Massachusetts Gambling Revenue Falls 17% in February

After three straight months of betting handle in excess of $600 million, the Massachusetts Gaming Commission reported that the Bay State’s streak had ended in February with wagers of $542.5 million, which equated to a 16.8% drop from January this year. 

Sportsbooks had to endure a quiet month on various fronts, including hold which came down from 11.16% in January to 9.93% in February. The report stated that retail licensees, which are taxed at 15% in the state, recorded $12.2 million in wagers, with a revenue hold of 6.17%.

Total taxable gaming revenue in February from retail sports wagering was $723,224, and the state collected $108,483. In Massachusetts, three operators – EBH, MGM, and PPC – are considered Category 1 Sports Wagering Operators, which allows these entities to operate a retail sportsbook on their property.

Based on the report released by the MGC: “To date, the Commonwealth has collected approximately $118.56 million in total taxes and assessments from the sports wagering operations of licensed operators since sports wagering began in person on January 31, 2023 and online on March 10, 2023.”

More: Massachusetts Sports Betting | Sports Betting Apps | Sportsbook Promos

MA Online Wagering Generates $10 Million in Taxes

In Massachusetts, online sportsbooks are taxed slightly higher than retail locations, at 20%. Massachusetts has eight online sportsbook operators — BetMGM, Betr, Caesars Sportsbook, DraftKings, Fanatics Betting & Gaming, FanDuel, Penn Sports Interactive, and WynnBet — which are licensed as Category 3 Sports Wagering Operators. 

These eight online operators combined for $530.2 million in February with a hold of 10.02%, which pulled the average hold up to 9.93% across both retail and online locations. Total taxable gaming revenue was $51.8 million, with the state collecting $10.4 million in tax from online operators.

Additional iGaming Tax Collection

According to the Massachusetts gaming report:

When an operator’s adjusted gross sports wagering receipts for a month is a negative number because the winnings paid to wagerers and excise taxes paid pursuant to federal law exceed the operator’s total gross receipts from sports wagering, the Sports Wagering Law allows the operator to carry over the negative amount in tax liability to returns filed for subsequent months.

Three locations in Massachusetts have casino wagering: Encore Boston Harbor, MGM Springfield, and Plainridge Park Casino. The first two of those are taxed at 25% while Plainridge is taxed at 49%. Operations from these three operators generated an additional $28.3 million in taxes for the state. Total taxable gaming revenue for February was $153.1 million with $38.8 million collected in taxes.

Massachusetts has a structured method of distributing iGaming revenue across various departments: 5% is allotted to the General Fund, 17.5% to the Workforce Investment Trust Fund, 27.5% to the Gaming Local Aid Fund, 1% to the Youth Development and AchievementnFund, and 9% to the Public Health Trust Fund.

DraftKings Dominates Massachusetts

DraftKings continued to dominate the majority share of the Massachusetts market. It was the only online operator with a double-digit revenue hold, keeping 11.66% of the $269.8 million collected in wagers in February. DraftKings alone contributed $6.1 million in taxes to the state in February. Taxable revenue for DraftKings was $30.8 million, the second straight month of revenue over $30 million for the Boston-based operator. 

FanDuel, DraftKings’ biggest competitor in the current landscape, collected $158.85 million with a hold of 9.08%. FanDuel’s revenue came in at $14 million for February with tax paid out at $2.8 million.

BetMGM came in third in Massachusetts, with wagers of $34.7 million, but had a better hold than FanDuel at 9.78%. BetMGM paid out $661,650 in tax on revenue of $3.3 million. Penn Entertainment-owned ESPN BET was not too far behind as the venture attempts to gain ground in Massachusetts. ESPN BET finished with a low hold of 7.29% on wagers of $30.6 million with $431,152 paid out in tax.

Betr and WynnBet exited the Massachusetts market in February. Both companies received approval from the MGC. Betr collected $86,865 in wagers in the first half of the month with a hold of 5.8% and paid out just $970 in taxes.

WynnBet, on the other hand, had $3.7 million in wagers but suffered massive losses, with a negative hold of 5.3%. Its total losses amounted to $196,406, impacting the state’s revenue hold significantly.

READ MORE:

• A One-Year Retrospective on Massachusetts Sports Betting
• Massachusetts Records Second-Highest Sports Betting Handle in January
• Betr and WynnBET Massachusetts Exit Dates Approved