Massachusetts Decides Against Tax Hike for Sports Betting Operators

A last-minute proposal to raise the sports betting operators tax was officially rejected in the Bay State this week.

Massachusetts Senator John F. Keenan (D) proposed raising the sports betting operator tax rate from 20% to 51% in the 2025 budget proposal. The 155% hike would have tied the state with New York for the highest tax rate in the country. The goal was to increase revenue for the five funds that tax revenue from the industry is distributed into, as well as get Massachusetts sportsbooks to “pay their fair share”.

It took less than two days for the proposal to be widely rejected by the rest of the Massachusetts Senate. While the idea of an increase appeals to some, many believe a major hike like this would have negative effect on their legal sports betting market, leading to less revenue.

There has been calls across the country to raise taxes on online sports betting operators. The industry’s mind-boggling revenue have been even better than expected in most states, leading to calls to adjust the tax rate accordingly.

With the proposal being left out of the 2025 budget, the state’s tax rate will remain at 20% for at least one more fiscal year.

The timing of the tax hike proposal did raise some eyebrows across the sports betting industry. It came just days after the state’s online operators no showed a roundtable discussion with the Massachusetts Gaming Commission (MGC).

The regulator had invited operators to come to publicly discuss their practices around limiting customers. The MGC wanted to clear up the topic after allegations that the operators are limiting casual bettors who are on a hot streak. The practice is meant to stop sharps and illegal betting on betting apps, not to cut off the average bettor who has been winning.

No operators showed up for the roundtable, essentially wasting the time of the MGC and public that had attended the discussion. They have released statements saying they opted out of the discussion to avoid sharing trade secrets in public. While some commissioners understood the reasoning, they insist the topic must be open to the public.

“We are required by law to do our job in open forum in Massachusetts,” Commissioner Jordan Maynard shared at the beginning of the discussion. “At times, it can be uncomfortable to have these conversations in public, and we understand it. My fellow commissioners and I face this situation at almost every meeting. Without the benefit of being able to collaborate before joining a meeting, it’s tough. But with that said, transparency is key to the integrity of the industry in Massachusetts. This commission will never compromise transparency or integrity,” he said.

Massachusetts is not the only state where a call for a higher tax rate is being considered. There is currently a budget proposal being considered that would more than double the rax rate for Illinois sportsbooks, though it would still be far below the 51% proposed in the Bay State. Many other states have begun to discuss rate hikes, with some passing them over the last year.

Betting site operators are strongly opposing massive tax hikes. They insist that they are paying their fair share, and an increase would force them to compensate for revenue loss in other ways. That includes watering down their odds and offering fewer bonuses for new and existing players.