Massachusetts gaming regulators decided Thursday to take a closer look at promotional play deductions for sports betting operators.
But a decision, if any, by the Massachusetts Gaming Commission on whether to allow operators to write off promotions when paying tax to the commonwealth won’t come anytime soon.
MGC Chief Finance Officer Derek Lennon suggested to the commission at its meeting Thursday that regulators wait to act until after there is more revenue data from the Massachusetts sports betting market, now less than two months old, with online sports betting launching just two weeks ago. He also suggested that commissioners look at promotional regulations and data from other states in the meantime. Additionally, the commission will put the issue to public comment.
“All the operators are going for the grab as far as offering a lot of promotions, so total handle may not be reflective of what it would be like in steady state,” Lennon said today.
According to estimates from PlayMA, promotional play credits could cost Massachusetts $31 million annually for the commonwealth by reducing taxable revenue by $150 million each year.
Issue Put to Public Comment
On Thursday, the commission decided to post an opportunity for public comment on the issue of promotional play on the agency’s website. Staff will also notify top offices in the executive branch and licensed sports betting operators of the opportunity for comment.
Operators are jockeying for new customers as they try to maximize market share in the nascent Massachusetts market. Mobile sports betting through six operators launched on March 10. Retail sportsbooks at the state’s three casinos launched on Jan. 31.
February revenue reports released by the MGC on March 15 show retail sports betting at the commonwealth’s three casinos generated a little over $2 million in its first month. That generated $311,395 in total taxes and assessments based on a tax rate of 15 percent.
Mobile sports betting revenue figures and new retail data is expected to be released in mid-April.
Massachusetts Gaming Regulators Divided on Promo Play Deductions
The commission last looked at promotional write-offs in January, voting 3-2 that it may have the authority to allow deductions at some point.
According to MGC Chair Cathy Judd-Stein, the vote indicated that three commissioners felt the state’s 2022 sports betting law “was sufficiently ambiguous to allow interpretation.” The commission has not taken up the issue again until Thursday.
Commissioner Eileen O’Brien and Judd-Stein both voted in the minority on the issue back in January. According to Judd-Stein, that minority vote meant that “the law is clear and does not permit promo play to be deducted.”
O’Brien clarified her position Thursday that promotions are not deductible under the law, but said she welcomes public comment.
“I don’t know that there’s even going to be call for a vote when we get to the end of that, we’ll see. But if we want to mark it up to get a more formal commentary on this, I don’t think it’s going to be anything but helpful for this process,” said O’Brien.
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