Massachusetts Sports Betting: Where Will the Tax Revenue Go?
Billie Weiss/Boston Red Sox/Getty Images. Pictured: Boston Red Sox third baseman Rafael Devers
As the online Massachusetts sports betting launch date approaches, you might be wondering: where will the tax revenue from sports betting go?
To put it simply, the money from sports betting tax revenue will go toward education, infrastructure, and nonprofit organizations in the Bay State.
In-person sports betting launched in Massachusetts on Jan. 31 while online betting is scheduled to go live at 10 a.m. on March 10.
Read on to see the percentage breakdown of which funds Massachusetts' tax revenue will be allocated toward.
Massachusetts Sports Betting Tax Revenue Allocations
According to the Massachusetts Gaming Commission, Massachusetts sports betting tax revenue will go toward these state funds:
- General Fund — 45%
- Gaming Local Aid Fund — 27.5%
- Workforce Investment Trust Fund — 17.5%
- Public Health Trust Fund — 9%
- Youth Development and Achievement Fund — 1%
The General Fund supports government services while the rest of the funds are supporting Massachusetts state residents.
Currently, in-person sports betting produced $9,861 in tax revenue in just its first two weeks since launching (between Jan. 31-Feb. 15). If sports in-person sports wagering can generate over $500,000 (about $10K every two weeks) in a calendar year, then online wagering can lead Massachusetts into generating up to $2 million in tax revenue.
Category 1 Licensee Gross Gaming Revenue
The MGC has its gross gaming tax revenue breakdown available for public viewing on its site.
Most of the tax revenue received from Category 1 resort casinos is allocated toward the following Massachusetts funds: Local Aid, Transportation Infrastructure, and Education.
Category 1 gross gaming tax revenue will contribute to 12 state funds compared to sports wagering revenue's contribution to five state funds.
In total, revenue generated from Category 1 licensees is taxed at 25% of gross gaming revenue and 15% of sports wagering revenue (40% in total).
Category 2 Licensee Tax Revenue Contributions
Category 2 license holders in Massachusetts are smaller businesses that also hold a legal license to offer sports betting for visitors.
Category 2 license holders are taxed 49% of gross gaming revenue and 15% of gross sports gaming revenue.
In total, 82% of Category 2 tax revenue is allotted for the Local Aid Fund and 18% will go toward the Race Horse Development Fund.
Category 3 Licensee Tax Revenue Contributions
Category 3 license holders in Massachusetts are sportsbooks tethered to a casino or other licensed in-person vendor. These businesses, in addition to Category 1 (retail-only) licensees, are expected to generate the most gross gaming and sports wagering revenue.
The combo online and retail sports wagering (Category 3) licensees are taxed on 20% of gross sports wagering revenue.
When to Expect Massachusetts Sports Betting and Gaming Tax Revenue Reports
All licensees provide monthly revenue reports that are made available for public viewing on Massgaming.com.
Check back in the middle and end of each month for revenue reports the official commission website.
How would you rate this article?