BOSTON (SHNS) – Bettors and sports fans are eagerly watching the Gaming Commission as it works to get legal sports betting up and running in Massachusetts, but regulators said Thursday that a quirk in the new law has created a big headache that is preventing the commission from laying out a timeline for when legal wagering might actually start here.
The sports betting law that passed and was signed by Gov. Charlie Baker in early August allows the Gaming Commission to issue sports betting licenses for the state’s slots parlor, casinos and simulcast centers to take in-person bets, for each of those facilities to partner with mobile operators, and for up to seven mobile operators that are not tethered to one of the brick-and-mortar facilities.
The law also includes a section that speaks to temporary licenses for sports wagering operations. But while the number of final untethered mobile licenses is capped at seven, the Legislature did not include a limit on the number of temporary licenses. And with at least 30 operators expected to apply for those seven untethered licenses, commission officials are worried about a potential situation in which dozens of operators qualify for temporary licenses that could last up to a year, pay a $1 million fee each, begin taking bets in Massachusetts, and then have to shut down once the seven final mobile-only licensees are chosen.
“This structure, and this disconnect, poses complications for both the regulator and the licensee themselves, and it also presents consumer protection concerns for the public,” Executive Director Karen Wells said. She added, “For those companies that do enter the temporary license pool as a mobile operator and do not advance to getting a full license, as many as 76 percent of those are going to be required to shut down their operations in Massachusetts once the commission makes that final determination of up to seven untethered licenses.”
On the consumer protection front, Wells said there would be “inevitable confusion in the marketplace” if or when betting platforms with temporary licenses suddenly cease operations here but also highlighted other issues that would come into play: How could the commission ensure players get any money left in their accounts returned? What would happen if an operator is shut down before the outcome of a bet it accepted is known? Should companies be required to put up a bond to ensure they can pay out all their wagers if they don’t secure a final license?
“The idea of having to issue notices to honorably operating businesses that just didn’t happen to make our final cut of up to seven is just untenable to me,” Chairwoman Cathy Judd-Stein said. “And then the fallout customers … it’s just a construct that, I would say, was never intended here by our thoughtful Legislature. But I haven’t figured out a practical workaround.”
Judd-Stein hopes to get more information next Thursday when the commission holds a roundtable discussion with potential mobile-only applicants at the State House. Commissioners are planning to ask the mobile-only operators who have expressed an interest in a Massachusetts license about the problem they wrestled with for nearly two hours Thursday.
“Next Thursday, when we will hear from every interested operator on these matters, might shed some light, might shed some consensus and also may come up with a solution we’re not thinking about. And I’m crossing my fingers on that front,” Judd-Stein said.
Wells added, “They may come to the table next Thursday and say, ‘Hey, we have this great solution, we understand the problem.’ So we would like to hear from them to see if there is a way to navigate this complication within the statute.”
Some commissioners are also hoping that next week’s roundtable will get them closer to being able to answer the question on every bettors’ lips: “When can I place a legal bet?”
“We’re really not talking about the question that everybody wants to know and that’s about timing,” Commissioner Brad Hill said Thursday. “If we split it and we allowed the [casinos, slots parlor and simulcast centers] to get their licenses first, get up and running, and then going down the same path we are putting together our regulations for the others, what’s the timing on all of this? And we must have at some point now, after having this before us, some indication of what we’re talking about with timing. And I’ve been frustrated that I can’t, myself, figure out what that would be.”
Judd-Stein and Commissioner Eileen O’Brien both said they think the commission could have already produced a timeline for the start of legal wagering if it was not for the questions around temporary licensure.
“I think but for this complexity, Brad, that we’re dealing with, we would probably have something that looks like a timeline that we could reasonably depend upon,” Judd-Stein said. She added, “I think we would have been rolling that out probably even earlier than today’s meeting.”
Hill, who last week called out a guest on 98.5 The Sports Hub’s “Toucher and Rich” morning show for suggesting that Bay State bettors might be able to place wagers by Oct. 1, said he thinks it’s important that the commission make clear to the public that it is working hard to launch betting here.
“I just think we need, at some point, to get some times out there for people because I want people know we’re working very hard at this,” he said. “And some of the comments that you hear — not that I care what’s said in the press about me, I assure you I don’t — but the criticism is that we’re not really putting out some type of timeframe for when this might happen. And that’s just a concern to me.”