Benefits of Legalizing Gambling for A State – Latest Updates In Massachusetts
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It’s been two weeks since online sports wagering went live in the State of Massachusetts, and the dust is just starting to settle from a pair of action-packed weeks.
It’s been business as usual since the launch, without many headlines about breaking news relating to the logistics of legalization.
We’ve seen the sporting world buzz in the build-up to launch, the fiscal equivalent of a roller coaster ratcheting its way up that first climactic hill. Now we’re coasting down the hill, a relative dead zone as customers, casino operators, and state legislators alike figure out what to make of the opening days of legal sports betting in one of the United States’ most powerful economies: in 2021 the Bay State’s gross domestic product per capita ranked No. 2, just behind New York (and, of course, the District of Columbia).
While we already have numbers on the first full month of sports gambling in the Commonwealth of Massachusetts (coming from bets placed at retail sportsbooks ahead of the online launch) we won’t know exactly how mobile betting has impacted the state economy until April 15, when the Massachusetts Gaming Commission (MGC) has said they’ll release the numbers from March.
It’s reasonable to expect a spike, as the first couple months often usher in a larger rush than usual. That’s partly because of the use of promotions like these Massachusetts Sports Betting Codes that can be used to maximize winnings for first-time bettors. It’s also because the betting industry and state regulatory agencies like to time launch dates for times of year that will already have high traffic. For Massachusetts’ retail launch, which saw $25.7 million in bets place in the first month, that was Super Bowl LVII, the biggest sporting day of the year in the United States: retail books opened in late January, just after the respective conference championship games and just in time for the league championship rush. For the mobile launch, the big day in mind was actually an entire month of action: March Madness, 63 games apiece across the Men’s and Women’s college basketball brackets that frequently bring everyone (even those who don’t watch sports) into the fold.
The betting frenzy might not stop there for the Bay State, however, as it looks to be an action packed spring in Boston. Both the Celtics and Bruins are near the top of their respective leagues and seem to be preparing for championship runs: another factor that could bring in a flurry of bets.
What we don’t know yet is exactly how much of the billion-dollar industry will hit the Massachusetts state coffers; what we do know is how it will impact the state economy, as the funds have already been earmarked aside for the 2023 Fiscal Year. Here’s a look at what Massachusetts state legislators are planning to do with the money they make from the commonwealth’s gambling taxes and other related fees.
Winning bets placed at in-person sportsbooks will be subject to a 15 percent tax rate: for mobile bets, the cut jumps to 20 percent. Much like other gambling events like state lotteries and 50/50 raffles set a cut of the final pot aside to pay forward to the community, the state wants to make sure that they can create a definitive positive impact from legalizing the pastime, as it has come with some scrutiny.
Per a February article in the Miami Herald, the “state… will reinvest the funds in public services, the workforce training fund, public health and youth development.”
The taxes levied on gambling winnings are of the biggest impact on the everyday bettor in Massachusetts, but they’re just one piece of the puzzle. If a bettor loses, the money the sportsbook holds on to is subject to the same tax rate: 15 percent in person, 20 percent online. Given the mantra that the house always wins, it’s nice to see that bettors aren’t the only ones forking over a fair share of the winnings. Just like the promo codes play a role in powerful opening weeks for the sports betting industry, Massachusetts is taking a large cut up front. Bay State lawmakers have estimated that Massachusetts will bring in somewhere between $70 million and $80 million from licensing fees that sportsbooks have to pay in order to operate. The state is jumping out to a sizable lead, and they’ll continue to get those shots in the arm moving forward because operators licenses have to be renewed every five years, bringing in successive waves of tax revenue.