After months of research and debate, Massachusetts regulators decided to tax promotional credits for sports betting on Tuesday. The Massachusetts Gaming Commission (MGC) experienced a moment of disagreement in the beginning of this year. Two commissioners felt that the wording of the law required the taxation on promotional credits, while the remaining three believed it was the commission’s decision.
The argument became moot when the group heard from MGC Director for Research and Responsible Gambling Mark Vander Linden and MGC Chief Financial and Administration Officer Derek Lennon about the financial impact. They also heard from outside counsel RSM. Three commissioners, who thought the decision was theirs to make, agreed that a taxation of promotional credits was the best option for the state.
At first, it was Commissioner Bradford Hill who advocated for promotional credit deductions. He argued that such breaks are common in other industries to attract and retain business. He said that he would be willing to proceed without the tax credit after learning it could affect funding for responsible gambling.
Hill said that no operators in the state had approached the commissioners to ask for promotional credit deductions. In his opinion, operators did not want this.
Eileen O’Brien , Commissioner, used the time available during the meeting to mention that a number of legislators had contacted commissioners in order to inform them that the intention of the bill is to prohibit promotional credits. While some commissioners were not on board, the law didn’t intend that the MGC make such a determination.
As the sports betting market matures, states are reducing or eliminating the promotional credit deductions. Kentucky, which was one of only two states to legalize sports gambling this year, also decided to exclude promotional credit deductions.