The Massachusetts Gaming Commission issued temporary sports wagering operator licenses to six standalone digital wagering applicants on Thursday, paving the way for the launch of mobile sports betting in March ahead of the NCAA Tournament.
The MGC approved temporary licenses for Bally Bet, Betr, Betway, DraftKings, FanDuel, and PointsBet, which all gave detailed presentations to the commission this month. The commissioners’ votes were unanimous except in the case of Betr, a sports betting newcomer that touts its innovative microbetting platform. MGC Commissioner Eileen O’Brien voted against Betr while commenting that co-founder Jake Paul’s celebrity status could increase problem gambling among younger sports bettors.
The MGC announced last month that it intends to go live with mobile sports wagering in March. It has targeted Jan. 31 for the launch of retail sports betting, giving brick-and-mortar sportsbooks a head start over their digital counterparts.
Prior to Thursday’s meeting, five other online sportsbooks — Barstool Sportsbook (Plainridge Park), BetMGM (MGM Springfield), Caesars Sportsbook (Encore Boston Harbor), Fanatics (Plainridge Park), and WynnBET (Encore Boston Harbor) – received initial approval from the MGC. Those five sportsbook operators are tethered to existing wagering facilities in Massachusetts.
Sports betting in Massachusetts on track to start in two weeks https://t.co/ItsdvQJF71
— Boston 25 News (@boston25) January 18, 2023
The MGC weighed a number of factors in the approval process, most notably the economic benefits the applicants could bring to the state if granted a temporary license. Other factors included each applicant’s proposed measures to promote responsible gambling, their willingness to foster ethnic and gender diversity, the technology to be used in operations, and the suitability of each applicant.
“I see this collective pool each bringing to the table enough uniqueness to bring innovation, to keep things fresh, and to offer new products that players are going to want,” MGC Chair Cathy Judd-Stein said.
Checking the boxes
During a lengthy review process, the MGC analyzed whether the untethered digital wagering operators will bring innovation and player choice to the market. The commission received input from RSM US LLP, a leading auditing network that provided a high-level overview of the applicants’ projected revenue in Massachusetts, selected operating metrics, and the liquidity positions of supporting parent companies. Ultimately, the MGC judged whether the applicants will bring substantial benefits to the market that outweigh any potential deficiencies.
While RSM cited third-party data from several Wall Street analysts, Deutsche Bank projects that the state will generate gross gaming revenue of $306.6 million from sports betting in 2023. By 2027, Deutsche Bank estimates the figure to rise to $408.8 million, while Truist has a more bullish projection. Truist anticipates that by then, the market will produce annual GGR of up to $639 million, an assumption that supports a relatively high compound annual growth rate each year.
MGC Commissioner Jordan Maynard commented that he reviewed reports from the MGC’s Investigations and Enforcement Bureau thoroughly before Thursday’s vote. When it came to findings of preliminary suitability, Maynard indicated that he did not see anything glaring from the six applicants that should result in denial of a temporary license.
Maynard also lauded Betr for its interest in partnering with the Massachusetts Lottery on potential promotions. In its application to the MGC, Betr indicated that it is contemplating a cross-promotion where it would reward customers with free bets through its sports betting app when they show proof of purchase of a Massachusetts Lottery ticket.
Betr co-founder Paul, a celebrity boxer and YouTube influencer, defended his reputation during a contentious MGC meeting last week. Betr has pledged that it will not offer wagering on events in which Paul competes. Several MGC commissioners are in favor of a broader standard that would prohibit Betr from offering lines on events that Paul promotes. Each applicant is still to undergo a strict background check before the MGC grants an operator full licensure.
The MGC also spent a considerable amount of time Thursday discussing Betway’s launch in the Bay State. Last week, Betway made clear that it will not be ready to go live in Massachusetts by the universal launch date. The commission contemplated attaching a condition that may require the operator to launch within a certain time frame. MGC General Counsel Todd Grossman emphasized that a temporary license is not a mandate to begin operations, likening the situation to a driver who receives a license but leaves his car in a garage.
In Massachusetts, Betway gets praise from state regulator, but its acquisition by Super Group will slow the approval process.https://t.co/sJJOm0a8yB
— Sports Handle (@sports_handle) January 13, 2023
When it comes to transferability issues, Grossman explained that any licensee will be subject to an extensive suitability review if Betway attempts to hand over the license. One concern relates to the residual effects of how the market will respond if a sportsbook operator is forced to cease operations. The issue has become more acute over the last 12 months after mid-sized operators such as Fubo Sportsbook and MaximBet shuttered their respective sports betting divisions in other states.
With risk factors for compulsive gambling an issue, MGC Commissioner Bradford Hill underscored the importance of responsible gambling throughout the process and stated that all six applicants articulated robust plans tied to it. The MGC has heard from researchers with the University of Massachusetts at Amherst School of Public Health and Health Sciences on the impact of sports betting on problem gaming. The research team associated with the Social and Economic Impacts of Gambling in Massachusetts (SEIGMA) project is widely regarded as one of the leading problem gambling research groups nationwide.
College carve-out
When Massachusetts legislators passed the law legalizing sports betting last summer, they included a carve-out prohibiting most wagers on in-state college teams. There is an exception for tournaments involving four teams or more.
The exception covers wagers on college football’s national championship playoffs and March Madness in basketball, which typically attracts more betting than any other sporting event.
