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Massachusetts Senate Rejects Sports Betting Tax Rate Hike

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The Massachusetts Senate rejected a budget amendment proposal Thursday that aimed to change the state’s online sports betting tax rate from 20% to 51%.

Sen. John Keenan, who proposed the change, spoke to the Senate for over 20 minutes about the dangers of gambling and his desire for the change. He was hopeful some of the additional sports betting tax revenue could be used to better help problem gamblers in the state.

“I can’t think of a single reason why we would not raise taxation rates on online sports betting,” Keenan said.

Keenan’s desire for the change came in part due to concerns about problem gambling rates potentially rising should the state lottery become available online. He also expressed concerns about the state one day legalizing online casinos, which could lead to more problem gamblers.

Operators pleased

While Keenan couldn’t think of any reasons not to dramatically increase Massachusetts’ tax rate, sports betting operators have thought of plenty.

The Sports Betting Alliance, which includes BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel has spoken out against a proposed tax rate increase in Illinois in recent weeks. The operators argue a tax increase will lead to them offering bettors worse odds and fewer promotions, which could keep some bettors on the illegal market.

While Massachusetts failed to bump its tax rate, Ohio doubled its tax rate from 10% to 20% last year. New Jersey and Illinois each have active efforts to raise their online sports betting tax rates.

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Sports betting operators likely aren’t done facing the threat of increased tax rates nationwide, but Thursday’s outcome can be viewed as a win for operators.

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