Is Massachusetts about to legalize online casinos on your smartphone?
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For those already in the gambling business, the stakes are high, and the politics of it all have made for strange bedfellows.
On one side is homegrown sports betting behemoth DraftKings and arch rival FanDuel, which support the bills and stand to benefit by providing the digital platforms that power these games. Joining their camp: MGM Resorts International, which operates a casino in Springfield and online gaming platform BetMGM.
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A DraftKings employee in the lobby of their Back Bay offices.
Lane Turner/Globe Staff
On the other side is Encore Boston Harbor, the Everett casino operated by Wynn Resorts, and UNITE HERE
Local 26, the politically influential hospitality union with many members who work at Encore; they oppose the bills, saying online gaming would cannibalize the brick-and-mortar casino business and reduce jobs in the industry. And then there are those who are wary for fear it will create more problem gamblers
by making it even easier to bet on your phone.
Supporters and opponents of online casinos squared off during a
DraftKings and FanDuel argued that online casinos should be legalized because there's already a robust illegal market, so why not regulate and tax it? According to the
mostly on websites based outside the United States.
It's the same argument that's been made to legalize sports betting in many states, including Massachusetts, ever since the Supreme Court struck down a federal ban in 2018. Since sports betting began in Massachusetts in early 2023, it has flourished here with billions of dollars wagered, generating more than $300 million in taxes and assessments, according to the
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Type 'online casino in Massachusetts,' and you quickly realize how we're all one Google search away from trying our luck.
Seven states, including Connecticut, Rhode Island, and New Jersey, have legalized internet casino gaming, and proponents estimate that if Massachusetts levied a 20 percent tax, the state could generate $230 million to $275 million a year
in new revenue. (That's the same tax rate
as online-only sports betting, while land-based resort casinos are assessed at 25 percent.)
And with state lawmakers facing tough budget decisions this year, David Prestwood, a government affairs manager at DraftKings, knew exactly what to tell the Joint Committee on Consumer Protection and Professional Licensure.
'This money may be especially critical for Massachusetts in the face of anticipated federal funding cuts and reductions in state and local aid,'
he
said at last month's hearing.
Online casinos may seem no different than sports betting, but their appeal runs broader and deeper than placing a bet on a baseball game. And internet gambling is far different than going to a brick-and-mortar casino, which requires getting there and interacting with staff. Online, you can gamble in your pajamas.
'There's all these friction points where the player has the chance to think twice with about placing the next bet,' said Mark Stewart, a board member of the
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Stewart, who is general counsel of The Cordish Companies, a Baltimore real estate and casino developer, testified virtually at the hearing, while Encore Boston Harbor president Jenny Holaday provided written testimony opposing online gaming and warned how it could result in a 'dramatic reduction in the associated taxes that Encore pays to the Commonwealth,' a sum that has totaled nearly $1 billion since the casino opened in 2019.
The owner of Encore Casino in Everett is pushing to stop a bill on Beacon Hill that would broadly legalize online gambling on slots and poker games.
John Tlumacki/Globe Staff
Encore employs about 3,300 workers, about a third of whom are part of Local 26.
A union representative also testified against the bills, citing an independent research analysis funded by the
(A
It's shaping up as a test of who has more clout on Beacon Hill — Encore and its coalition of boots-on-the-ground supporters in the unions and Everett, or tech companies that have deep pockets.
Brick-and-mortar casinos
could get in on the game, too. The legislation sets aside licenses for the state's existing casino operators, along with four licenses for internet gaming platforms. Along with slots, they'd allow poker, blackjack, craps, and even games with a live dealer.
But what about the
I can't imagine state Treasurer and Lottery chair, Deb Goldberg, being happy about online casinos, which could eat into lottery profits. The lottery in fiscal 2024 netted nearly
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'If online gaming expands, we must ensure the Lottery is supported and stays competitive,' Goldberg said in a statement. 'Every dollar spent on private platforms could mean less for our cities and towns and early childhood education.'
Then there are concerns about addiction, with calls to the
surging
since sports betting was legalized.
Lia Nower, director of the Center for Gambling Studies at Rutgers University said what drives up the risk of problem gambling is giving people more options.
'There's a cumulative effect,' she said. 'The more things that you gamble on, the more often you gamble and the more venues in which you gamble, the higher your risk.'
In this digital era, online casinos may feel inevitable, yet internet gambling
is so new we don't really know how addictive it could be, especially among young bettors. Remember how we initially thought social media was just fun and games?
Critics of online gaming say it reduces barriers to problem gambling, compared with going to a brick-and-mortar casino.
Steve Helber/Associated Press
Yet the pressure will be intense from a gaming industry that's keen to keep expanding online. Boston-based
Why? Just follow the money, explains Nower.
'It's the cash cow for the industry,' she said.
State Senator Paul Feeney — who is sponsoring the online casino legislation with state Representative Daniel Cahill — said lawmakers are well aware the need to carefully weigh all the costs and benefits, in particular the investments made by land-based casinos which he described as 'sacrosanct.'
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Yet there's also an urgency with the state facing budget pressures.
'I wouldn't say that anything is on a fast track,' said Feeney. 'There's a renewed interest in looking at how we can maximize tax revenue without broad-based tax increases on residents.'
We tend to give the Legislature a hard time for moving too slowly, but this time we shouldn't. At the very least, the state should conduct its own independent analysis, rather than relying on industry-funded studies to weigh the impact on existing land-based casinos and the lottery, and whether it would create a new class of problem gamblers.
Online gaming is too big of a gamble to not get this right.
Shirley Leung is a Business columnist. She can be reached at
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