Is The Massachusetts Sports Betting Tax About To Surge?

A new Massachusetts sports betting bill is seeking to more than double the state’s current tax rate.

Senator John Keenan is the primary sponsor of the measure. He introduced it at the start of 2025 legislative sessions.

Entitled “An Act Addressing Economic, Health and Social Harms Caused by Sports Betting,’ the proposal also maps out the elimination of play-in bets and affordability checks, among other changes. As many are noting, the measure in many ways bears resemblance to the SAFE Bet Act. Proposed last fall, this is a federal bill that would implement many of the same changes to sports betting in Massachusetts, as well as other states.

At this stage, it remains to be seen how much support Mr. Keenan’s measure has throughout the House and Senate. But the tax rate, specifically, remains a hot-button issue. So let’s break it all down. 

Full Details on Potential Increase to Massachusetts Sports Betting Tax

As of now, the current Massachusetts sports betting tax rate sits at 15 percent for brick and mortar operations. However, it is slightly higher for Massachusetts online sports betting sites. Mobile wagering apps are taxed at a 15 percent clip.

Senator Keenan’s proposal noticeably increases these current rates. It also calls for dramatic upticks in sportsbook contributions to problem gambling funds. As Jill R Dorson of iGaming Business explains:

“For the second time in two sessions, Keenan is proposing bumping the digital betting tax rate from 20 percent to 51 percent. His attempt in 2024 would have been part of the state budget bill, but was rejected. Among other changes, Keenan is proposing to double the amount that operators are required to contribute to problem and responsible gambling initiatives from $1 million to $2 million. This is in addition to being taxed.”

It seems that Keenan’s proposal would not impact the 15 percent tax rate for physical sportsbooks in Massachusetts. That is somewhat surprising, though fairly easy to understand. On-site operators create jobs for the markets in which they operate. Most online sportsbooks in the United States do not reside in a singular market. Granted, in the case of DraftKings, they are headquartered in The Bay State. But they are not the only online sportsbooks in Massachusetts.

Tax Increase Could Be Worth Hundreds of Millions of Dollars Per Year to Massachusetts

If Keenan’s bill is approved, it will significantly expand the Massachusetts sports betting revenue stream. After all, online sports betting in the United States is not merely on the rise. It is basically the industry standard.

Take the Massachusetts sports betting market, as an example. According to data from the Massachusetts Gaming Commission, around 98.5 percent of all bets placed in The Bay State during the final month of 2024 were processed through an online operator. While reported revenue from Massachusetts online gaming sites will vary, this also means they make up a majority of the profit margins.

Consider the most recent calendar year as proof. In 2024, online sports betting in Massachusetts reported $646.1 million in total revenue. Under the current tax rate, this results in $129.2 million going to The Bay State. If that same amount were taxed at a 51 percent clip, though, this number skyrockets to over $329 million. That’s a difference of nearly $200 million…in one calendar year.

Naturally, then, you can see why Keenan is pushing for such a stark upswing. The question is: Will his measure wind up being successful? Or will it be rejected like his previous proposal?

Expect Rampant Opposition from Massachusetts Online Sportsbooks

Each of the online sports betting apps operating in Massachusetts will strongly oppose this measure. Between the increased tax rate and additional contributions to problem gambling funds, this proposal will cost them hundreds of millions of dollars in additional spending each year.

That is a big part of why Keenan’s last piece of legislation flopped. Even fringe supporters consider it too aggressive. Then again, others believe that The Bay State has leverage. 

Relative to the current landscape, the Massachusetts sports betting scene is easily a top five or seven market in the United States. That will change if and when sports betting in California and sports betting in Texas get legalized. Even sports betting in Georgia could theoretically usurp The Bay State. But those markets are not joining the fold anytime soon. That means online operators will have a special desire to continue doing business in Massachusetts. 

This should afford The Bay State enough leverage to make certain adjustments. Stricter advertising protocols, changes to betting types, more responsible gaming measures and even a heightened tax rate are all within the realm of possibility.

However, it does seem like Senator Keenan’s bill, in its present form, qualifies as too ambitious. And maybe that is a point. Supporters of the proposal may view the terms as a springboard for negotiations. In this scenario, they do not expect to get a 51 percent tax rate successfully implemented. They will be hoping for a rate north of 20 percent but lower than the initially proposed amount.

Of course, we cannot say for certain whether this is the goal. Other states have 51 percent online sports betting tax rates. Senator Keenan might be dead set on the same. We would bet against that type of push panning out. But hey, you never know.

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