Last year, as the debate over legalizing sports betting played out on Beacon Hill, it was tempting to ask why that particular topic was commanding so much attention while other priorities receded into the background or failed to gain traction at all.
This week, new data from the Massachusetts Gaming Commission gave us the answer. Interest in sports betting is intense, especially when you can do it from your phone — which makes it a huge moneymaker for the parties involved. In March, the first month in which online sports betting was legal in the state, license holders received and settled about $570 million in wagers. The vast majority of those — nearly $550 million — were placed online, compared to just $20 million wagered in person.
Before legal sports betting became a reality, proponents pointed out that most of New England had already embraced the industry. They also noted that taxes on sports betting would bolster Massachusetts' coffers — and sure enough, it brought in more than $9 million in taxes last month. However, that public benefit came with a much bigger private cost. The state's online sports betting license holders made just over $48 million in March — money that used to belong to Massachusetts residents.
Is that tradeoff worth it? The answer depends, in part, on whether you see sports betting participants as rational actors having a bit of fun, or as easy marks being manipulated by a fundamentally predatory industry.
It also depends on what happens next. Online sports betting's fast start reflects, at least in part, aggressive promotions in which free "bonus bets" were awarded to players following a low-stakes initial wager — on DraftKings, for a time, a $5 wager automatically gave bettors another $200 to gamble with. (A gaming commission spokesperson said those free bets are included in the March tally, but couldn't say what their total value was.) It may also have been driven the sheer novelty of the industry and the NCAA basketball tournaments’ March Madness, which has prompted low-stakes wagering by coworkers and friends for decades.
If March was an anomaly, the outflow of cash from Massachusetts residents to sports betting operators will likely diminish as time goes on. (Before sports betting became legal, estimated tax revenues tended to top out at $60 million annually.) Then again, those big March numbers could be an early sign that, for whatever reason, the residents of Massachusetts are more willing to bet big, and lose big, on sports than anyone anticipated.
If so, could state lawmakers be forced to rein in the same industry they just chose to create? Given House Speaker Ron Mariano's oft-stated support for sports betting, it's hard to imagine the Legislature doing anything that would significantly limit the industry's ability to operate and make a (taxable) profit.
Even so, ramped-up scrutiny could be coming in the next few months. Attorney General Andrea Campbell identifies herself as a supporter of responsible sports betting. Still, even before the March returns were in, she successfully pushed the gaming commission to tighten restrictions on the industry’s advertising practices. Among other things, it now requires that operators avoid advertising to individuals under 21 years old, and also that they provide easy ways to opt out of marketing efforts. As more information is collected, including who’s placing bets and whether reports of problem gambling are proliferating, Campbell and other watchdogs may find new reasons to push for heightened regulation.
In the meantime, all the money being spent on online sports betting will likely ramp up pressure on state lawmakers to let the Massachusetts Lottery sell its products online, too. That shift, which is backed by state Treasurer Deborah Goldberg and House lawmakers, has a new supporter in Gov. Maura Healey, who recently told GBH News’ Boston Public Radio that Massachusetts has “a lottery system that right now isn’t able to compete. ... The [state] lottery, that’s money coming back to cities and towns.”
Of course, before that lottery money went back to cities and towns, it belonged to Massachusetts residents who chose to gamble it away. But right now, any discomfort with the state facilitating that choice seems to have faded.
