Massachusetts Lawmakers Considering Online Casinos to Raise Revenue

^{Online casino interests have their eyes on Springfield, Massachusetts, where legislators seem to be giving serious consideration to regulated internet gambling as a source of revenue. (Photo: Alamy Stock)}

The Massachusetts Legislature’s Joint Committee on Consumer Protection and Professional Licensure heard arguments over the legalization of online casinos on Monday, June 23, with both supporters and opponents articulating common arguments on the topic.

Lawmakers didn’t take any votes on the issue Monday, though a pair of bills have been introduced to allow for online casinos in the state.

DraftKings, FanDuel Tout Benefits of Regulated Casinos

Those bills – House Bill 332 and Senate Bill 235 – were among those discussed in the committee hearing on Monday. Massachusetts already allows for online sports betting, but has not regulated casino iGaming.

Supporters of the measures pointed out that just because lawmakers hadn’t legalized online casinos, that didn’t mean that residents in the state weren’t already playing at offshore sites.

“Online casino gaming is already happening in Massachusetts,” DraftKings Government Affairs Manager David Prestwood told the committee. “Just not in a legal, regulated, or taxed environment.”

Prestwood was joined in those arguments by James Hartman, who spoke on behalf of FanDuel. The two argued that the unregulated sites currently offering casino games to Massachusetts players offered few consumer protections and didn’t pay any taxes to the state. They also showed lawmakers that the sites were easy to find, with Hartman saying unregulated sites were bringing in “$7 billion a year.”

Hartman sought to contrast that landscape with regulated iGaming in the United States.

“On the other hand, the legal iGaming market is one of the most highly regulated industries in America,” Hartman said. “At the heart of the regulated iGaming market is a commitment to responsible gaming.”

So far, seven states – Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia – have legalized online casinos within their borders. The representatives for the two gaming firms in attendance said that these states have enjoyed increased tax revenues while also limiting the reach of unlicensed operators in their jurisdictions.

Opponents Say Revenue Comes with Gambling Harm

But not everyone at the hearing painted such a rosy picture of how legalized online casinos had impacted those states. Brianne Doura-Schawohl, who spoke on behalf of the Campaign for Fairer Gambling, said that while states have been sold on promises of revenue, the negative side effects of legalized gaming have followed close behind.

“You should consider this policy with eyes wide open,” Doura-Schawohl said. “It may result in more harm than good.”

Doura-Scawohl argued that the iGaming industry generates most of its revenue from “individuals who have an addiction,” noting that 70 percent of all iGaming revenue in neighboring Connecticut was generated by just 7 percent of residents.

The online casino proposal in Massachusetts would allow for up to 10 licenses in the state. Six of those would be reserved for the state’s three land-based casinos, each of which would be able to partner with two online gambling firms. Additionally, four other licenses would be available for operators unattached to the existing casinos. The state would collect a $5 million licensing fee for a five-year license, with operators also paying a 20 percent tax on adjusted gross revenue.