Illegal betting on sports in Massachusetts has largely remained unchanged following the commonwealth’s embrace of expanded gambling activity. Legal sports betting began at the state’s three brick-and-mortar casinos — Encore Boston Harbor, MGM Springfield, and Plainridge Park — in January 2023. Online sportsbooks commenced operations two months later in March.
Massachusetts lawmakers had hoped that authorizing gambling on sports, along with generating new revenue through a 20% tax on online betting and a 15% tax on in-person proceeds, would hurt the black market. These tax rates are expected to raise upwards of $60 million annually for the commonwealth. However, a recent report from the UMass School of Public Health and Health Sciences suggests that hasn’t necessarily been the case.
According to the school’s Social and Economic Impacts of Gambling in Massachusetts’ summer update, there has been “no change in the proportion of monthly gamblers … who had engaged in any illegal sports betting between 2022 and 2023.” The UMass researchers did find a decrease in the proportion of monthly sports bettors who engaged only in illegal sports betting, but concluded that Massachusetts’ regulation of sports gambling “was not a substantial recapture of illegal sports betting revenues.”
UMass researcher Rachel Volberg recently presented these findings to the Massachusetts Gaming Commission (MGC). Though the July update focused on problem gambling rates, commissioners were particularly interested in the data points concerning illegal betting.
“A lot of the reason we wanted to make sure this is done and done correctly, sports wagering, is that we want to stamp out the illegal market,” said MGC Interim Chair Jordan Maynard. “The illegal market is not a victimless place.” Maynard emphasized that the regulated space offers numerous consumer protections not available in the underground and offshore markets, including responsible gaming programs, player complaint resources, and guarantees that bets will be paid and account withdrawals will be executed.
“If you have an issue with your bookie, there are only a few places you can go. If you have an issue with a legal sports wagering operator or gambling operator in the state, you can come to the Gaming Commission and we can help take care of these issues,” Maynard added.
Commissioner Eileen O’Brien said she understands how an online sports bettor might mistakenly believe an unregulated, offshore sportsbook website is a legal operation. She stressed that the state must do more “to continue to educate consumers” about what constitutes lawful sports gambling.
Since legal online sports betting in Massachusetts is only 17 months into existence, Volberg told the MGC that more time is needed to hopefully transition more bettors from the illegal market. “Many jurisdictions have found that it can take a substantial period of time for sports bettors to migrate fully from nonregulated to regulated providers,” she explained.
Sports betting has provided a substantial revenue windfall for Massachusetts. The MGC reports that since the first legal bet was wagered in January 2023, the state has collected $166.6 million in sports gambling taxes and fees.
