Could Massachusetts Sports Betting Regulation Spur USA-Wide Gaming Reform?

There is currently no state that rivals Massachusetts sports betting regulation. But that may soon change.

Though online sports betting in Massachusetts only debuted this past January, the state is already setting a new standard when it comes to monitoring gambling and operators holding them accountable. In the short amount of time since wagering has been live, the Massachusetts Gaming Commission has fined multiple sportsbooks, investigated questionable advertising practices from mainstream operators and even proactively addressed the LIV and PGA Tour Merger and mapped out procedures that prohibit gambling on certain events.

This body of work has not gone unnoticed throughout industry. Of course, it isn’t making the usual amount of headlines. Most outlets these days seem more concerned with the progression (or regression) of legal sports betting revenue or states that might be next to legalize sports gambling.

State legislatures and commissions are the stakeholders who have been most interested in regulatory practices and promoting responsible gambling. Granted, not all of them fall under this umbrella. Certains regions haven’t placed as much of an emphasis on regulation and responsible gaming. For instance, funding was recently yanked in Washington D.C. for problem gambling programs. The Mayor apparently felt money generated from online sportsbooks in the United States was better spent on initiatives for substance abuse and behavioral health.

Massachusetts, however, has taken no such stance. And while chalking up their heightened vigilance to a state merely entering the sports gambling marketplace, it’s clear that their mode of thinking is catching on.

Massachusetts is Leading the Charge for Responsible Gaming with Problem Gambling Programs

As sports betting in the United States has become more common, we are starting to see a greater focus on the risks associated with it from outside observers and analysts. Specifically, some states are starting to get called out for their lack of regulation and, even more frequently, a dearth of investment in problem gambling programs. 

When you look at funding allocated for responsible gaming initiatives, Massachusetts continues to stand out relative to the entire country. As David Aa Lieb of the Associated Press wrote:

“Since the U.S. Supreme Court cleared the way for legalized sports betting five years ago, nearly three-fourths of the states have moved swiftly to allow it. State funding for problem gambling services has not kept pace, although more states —like Kentucky —are requiring at least a portion of sports wagering revenues to go toward helping addicted gamblers. ‘The funding is starting to flow, but the amount is still clearly inadequate in most states,’ said Keith Whyte, executive director of the National Council on Problem Gambling. He added: ‘Most of these amounts are token.’ Legal sports betting operators took in $220 billion during the past five years, generating $3 billion in state and local taxes. By contrast, states spent an average of 38 cents per capita on problem gambling services in the 2022 fiscal year, ranging from nothing in nine states to $10.6 million in Massachusetts, according to the Portland, Oregon-based consulting firm Problem Gambling Solutions Inc. That money, which came from all forms of gambling, went toward services such as telephone helplines, counseling and public awareness campaigns.”

Technically, some might argue the $10.6 million in taxes being allocated by Massachusetts sports betting isn’t enough. That’s not unfair. States could always be doing more to prevent and address problem gambling and promote responsible gaming. 

Still, relative to the average state, Massachusetts is doing more than their fair. It’s not just about how closely they’re monitoring licensed gambling operators. It’s also about their commitment, both financially and functionally, to public awareness campaigns. Sometimes, the money earmarked for problem gambling isn’t used or disseminated in uninventive or ineffective ways. Massachusetts, it seems, is at least trying to be better.

Will Other States Follow the Lead of Massachusetts Sports Betting Regulation?

We don’t mean to paint Massachusetts’ current policies and funding practices as perfect or a panacea. With nearly 10 states still opting out of funding responsible gaming programs, it’s clear the country has a long way to go. 

The financial commitment and regulatory practices implemented by Massachusetts sports betting officials hasn’t exactly caught on like wildfire. However, it has still caught on in some respects. 

As Lieb outlined in his piece, the debut of Kentucky sports betting has featured fairly strong regulatory policies as well as a sizable tax-revenue allocation for problem gambling. We have also seen the commission responsible for overseeing Ohio sports betting has taken a similarly hard-line approach to violations from licensed gambling operators. They also use 2 percent of their revenue from sports betting taxes to help fund problem gambling programs. That number sounds like a pittance, but it’s a lot more than other states, and it could rise as the state considers raising the Ohio sports betting tax rate.

Chances are more states will follow Massachusetts’ lead, too. It may not be from a wholesome place, mind you. The sports betting industry is under a microscope as it gets more popular and drums up more partnerships with leagues and sports media companies. States may be more concerned about the optics of how much they care about responsible gaming than actually responsible gaming itself.

To that end, we will know that real, meaningful change is taking place if and when other states start mirroring Massachusetts’ emphasis on public awareness. They have done a much better job than most of promoting the merits of problem gambling programs as well as mapping out how people can obtain access to these resources. Even in the most liberal states, this level of commitment to transparency is unheard of. But maybe, just maybe, a harsher spotlight from outside forces coupled with the precedent set by Massachusetts sports betting could incite national change. At the very least, we would expect future sports gambling launches to take the issue of responsible gaming and problem betting more seriously.

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