Massachusetts mulls sportsbook regulatory regime changes ahead of launch
Pre-registration, advertising and promotional deductions from taxable revenue on the slate as March launch date looms
Officials from the Massachusetts Gaming Commission (MGC) are considering a number of potentially impactful measures to the state’s forthcoming launch of mobile sports betting.
Among these are stringent measures relating to sportsbook advertising in the state, measures which, if adopted, would make Massachusetts one of the toughest jurisdictions to market in the US.
Much of these changes center on the protection of vulnerable groups through controls on advertising via third parties, as well as bars on false or misleading advertising and requirements for full disclosure where “free” or promotional bets are offered.
Under the proposed lines, operators would be barred from marketing in media outlets, including social media platforms that are primarily used by individuals aged under 21 years of age.
In addition, advertising of sportsbooks at any event aimed at minors where 75% or more of the audience is reasonably expected to be under 21 years of age would be expressly prohibited.
Indeed, marketing to any other audience where 75% or more of the audience is presumed to be under 21 is prohibited.
Advertising in elementary, middle or high schools or at any sports venue exclusively used by schools or any college or university campus would likewise be prohibited.
Marketing to underage individuals has been a hot topic in the US over recent weeks, with regulators in Ohio fining Barstool Sports for advertising during its college football show in November.
This action prompted scrutiny from the MGC during Barstool’s license application hearings, however the PENN Entertainment subsidiary was ultimately awarded a license in the state.
Other impactful areas to be considered by the MGC include whether to have a pre-registration period before the official launch of mobile sports betting in March, and the issue of whether or not operators could be permitted to deduct promotional spend from their respective taxable revenue.
A generally accepted method of preparing for a state launch – pre-registration – gives operators a window to generate early market share through the solicitation of interest and potential pre-launch promotions.
An email obtained by news website Covers, sent from MGC executive director Karen Wells to other members of the MGC, has revealed extensive dialogue between the MGC and prospective licensees in the state.
According to the email, Wells confirmed responses from six licensees relating to whether any actions had been taken in respect of advertising, with only BetMGM confirming the release of so-called ‘mailer’ promotional material to Massachusetts residents to highlight an impending launch.
“Most of the respondents indicated that they had not engaged in any pre-registration activities, but two noted that they have an established mechanism nationally where an account could be preliminary set up and could later be finalized should the operator be allowed to take wagers,” Wells wrote.
“Both those operators indicated that customers are permitted to fund their ‘generic’ accounts at this time,” the message concluded.
The other main regulatory shake up centred over whether or not the MGC could allow operators to deduct promotional expenditure from their taxable revenue. While not definitively part of prospective framework, the MGC voted 3-2 that it could do so if authorized.
Other states where promotional deductions can be taken off an operators’ revenue for tax purposes include Arizona, Pennsylvania, New Jersey, and Colorado.