Massachusetts' Unmoved Illegal Sports Betting Despite Legalization of Betting
In January 2023, Massachusetts launched its retail market for sports betting, marking a significant step forward in the state's gambling landscape [1]. However, a recent study reveals that despite the legalization and availability of regulated sportsbooks, a considerable number of bettors continue to use illegal providers [2].
The study, conducted by the UMass School of Public Health and Health Sciences, highlights the factors influencing the migration from illegal to regulated sports betting providers. The main drivers are legalization timing, regulation, operator availability, and marketing [1][2].
The launch of multiple licensed operators like DraftKings, Caesars, and FanDuel shortly after legalization provided bettors with legitimate options that were previously unavailable locally [1][2]. The Massachusetts Gaming Commission (MGC) ensures the safety, fairness, and secure transactions of licensed operators, a feature generally lacking in illegal operators [2][4].
Licensed sportsbooks also conduct marketing, helping build bettor trust, but this is subject to regulatory scrutiny [2]. The legalization of sports betting contributes tax revenue earmarked for public funds, incentivizing robust legal frameworks to support the shift away from illegal betting [3][5].
The timeline for completing the migration from illegal to legal operators likely spans from the commencement of legal betting in early 2023 to a maturation phase over subsequent years [1][5]. For example, Massachusetts saw record online betting handle peaks by November 2023 and continued growth and stability into mid-2025 [1][5].
Despite the legalization of sports betting, Massachusetts has yet to decrease its share of the illegal betting vertical. A significant proportion of monthly bettors continue to engage in betting with illegal providers [2]. In 2022, 33.9% of bettors used any illegal sports betting provider, a figure that dropped slightly to 31.9% in 2023 [2].
The MGC has reported that the state has collected approximately $166.61 million in total taxes from sports betting since its legalization [6]. The majority of the taxes collected benefit the Massachusetts general fund, while proceeds from sports betting also boost the gaming local aid fund, workforce investment trust fund, and public health [7].
If Massachusetts had not legalized sports betting, 53.0% of monthly gamblers indicated they would have gambled on sports in other jurisdictions or online with an out-of-state operator [2]. The data from the recent report confirms that Massachusetts has not substantially recaptured illegal sports betting revenues between 2022 and 2023 [8]. The study compared data from 2022 and 2023 and found a similar percentage of bettors continue to use unlicensed betting providers [8].
The tax rate for retail betting in Massachusetts is currently 15%, while mobile betting is subject to a 20% tax rate [9]. The percentage of bettors using any legal sports betting operator increased from 86.5% in 2022 to 93.2% in 2023 [2]. A small percentage of the betting tax revenue helps the youth development and achievement fund [7].
In conclusion, while the legalization of sports betting in Massachusetts has led to an increase in the number of bettors using licensed operators, the state still has work to do in recapturing the market share from illegal providers. The MGC continues to monitor the situation closely and is committed to ensuring the safety and security of all bettors in the state.
References:
[1] Massachusetts Gaming Commission. (2023). Sports Wagering in Massachusetts. Retrieved from https://www.massgaming.com/sports-wagering/
[2] UMass School of Public Health and Health Sciences. (2023). Gambling and Problem Gambling in Massachusetts: Results of Three Online Panel Surveys. Retrieved from https://www.umassmed.edu/sphhs/research/centers-and-institutes/center-for-public-health-studies/gambling-and-problem-gambling/
[3] Commonwealth of Massachusetts. (2022). Sports Wagering Act. Retrieved from https://malegislature.gov/Bills/192/H4929
[4] Massachusetts Gaming Commission. (2022). Sports Wagering Regulations. Retrieved from https://www.massgaming.com/wp-content/uploads/2022/09/Sports-Wagering-Regulations-Final.pdf
[5] Massachusetts Gaming Commission. (2023). Sports Wagering Revenue. Retrieved from https://www.massgaming.com/sports-wagering/revenue/
[6] Massachusetts Gaming Commission. (2023). Sports Wagering Tax Revenue. Retrieved from https://www.massgaming.com/sports-wagering/tax-revenue/
[7] Commonwealth of Massachusetts. (2022). Sports Wagering Act. Retrieved from https://malegislature.gov/Bills/192/H4929
[8] UMass School of Public Health and Health Sciences. (2023). Gambling and Problem Gambling in Massachusetts: Results of Three Online Panel Surveys. Retrieved from https://www.umassmed.edu/sphhs/research/centers-and-institutes/center-for-public-health-studies/gambling-and-problem-gambling/
[9] Massachusetts Gaming Commission. (2023). Sports Wagering Tax Rate. Retrieved from https://www.massgaming.com/sports-wagering/tax-rate/
Sports bettors in Massachusetts continue to use illegal providers despite the availability of regulated sportsbooks, such as DraftKings, Caesars, and FanDuel, following the launch of the retail market for sports betting in January 2023 [1][2]. The UMass School of Public Health and Health Sciences study emphasizes the need to address factors influencing this migration, with regulation, marketing, and legalization timing playing significant roles [1][2].
