After years of discussion and pressure from both inside and outside the State House, the Massachusetts Senate voted Thursday to legalize sports wagering here, but lawmakers will have to reconcile the many differences between the Senate's bill and the one that passed the House last summer before any bets can be placed.
The Senate bill is expected to generate an estimated $35 million in annual tax revenue for the state by allowing people 21 or older to bet on professional sports at the state's casinos, slot parlor and up to six other brick-and-mortar sportsbooks, and through online or mobile platforms while physically present in Massachusetts.
The state Gaming Commission would regulate sports betting and license the operators in Massachusetts, and the Senate bill would require consumer safeguards to protect against problem gambling similar to those put in place for casinos when Massachusetts expanded gambling in 2011.
But the bill the Senate passed differs from the legislation the House approved 156-3 last summer in a handful of significant ways: its prohibition on betting on collegiate sports, its substantially higher tax rates, and its whistle-to-whistle ban on sports betting ads during live sports broadcasts.
As soon as next week, the House and the Senate could appoint a conference committee to hash out the differences with the goal of having a compromise bill that could be approved before the July 31 end of formal lawmaking for the year.
While a handful of amendments to expand the Senate's bill to allow betting on college athletics were filed, only Sen. Patrick O'Connor, R-Weymouth, spoke about his on the Senate floor. He offered three amendments: one that would have allowed betting on college sports, eSports and amateur athletic events like the Olympics; one that would have just expanded the underlying bill to allow college betting; and one that would allow betting on college sports when there is no Massachusetts team involved.
"To expand this bill and to allow (betting) on college sports, eSports and commission-approved amateur sporting events, I think, is imperative. Bettors in Massachusetts are currently betting illegally on college sports, largely in the black market or offshore websites which have no obligation to detect or report concerns regarding the integrity of the games," O'Connor said.
A few hours after asking that the three amendments be put on hold to allow for more discussion, O'Connor withdrew all three without further comment.
A total ban on collegiate betting would make Massachusetts an outlier among states that offer legal sports wagering. Oregon does not allow any collegiate betting through its commercial operator, but most states that have legalized betting allow at least some wagers on college sports.
The three New England states that have legalized sports betting limit which collegiate events bettors can wager on. Rhode Island and New Hampshire both prohibit bets placed on games played within their states and on games that involve an in-state team. Connecticut has a similar restriction, but allows "futures" bets on in-state teams, so residents can bet on the UConn Huskies to win the NCAA basketball tournament, but cannot bet on individual UConn games.
The Senate's collegiate betting prohibition also puts the branch at odds with the Massachusetts House and Speaker Ron Mariano, D-Quincy, who previously declared that leaving collegiate betting out of any bill "probably would be" a deal-breaker for him.
Though Gov. Charlie Baker's own sports betting bill proposed to exclude college sports, he reiterated Wednesday afternoon that he could accept a framework that included betting on college sports because it's already happening in neighboring states.
The Senate's betting bill would tax operators at a rate of 20% of gross sports wagering receipts from bets placed in person and at a rate of 35% of gross sports wagering receipts from bets placed via a mobile or digital platform, rates that would put Massachusetts at the high end of tax rates on sports bets.
The House bill called for a sportsbook's revenue from in-person bets to be taxed at 12.5% and revenue from mobile wagers to be taxed at 15%.
Senate Minority Leader Bruce Tarr offered an amendment Thursday to change the Senate's tax rates to match what the House adopted.
Tarr's amendment was rejected, 35 to 4, with Sen. Walter Timilty, D-Milton, joining the Senate's three Republicans voting in favor.
While $35 million in annual revenue is nothing to sneeze at, the expected state revenue haul from sports betting pales in comparison to other sources. For example, the state's two casinos and one slots parlor generated $28.6 million for the state in March alone, and the state has raked in about $304.44 million from the three facilities in the last year, more than five times the highest estimate for annual sports betting revenue for the Bay State.
The Senate bill would ban sports betting ads immediately before, during and immediately after live broadcasts of sporting events, similar to an ad ban that has been employed in the United Kingdom.
The legalization of sports betting has led to a deluge of sports betting ads around the country. For the operators, aggressive advertising is a fact of doing business in a growing field in which numerous deep-pocketed companies are competing to keep their customers and attract new ones. But for expanded gambling opponents and public health advocates, the ad surge is a warning of the consequences that could come as a result of legalizing sports betting in Massachusetts.
The Gaming Commission has already taken notice of the relentless ads and in October the agency's director of research and responsible gaming recommended that Massachusetts consider a whistle-to-whistle ban on betting ads.
O'Connor tried unsuccessfully to strip the bill of its ad ban and replace it with the same advertising and marketing restrictions as were included in the House bill, telling colleagues that "the language in the underlying bill simply goes too far."