A revived proposal in Massachusetts would dramatically revamp the face of legal online sports betting, as it calls for more than doubling the tax rate, eliminating VIP programs, banning prop and in-play bets, requiring affordability checks, and myriad other changes.
Backed by Sen. John Keenan, S 302 was first introduced last February, and had at least one hearing, but never got a vote. The bill carried over to the 2026 session, and on Jan. 15 the reporting date for it was extended to March 6. Keenan last fall publicly said he was sorry that he had voted to legalize sports betting in 2022. Platforms have been live since March 2023.
The latest version of the bill would increase the 20% tax rate to 51% for online sports betting, moving Massachusetts from a state with what operators consider to be a reasonable tax rate to one of the most highly taxed in the U.S.
Illinois and New York currently have the highest tax rates for big competitive markets. In Illinois, operators are taxed on a sliding scale between 20% and 40% depending on handle, in addition to paying a per-wager tax of either $0.25 or $0.50 and a new 10.25% tax in the city of Chicago that went into effect Jan. 1. When Illinois legalized in June 2019, the tax rate was a flat 15%, but the biggest operators now pay more than 50% of adjusted gross revenue to the state and city. New York’s 51% tax rate for online platforms was set in April 2021 when the state legalized.
VIP programs could go
Another key change would be to VIP programs, which are loyalty programs in which high-level bettors are assigned a host who often earns a commission on customers’ bets. If approved, the proposal would insert the following language into the existing law: “(l) Operators, directors, officers, owners, employees, affiliates and subcontractors of the operator or sports wagering operator shall receive no compensation for any percentage of wagers or deposits placed by a customer of the operator or sports wagering operator.”
The new language would ban in-game wagers and proposition bets from the list of allowed bets, and sports betting advertisements “during a televised sporting event.” The state already bans proposition bets related to Massachusetts college players.
Bills that would put a blanket ban on in-game and prop bets have also been filed in New Jersey and New York, while more than a dozen states have some sort of ban or limitation on the kinds of prop bets allowed. In addition, the NCAA and NFL have called on states to eliminate the betting markets.
Also proposed: Affordability checks
The proposal would also:
- Ban agents and promoters from betting on a wagering platform they are connected to
- Require operators to do a financial deep dive or affordability check on bettors placing wagering $1,000 per day or $10,000 per month. Per the new language, bettors would only be able to wager at that level if the bets “do not exceed 15 per cent of the amount said person has available in bank account.”
- Increase from $1 million to $2 million an annual payment to the Sports Wagering Control Fund
- Amend research requirements to determine if sports betting is a comorbidity of “suicide attempts, suicides and self-harm among gamblers.”
- Require operators to provide the state with “customer tracking data collected for each player’s online gambling” that the state would then anonymize and use for research into gambling harm.
- Further restrict advertising language around promotional bets.
