More Details Emerge on Potential Massachusetts Sports Betting Tax Hike

Is the Massachusetts sports betting tax rate about to skyrocket? If a recent measure proposed by the Senate is successful, it most definitely will.

Senator John Keenan proposed SD 1657 to kick off. As we already covered here, the initiative would see the Massachusetts sports betting tax rate surge to north of 51 percent. Since then, though, additional details have started to emerge. 

These new tidbits are mostly consistent with the initial information. However, the specifics show that the bill, titled “An Act Addressing Economic, Health, and Social Harms Caused by Sports Betting,” calls for a special focus on the live sports betting tax rate in Massachusetts. Or rather, should we say the potential eradication of live betting?

Latest Massachusetts Sports Betting Initiative Seeks to Ban Live Wagering 

As Giovanni Shorter of Mass Live writes, in addition to increasing the Massachusetts sports betting tax rate, SD 1657 also seeks to end live wagering options:

“The measure specifically focuses on prohibiting in-play (live betting) or prop betting. Only straight wagers would be allowed, essentially limiting sportsbooks to offering only moneyline, spread, and totals. While Massachusetts and other markets have limitations when it comes to collegiate wagering, this would affect even professional sporting events. The bill also seeks to add bonuses and same-game parlays to the category of “unfair and deceptive practices.” Same-game parlays are favorites of sportsbooks due to their high “hold” percentage, which is the amount of money the sportsbooks keep off each $1 wagered.”

Senator Keenan’s aims do not stop here, either. SD 1657 includes a clause that institutes daily and monthly player limits. The current language stipulates that customers will be “unable to wager more than $1,000 in a day and $10,000 in a month without an ‘affordability assessment.’” While the full details on these “affordability assessments” remain unclear, they will entail screening bank account balances. And according to SD 1657, bettors will be unable to wager more than 15 percent of their balances.

In the event the initiative passes, online sports betting in Massachusetts will be the first mark to feature their user limitations. Other states have introduced similar ideas. None of them, though, have ever gained serious traction.

Finally, SD 1657 also wants to implement sportsbook advertisement limitations. More specifically, the initiative prohibits online sportsbooks in the United States from airing advertisements during live sporting events. 

The Massachusetts Gaming Commission has previously explored marketing restrictions for sportsbooks. In the end, they could not find a centralized way of enforcing them. Senator Keenan’s proposal presumably maps out how this might work. 

Heavy Opposition Expected from Massachusetts Gaming Operators

SD 1657 will face a ton of opposition from key stakeholders for obvious reasons. Certain officials are already dubious of the initiative. Some of that push-back is likely due to the presumed response from Massachusetts online sportsbooks.

Right now, online sports betting in the United States is so prevalent that operators may actually subject themselves to advertisement restrictions. Officials might even be willing to discuss individual daily and monthly gambling limits.

But things seem fated to fall apart when it comes to live-betting bans on top of the tax hike. The latter itself will cost sportsbooks hundreds of millions of dollars each year. Let’s journey back to our prior example from this past year. Under the current tax rate, sportsbooks paid out $129.2 million in 2024 taxes to The Bay State. If you increase the tax rate from 20 percent to 51 percent, this number climbs to $329 million—a difference of almost $200 million. And again, this is per year.

Indeed, a handful of other states have 51 percent tax rates. This includes sports betting in New York, Rhode Island and New Hampshire. But SD 1657 is getting even more ambitious with its proposed ban on live wagering. 

Live bets and online prop bets are some of the most popular wagers in the industry. Removing them significantly eats into a sportsbook’s bottom line. So not only is SD 1657 dramatically increasing the tax rate, but that hike will then be coming from a much smaller pie, since sportsbooks in Massachusetts will presumably see their gross revenue numbers fall without any live betting.

The New Massachusetts Sports Gambling Proposal Feels Like a Long Shot

If we had to guess, SD 1657 will not be passed in its current form. It may even die altogether. It is that ambitious. 

Concessions can be made if parties on both sides of the table are willing to negotiate. For instance, there is a scenario in which the Massachusetts sports betting tax rises but live bets stick and gambling limits aren’t implemented. Or maybe sportsbooks accept a slightly higher tax rate and some marketing restrictions. Perhaps there is even a middle ground in every targeted area from SD 1657.

Still, the sheer scale at which the proposal seeks to regulate and constrict online sportsbooks in the USA suggests, to us, that opposition from operators will be absolute. 

As for what that means? We don’t quite know. Massachusetts state officials have the ability to go against the whims of sportsbooks. But would doing so invite a mass exodus from the market? And if it doesn’t, would other states seek to follow Massachusetts’ lead in the years to come? 

The latter is likely a big sticking point for sportsbooks. Operators understand that whatever concessions they make in The Bay State will be used as precedent elsewhere. That’s why we should all expect the battle over SD 1657 to be exhaustive. And regardless of its fate, the final outcome may be telltale for the rest of the industry.

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