Is the Legalization of Massachusetts Sports Betting Already a Bust?

Even though Massachusetts sports betting has yet to officially be rolled, there is a mounting faction of people within the state who think it is either already a bust or on track to become. But could this really be true?

Declaring legals sports betting in Massachusetts a failure before it technically is quite the take. Governor Charlie Baker only signed the latest initiative into law a little while ago, and Massachusetts sports betting remains without a timeline for arrival after its legalization. How on earth could it already be tacking toward disaster?

Well, according to Forbes, the answer lies in the absence of a timeline—as well as the prospective revenue projections.

Massachusetts Sports Betting Timeline Delay has People Up in Arms

Not surprisingly, a lot of the negative chatter surrounding Massachusetts sports betting has to do with the lack of information on its future. While it's guaranteed to take effect at some point, the Massachusetts Gaming Commission has yet to even hint at when that might be.

The closest thing to concrete information we have is that the MGC began holding a series of meetings in mid-August to try expediting the process. These conversations were supposed to address every single aspect of the rollout process, including licensing applications and approvals, operational considerations, best practices for responsible gaming, advertising, marketing guidelines and much more. More than two weeks after these meetings were convened, however, the MGC has yet to shed any additional light on their implementation timeline.

This continued silence has many government officials, not to mention the general public, uneasy about what will happen from here. If Massachusetts sports betting is getting held up before the state even begins reviewing applications for gaming licenses, why should there be any confidence in their ability to effectively execute every part of the legalization process without issue?

To be fair, aspects of the negative responses could be more about unrealistic expectations. Many had hoped Massachusetts sports betting would be live in time to bet on the start of the 2022 NFL season. And though that timeline was always overly ambitious, the state's inability to push forward with the legalization process suggests residents will be lucky to bet on the start of the 2023 NFL season.

Given all of this, Massachusetts could not reasonably expect positive feedback on their handling of the situation. As Forbes noted, the early stages have been a borderline disaster. And more troublingly, all of this effort is being expended on an endeavor that select officials and industry experts don't believe will be all that profitable.

Massachusetts Sports Betting Revenue Could be a Major Disappointment

Most states that have legalized sports eventually find their initial revenue projections get blown out of the water—in a good way. Believe it or not, this isn't really a huge shock. Initial forecasts tend to only account for the state's population, sports market size and the amount of known money wagered on sports outside the state. There is no way to accurately factor in how many people have always placed bets online. After all, while Massachusetts resisted giving the okay to sports betting for years, residents were still able to create accounts at certain bookies, including at reputable sites like the ones found in our reviews of the top online sportsbooks.

Of course, revenue projections for states entering the legal sports betting fold have gotten easier and more accurate. That's the benefit of joining the party late; you are able to analyze data from states with similar populations and sports market sizes that have already gone through the process.

This is where things get dicey for Massachusetts sports betting. Forbes' Will Yakowicz recently spoke with Colin Mansfield, an analyst from Fitch Ratings, and the latter painted a somewhat bleak picture of Massachusetts' sports betting market.

"We view it positively, but that's on the margin," Mansfield said of legalizing Massachusetts sports betting. "The average American spends $50 a year on sports betting, so if you extrapolate that to Massachusetts' population of 6.8 million people, the state has a potential market size of about $350 million in gross gaming revenues. [That's] not anything that's going to move the needle for any of the gaming companies."

Yikes.

Or maybe not.

Massachusetts Has Not Failed...Yet

We're not going to mince words: We vehemently disagree with Mansfield's assessment of Massachusetts sports betting.

For starters, using the spending of an average American sports bettor doesn't fly in Massachusetts. They have one of the most robust sports markets in the Northeast, with pro franchises across the NFL (New England Patriots), NBA (Boston Celtics), MLB (Boston Red Sox) and NHL (Boston Bruins) that essentially qualify as a genre of religion among their sports fans. Any market with these teams will offer serious appeal to sports betting companies, because their clientele is likely to spend more than the national average.

Furthermore, Massachusetts is going to be taxing online sportsbooks at a higher rate than other places. In states like Arizona and Colorado, tax rates sit comfortably under 10 percent. Massachusetts plans to meet, if not exceed, that 10 percent tax rate threshold. That's more money in their pocket right there.

And on top of all that, Arizona has a gross gaming revenue eclipsing $360 million since rolling out legal sports betting in 2021. Massachusetts sports betting will be offered to a similarly sized population, with a more engaged and just generally larger sports fanbase. 

No, we cannot speak for how Massachusetts has handled the actual rollout of sports betting. The absence of a timeline is definitely unnerving. Financially speaking, though, the state will be fine. Putting a $350 million cap on their gross gaming revenue is unfair and not anywhere near reflective of their actual potential.

Take a look at this list of the top online sportsbooks so you can decide which one works for all of your sports betting needs: