Despite this, the most recent proposal continues the trend of states wondering whether they will revise their monetary agreements with sports betting operators after the liberalization of legal betting.
The legal sports betting industry dodged a tax-related bullet on Thursday as an attempt to raise taxes on bookmakers in the Bay State was rejected despite impassioned rhetoric from a lawmaker.
Democratic Senator John Keenan has proposed that Massachusetts increase its tax on online sports earnings to 51% from the current 20%, which would have made Massachusetts one of the most expensive jurisdictions in the United States for operators.
Keenan advocated an accumulation of taxes that went beyond the monetary aspect, adding his considerations about the intellectual fitness of Commonwealth citizens and the harassment of athletes.
“The public harm issues are going to grow if we don’t act,” Keenan told the state Senate. “And we have a legal responsibility to all citizens and taxpayers of the Commonwealth of Massachusetts to use every profit we can from the industry to prevent harm from occurring. “
However, just seconds after Keenan finished his remarks, the Senate rejected his proposed amendment, one of more than a thousand proposals for the budget bill covering fiscal year 2025.
This means that, for the time being, operators offering online sports betting in Massachusetts will continue to be taxed at a rate of 20%, and not the New York rate that Keenan applies.
However, the latest proposal is in line with the trend of states looking to review their monetary agreements with sports operators after the launch of legalArray.
Ohio doubled its tax rate for sports operators to 20% last year, and lawmakers in Illinois, New Jersey and Washington, D. C. They are also contemplating increases.
In Illinois, the industry is responding. The Sports Betting Alliance, whose members are BetMGM, DraftKings, FanDuel and Fanatics, is leading a crusade to reject a proposal to increase the state sports tax from 15% to 35%.
Keenan delivered an impassioned, if ultimately unsuccessful, speech in favor of adjustments to sports betting regulations in Massachusetts.
In addition to seeking more cash from operators to help fund assistance for problematic and at-fault gambling, he has taken aim at player props and in-play betting, which he says are not allowed in the state.
“These gambling gambling were described to me by someone who had a genuine gambling problem, a genuine addiction to the point of suicide: ‘He’s the gambling crack,'” Keenan said.
The senator also highlighted the absence of most sports operators at the Massachusetts Gaming Commission’s Betting Limitation Roundtable held earlier this week.
“Basically, they made a mockery of the gambling commission,” he said. This is the industry we’re dealing with here in Massachusetts, an industry that’s earning a lot more than expected, and a lot more than we expected right now. »
Keenan’s proposal was rejected, but the increased business burden for sports betting operators in some states can also be ultimately felt through punters who end up getting worse odds. Some bookmakers would prefer to avoid or leave the maximum price. states as a whole.
Nonetheless, state lawmakers continue to raise tax rates, and possibly would do so in other jurisdictions. Deutsche Bank analyst Carlo Santarelli recently cited “the regulatory environment” as an obstacle in a study note for DraftKings.
Santarelli warned that “this was the case when the dominoes began to fall with the legalization [of online sports betting] on a state-by-state basis, and neighboring FOMO pushed for more laws and further expansion, ignoring proposals to increase the tax. or treating them as isolated cases probably turns out to be short-sighted. “