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Operators Favor Universal Start Date, Limiting Temporary Licenses In Massachusetts

Sportsbooks don't want to be left behind, but meeting shed little light on licensing conundrum

Jill R. Dorson by Jill R. Dorson
September 22, 2022
in Legislation, Regulation
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The Massachusetts Gaming Commission (MGC) may not have gotten the clarity it was hoping for Thursday, as more than 20 sports betting operators offered up thoughts on how to go live and how to handle the temporary licensing conundrum created by the legislature. Not all operators were in agreement on what launch should look like, though most do favor a universal start date.

The MGC didn’t tip its hand on when it would release a go-live timeline or when operators could be allowed to launch in Massachusetts. The meeting, for which the MGC invited operators to answer questions around the licensing and launch, was informational only.

With regard to launch, the majority of operators were clear in saying that they prefer a universal start date — particularly for digital wagering — to keep the playing field level and give all operators a fair shot at grabbing market share. Who goes first is a key issue for DraftKings and FanDuel, in particular, as it’s become clear that even a slight time advantage can make a massive difference over the long term.

FanDuel’s vice president of product and new market compliance, Cory Fox, pointed to Indiana and Pennsylvania as examples. DraftKings went live in Indiana on Oct. 3, 2019, and FanDuel followed 19 days later, while FanDuel went live in Pennsylvania on July 22, 2019, and DraftKings launched on Nov. 4, 2019. The one who went first in each state is still the market leader.

Universal launch is most fair, say operators

A universal date ensures “fairness,” Fox said. And his sentiment was echoed throughout the 2-hour, 40-minute meeting.

A simultaneous launch “fosters greater competition and a level playing field,” Hard Rock Regulatory and Compliance Vice President Danielle Boyd said. “A staggered start can devalue the licensees and mean less revenue to the state.”

💰 MASSACHUSETTS SPORTS BETTING 💰

Meeting Updates Here:

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Each Will Have 5 Minutes To Talk About Temporary Licensing And A Staggered Vs Uniform Start

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Boyd has experience with both kinds of starts, as she was part of the regulatory bodies in West Virginia (staggered start) and Tennessee (universal start) when those states launched. In response to questions from the commissioners, she added that she believes competition is stronger and operators are more diligent in preparing for a universal start date. In general, operators said that having a single start date puts the onus on them to be ready, rather than a staggered start in which operators might rush to be first.

Retail and digital together?

Among the questions that the MGC is grappling with is whether a universal start should apply to all forms of sports betting.

Licensees in Massachusetts will be divided into three categories: retail, tethered digital, and untethered digital. While most operators are at peace with having retail launch separate from — and likely ahead of — the digital launch, DraftKings’ senior director of legal and government affairs, Chris Cipolla, said his company prefers all “verticals” to go at once.

During prepared remarks, Cipolla said DraftKings would prefer that retail and mobile “are given the chance to launch on the same day.” Later, during a question-and-answer period, he added, “Other states have been able to go live with retail and mobile together, and we think that is the most equitable.”

draftkings-chris-cipolla-dias

DraftKings does not currently have market access in Massachusetts. The new law allows for mobile platforms tethered to existing casinos and racetracks, as well as seven stand-alone platforms.

For the most part, the entities that are guaranteed access — Encore-Boston Harbor, MGM-Springfield, Plainfield Park, Raynham Racetrack, and Suffolk Downs — said they were fine with a retail-first launch, and some even suggested that the digital platforms tethered to their brick-and-mortar location should get priority over stand-alone mobile. Those that will be vying for the stand-alone licenses mostly fell in the “launch-everything-at-once” camp.

It’s possible that DraftKings, which is headquartered in Boston and employs more than 1,500 people around the state, could end up with a tethered platform or a retail sportsbook. Barstool Sportsbook (Plainfield Park), BetMGM (MGM), and WynnBET (Encore) will all have retail locations and digital platforms through their physical locations, but Raynham Racetrack and Suffolk Downs have not announced partners and are entitled to one retail and one digital platform apiece.

Lawmakers created a licensing problem

The other key issue the MGC is struggling with is temporary licenses. When the legislature legalized wagering, it appears to have mistakenly created a situation in which it did not put a cap on temporary licenses, but did limit the number of stand-alone mobile licenses to seven.

MGC Chair Cathy Judd-Stein has referred to the issue as “inadvertent” on the part of the legislature, but the commission appears confused about how to proceed. It has floated the idea of issuing more than seven temporary licenses and then shuttering some platforms once the final list of approvals is complete.

Not surprisingly, operators were overwhelmingly against this course of action, pointing out that starting a platform that could be live for a year or less is costly in terms of both time and money. None came right out and said, “No, we’re not interested and won’t apply,” but one operator referred to the idea as “draconian” and said that it would cause “distrust” among customers who signed up for a site, only to have it shut down.

In other jurisdictions, the temporary or provisional license is used to speed things up. The regulator can issue these licenses more quickly and with fewer checks, allowing both the operator and regulator to finish the process after launch. The general sentiment at Thursday’s meeting seemed to be that the MGC should approve or designate who the seven licensees would be and launch them under temporary licenses rather than issue a plethora of such licenses and then close down the sites.

Betfred Vice President of Compliance Cynthia Hays also pointed out that launching “everyone in the universe” could result in “bonus abuse,” while Joe Casole, representing Carousel Group’s MaximBet and NovaBet, said issuing temporary licenses before determining which sites would get to continue operating could keep operators from fully committing to the market.

What happens when a platform shutters?

Judd-Stein and the commission tried to press operators on how they would handle a shutdown. Some pointed to the fate of futures bets as a key issue, while one pointed out that shutting down a platform could be detrimental to an operator’s ability to do business in another jurisdiction. With more than 30 legal U.S. jurisdictions, many new regulators look at an operator’s record elsewhere as part of the approval process.

cory-fox-speaks-mass-gaming

To date, few platforms have shut down permanently. TwinSpires is the most recent, as Churchill Downs Inc. has been unwinding its digital wagering and iCasino unit and pulled down sites across the country, including in Colorado, Indiana, Michigan, New Jersey, and Tennessee. The company alerted customers ahead of the shutdown and provided information about existing bets, access to funds, and other relevant topics.

TheScore Bet also shut down down its U.S. operations this year, but it continues to offer wagering in Canada. Meanwhile, the European company 888 Sports launched in several U.S. jurisdictions but pulled out in late 2021.

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Jill R. Dorson

Jill R. Dorson

Jill has covered everything from steeplechase to the NFL and then some during a more than 30-year career in sports journalism. The highlight of her career was covering Oakland Raiders during the Charles Woodson/Jon Gruden era, including the infamous “Snow Bowl” and the Raiders’ 2003 trip to Super Bowl XXXVII. Her specialty these days is covering sports betting legislation across the country. You can reach Jill at [email protected]

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