs.
Starting in 2025, revenue from MGM Springfield and Encore Boston Harbor that under current law will flow into the RHDF would instead go to an education fund unless at least 20 live racing days are held in the previous calendar year at a thoroughbred track. The bill would also allow all of the RHDF money to be used to benefit the standardbred side of the industry unless at least 20 thoroughbred races are held in the preceding calendar year.
