Massachusetts sports betting market starts to take shape
Though its too early to tell which sports betting operators will earn licenses in the soon-to-legalized Massachusetts market, regulations and prior corporate relations could help forecast which sportsbooks will launch in the state.
Massachusetts lawmakers approved an online sports betting bill Monday that will allow up to 15 online licensees. Assuming it is signed into law by Gov. Charlie Baker as expected, retail and possibly mobile books could open by year’s end.
The legislation allows the state’s three major gaming facilities – MGM Springfield, Wynn’s Encore Boston Harbor and Penn National’s Plainride Park Casino – to partner with two online sportsbooks apiece. The three will use one of their two licenses (or “skins”) on their company’s flagship sports betting platforms; BetMGM, WynnBet and Barstool Sportsbook, respectively.
Oh and for people wondering #BarstoolSportsbook is guaranteed both retail and online in MA. There will be no behind the scenes shenanigans from our competitors to keep us out. We’re coming home
— Dave Portnoy (@stoolpresidente) August 1, 2022
MGM used a second skin option for its in-house Borgata online gaming offering in New Jersey, but it seems unlikely it, Wynn or Penn National will do something similar in Massachusetts. In most other multi-skin states, operators reach agreements with other companies for some form of financial compensation in exchange for the right to the license.
In 2018 MGM and Boyd Gaming announced a reciprocal market access agreement between the two companies spanning 15 states, including Massachusetts. All deals are contingent on the structure of each state’s legislation and it’s unclear if Boyd is guaranteed access as part of their deal under the confines of the 2022 Massachusetts bill.
Boyd owns 5% of FanDuel, the US handle market share leader, and a deal with MGM could be a way for FanDuel to enter the state. Boyd also operates its own eponymous sportsbook, but it is a far smaller national player.
Penn National, which manages America’s largest portfolio of retail casino gaming properties, has frequently partnered with other operators for its national online sports betting licenses. Notable agreements include deals with PointsBet and Rush Street Interactive, both companies that have expanded across the US aggressively and will likely pursue Massachusetts.
Bally’s also has a relationship with Penn National through its real estate investment trust subsidiary. The Rhode Island-based company has spent aggressively on its Bally Bet sportsbook in New York and could be poised to make another financial commitment in neighboring Massachusetts.
Outside of Massachusetts, Wynn’s only other properties are in Nevada, where it hasn’t even launched WynnBet. Most of WynnBet’s market access partnerships in other states are with professional sports teams or smaller, independently-owned casinos such as Kewadin Casino in Michigan and Bronco Billy’s in Colorado that are not operated by larger gaming companies.
However, Wynn has a deal with gaming and entertainment conglomerate Delaware North for its WynnBet online sportsbook and casino in West Virginia. Delaware North has applied to operate its in-house Gamewise sportsbook in Ohio and could pursue a similar deal in Massachusetts.
Buffalo, New York-based Delaware North also owns TD Garden, home arena for the NHL’s Boston Bruins and NBA’s Boston Celtics. Though in-stadium sportsbooks or professional sports team market access agreements weren’t included in the final Massachusetts sports betting bill, the arena affiliation (and subsequent sportsbook cross-promotional opportunities) could further incentivize the company’s push for another Gamewise sportsbook.
Wynn, which has publicly scaled back its online sports betting ambitions, could be content with a retail book that’s already built out within its Boston-area casino property and instead reach deals for both its skins with outside online operators. However, Wynn has already spent hundreds of millions on building and promoting its Massachusetts casino and it seems unlikely to pass up an online compliment to its brick-and-mortar investment.
Massachusetts should be a competitive sports betting state, which is good for consumers – and probably not good for operator profit margins. DK, MGM, and WynnBET consider themselves the home team. The other big players will try to disrupt that.
— Captain Jack Andrews (@capjack2000) August 1, 2022
In addition to the six potential online sports betting licenses allotted between the three casinos, Massachusetts’ sports betting bill will allow two simulcast parimutuel horse racing facilities one skin apiece. Neither has a clear connection with an existing sports betting operator (assuming, as expected, they partner with an existing brand instead of trying to build a sportsbook on their own). This means competition could be fierce for what would be guaranteed access to what is expected to be one of the nation’s more lucrative per capita markets.
Massachusetts’ sports betting bill also creates up to seven additional online licenses available for companies not partnered with the aforementioned retail entities. There are more than 40 online sports betting operators in the US, most if not all of which will have interest in the state.
DraftKings is the likeliest sportsbook (besides those directly tied with a physical casino property) to earn a license. The Boston-based company has lobbied for legal Massachusetts sports betting for years and CEO Jason Robins issued a statement lauding the bill’s passage Monday.
DraftKings also drastically outbid all other sportsbooks to earn a de facto monopoly in neighboring New Hampshire, agreeing to pay more than 50% of its gross gaming revenue in taxes in exchange for the state’s exclusive rights to legal sports betting.
Caesars, which along with FanDuel, DraftKings and BetMGM has been among the nation’s largest market share leaders, is also a leading contender. It’s brand recognition – and willingness to spend handsomely – position it well to enter the state.
Several companies with far smaller American sports betting footprints could also seek to take bets in Massachusetts.
Though it has not yet earned an online sports betting license in any state, Fanatics could also pursue Massachusetts market access for its pending digital sportsbook. The company was denied a license in New York, but it is set to earn licensure in Ohio and could target another high-population state with well-known sports teams as a key for its ambitious long-term expansion plans.
Bet365, a European gaming giant that has expanded slowly in the US, could also seriously consider Massachusetts. Licensed only in New Jersey in Colorado, it also has pursued an Ohio online sportsbook. Like Fanatics has the financial resources to make a serious run in Massachusetts.