Managing Editor
The Massachusetts online casino proposal is finally getting a little bit of attention, three months after its introduction. However, the issue doesn’t appear to have made it onto the public’s radar yet, as state residents seemed more interested in talking about horse racing than iGaming at a joint committee hearing today.
The Massachusetts Internet Gaming Act consists of identical bills in the House and Senate, introduced simultaneously on February 27. They were both referred to the Joint Committee on Consumer Protection and Professional Licensure. However, they had to wait until now to receive a hearing.
Fortunately, the legislation isn’t under any time pressure yet. The Massachusetts legislative session runs until November 19.
Today’s hearing allowed residents and stakeholders the opportunity to comment on over two dozen bills. Many of those went ignored, however, with the iGaming proposal and a pair of bills pertaining to horse racing receiving the bulk of the attention.
There was a stark difference in the source of the commentary on each front. The statements for and against the online casino proposal were predictable, coming from the same organizations that have battled for control of the narrative in other states. Conversely, the topic of horse racing produced much more grassroots interest. A half dozen or so locals turned out to speak on that issue on their own behalf.
Massachusetts’ proposal for online casinos would grant each of the state’s three retail casinos the right to partner with two brands. It would also allow four “untethered” licenses for online companies to operate independently, for a total of 10 online licenses. The proposed tax rate is 20%.
The Usual Refrain: Jobs, Taxes, and the Offshore Bogeyman
After a flurry of successful legislative efforts from 2018 to 2020, US iGaming expansion has mostly stagnated. Rhode Island pushed through a bill in 2023, and Maine has come close this year. However, the last big, multi-license market to have opened was Michigan in 2021.
All the failed efforts since then have had the same groups pushing for them, using similar arguments each time. Today’s hearing offered no surprises, with testimony from:
- DraftKings and FanDuel representatives
- John Pappas for the iGaming Development and Economic Association (iDEA)
- Zach Khan for the Sports Betting Alliance
Each of the four offered similar arguments, the crux of which Pappas summarized succinctly:
iGaming is already happening. It’s just not happening legally.
They emphasized the responsible gambling controls and Know Your Customer protocols that are the hallmark of regulated gambling products. They quoted numbers from studies purporting to show billions of dollars in illegal wagering taking place in Massachusetts, and hundreds of billions nationally.
The representative for DraftKings discussed the jobs iGaming creates, while Khan stated that the launch of iGaming adds 2% to the growth rate of land-based casinos. Revenue for the state was another common theme, as offshore casinos pay no taxes.
Perhaps the only Massachusetts-specific comment came from Pappas, who suggested the bill should allow for more licenses. Michigan allows 15 brands, and Pappas said he thinks Massachusetts could support a similar number.
Somewhat surprisingly, there was no mention of sweepstakes casinos. These legal-but-unregulated alternatives fill a similar niche as the offshore industry, and have likewise become a target for lawmakers at the behest of the regulated industry. Massachusetts was not among the many states to have attempted a crackdown against them this year.
Voices Against: Unions and Advocacy Groups
The arguments against iGaming were likewise predictable in their content and origin.
Jamie McNeil for the Local 26 Hospitality Workers’ Union made it clear that retail casino workers will resist online casinos here as they have elsewhere. Across the country, unions have not been swayed by promises of live dealer studio jobs or collaboration between the iGaming and retail sectors. McNeil said the union had calculated that iGaming would cause the loss of 862 Massachusetts casino jobs and an even greater number in supporting industries, based on outcomes in New Jersey, Michigan, and other states with online casinos.
Mark Stewart likewise spoke against the proposal on behalf of the recently formed National Association Against iGaming. Brianne Doura-Schawohl put in an appearance for the Campaign for Fairer Gambling, which advocates for federal rather than state regulation.
These voices against the proposal pushed back on the notion that iGaming is additive to retail gaming, citing other studies that have found evidence for cannibalization. They spoke on the harms of gambling addiction and the heightened risk of online products. Stewart pointed to the rise in problem gambling calls in regulated states and regulatory penalties that have been issued to operators for compliance failures.
Notably absent from the hearing were the state’s retail casinos. However, we already know where they’re likely to land. MGM and PENN (Plainridge Park) would welcome a new market for their online products. However, Wynn will oppose the bill as it has already abandoned its struggling WynnBet brand.
Locals Seek Greater Power to Block Horse Racing Expansion
The trifecta of unions, problem gambling advocacy groups, and retail interests without an online presence has proven highly effective at stalling iGaming legislation elsewhere. Since all those elements are present in Massachusetts and the pro-iGaming camp hasn’t advanced any new ideas, you’d expect a similar result here.
If there’s one thing going for the Massachusetts online casino effort, though, it’s that grassroots resistance hasn’t manifested yet. None of the individual citizens who offered verbal testimony at the hearing had opinions about online gambling one way or another. Concern on that front seems to be focused on the issue of racetrack expansion.
Since the Suffolk Downs racetrack closed in 2019, the Massachusetts racing industry has been looking for new places to build facilities. Community groups have pushed back. House Bill 356 would make such resistance more effective by requiring local approval for tracks or simulcast facilities and preventing would-be developers from pushing through a vote before conducting the requisite studies and obtaining approval from the municipal planning board.
Several locals turned out to speak in favor of that bill and another, Senate Bill 280, which increases protections for the health and well-being of racing horses.
