While sports betting in Massachusetts isn't yet two months old, many are already waxing poetic about its outlook. Among the most vocal optimists is House Speaker Ronald Mariano, a Democrat from the 3rd Norfolk District. In just a short amount of time, he has apparently seen and heard enough to believe the Massachusetts sports betting market is going to explode.
During a recent appearance on WCVB 5 in Boston, Mr. Mariano was asked about the outlook of sports wagering in The Bay State. His response was nothing short of gushingly hopeful:
"I think you are going to see a robust market. The Competition will begin to increase among the mobile sports betting. I think that is where society is going. Everyone uses their phone for everything now. The licensing fees alone are going to generate a reliable source of income. Not to mention the tax revenue—20 percent on the mobile sports betting. I think we have a good law which returns a lot of money to the state. There's an unlimited market out there for sports betting. Not to mention the casino. If you've been to Encore, and I'm not here to plug, but it is impressive."
It's kind of incredible that Massachusetts has already reached the point of endless optimism. It wasn't long ago that the Massachusetts sports betting launch appeared to be in disarray. The state struggled to get through the licensing process and, ultimately, couldn't settle on a universal debut date for many of the operators. Heck, the beginning of the Massachusetts sports betting launch was dampened by fines being issues for illegal college basketball gambling inside the state. Now, House Speaker Mariano paints what looks like an incredibly rosy picture.
Is it possible he's overstating the potential of the sports betting market? Maybe. Not all of Massachusetts' problems are behind them, either. They are still waiting on some sportsbooks to debut their services. It's also much too early for official financial projections. Still, there's no question Massachusetts sports betting appears to be on the right track.
Massachusetts Online Sports Betting Growth will be Critical to the Future of the Industry
House Speaker Mariano hit the nail on the head when he mentioned the importance of Massachusetts online sports betting. The vast majority of legal wagers in the United States are now placed online. In fact, multiple sources have estimated that more than 80 percent of all sports bets placed in the United States during the 2023 calendar year will be processed online. That share is expected to be even higher in states that don't have as many accessible on-site wagering options.
Massachusetts is in a unique position to capitalize on this growing trend. Whereas many other states have static tax rates across all sports betting mediums, The Codfish State assesses higher fees to online operators. That tax, as Mr. Mariano mentioned, checks in at 20 percent. That's more than double of other states, and it's exactly 5 percent more than the Massachusetts sports betting tax charged to casinos.
This should make a huge difference when looking at the state's sports betting profits. And yet, it hasn't so far. That's led some skeptics to question the effectiveness of the Massachusetts sports betting model.
Why Hasn't Massachusetts Made More Off Legal Sports Betting in 2023?
Initial revenue projections are all over the place for Massachusetts. For the most part, though, the raw numbers have been underwhelming. The state has so far made, maybe, six figures' worth of tax revenue through the first two months of legal sports betting, according to Legal Sports Report. So...what gives?
For starters, not all licensed sportsbooks are operational just yet. A handful are set to debut later in the spring. More than anything, however, Massachusetts is still working through their promotional bonus period.
The best sportsbooks offer betting promotions and bonuses to new users. With Massachusetts only just entering the legal gambling mix, licensed online sportsbooks have flooded the market with lucrative sign-up promotions. That means many bettors are still playing with house money. And that money isn't taxed by the state of Massachusetts. Sportsbooks are allowed to write it off.
This will invariably lower the total tax revenue in Massachusetts for the first few months. And that's no cause for concern. We have seen the same trend play out in other states like Ohio, New York and pretty much any other place that legalized online betting. The tax revenue will inevitably climb as sportsbooks give out fewer promotions and as gamblers use their bonuses.
How Much Revenue will Massachusetts Sports Betting Generate?
Naturally, this raises the question: Just how much sports betting revenue can Massachusetts expect to generate when business normalizes? While a concrete number is tough to pin down so soon, experts are expecting this to be a nine-figure-per-year venture.
According to CBS News, lawmakers estimate that Massachusetts sports betting "could generate about $60 million in annual tax revenue and $70 million to $80 million in initial licensing fees." What's more, those licensing fees must be paid once every five years; they will not be a one-time profit generator.
These projections are ambitious. That doesn't make them incorrect. On the contrary, the ceiling on Massachusetts sports betting revenue is probably even higher. They have one of the United States' premier professional sports markets, with flagship franchises across the NFL (New England Patriots), NBA (Boston Celtics), MLB (Boston Red Sox) and NHL (Boston Bruins).
Would we call the Massachusetts sports betting market one with "unlimited" upside, as Mr. Mariano did? Probably not. There is a limit to everything. But House Speaker Mariano is right about one thing: Despite a thorny beginning, the Massachusetts sports betting market appears primed to explode.
Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: