In Massachusetts, illegal sports betting has mostly stayed the same despite the commonwealth's acceptance of the expanded gambling activity. 

Legal sports wagering commenced at the state's three physical casinos — Encore Boston Harbor, MGM Springfield, and Plainridge Park — in January 2023. Online sportsbooks began their operations two months later in March. 

By imposing a 20% tax on online betting and a 15% tax on in-person earnings, which are projected to generate over $60 million each year for the commonwealth, Massachusetts lawmakers argued that legalizing sports gambling would diminish the black market. A recent study from the UMass School of Public Health and Health Sciences indicates that this hasn’t always been true. 

The school's summer update on the Social and Economic Impacts of Gambling in Massachusetts reports that there has been “no shift in the percentage of monthly gamblers … who participated in any illegal sports betting from 2022 to 2023.” The UMass researchers observed a reduction in the share of monthly sports bettors participating solely in illegal sports betting, but they determined that Massachusetts’ oversight of sports gambling “did not significantly recover illegal sports betting revenues.” 

Worried Commissioners 

UMass researcher Rachel Volberg recently shared the July results with the Massachusetts Gaming Commission (MGC). While the July update emphasized rates of problem gambling, commissioners noted that their curiosity was sparked by the data on illegal betting.

"A lot of the reason we wanted to make sure this is done and done correctly, sports wagering, is that we want to stamp out the illegal market,” said MGC Interim Chair Jordan Maynard. “The illegal market is not a victimless place.”

Maynard stated that the regulated environment offers many consumer safeguards that are not present in the underground and offshore markets, such as responsible gaming initiatives, resources for player grievances, and assurances that bets will be honored and account withdrawals processed.

"If you have an issue with your bookie, there are only a few places you can go. If you have an issue with a legal sports wagering operator or gambling operator in the state, you can come to the Gaming Commission and we can help take care of these issues,” Maynard said.

Commissioner Eileen O’Brien expressed that she comprehends how an online sports bettor could be misled into thinking that an unregulated, offshore sportsbook site is a legitimate enterprise. She stated that the state needs to take additional measures "to keep informing consumers" about what is allowed and what isn’t in sports gambling. 

Additional Information Required 

Given that legal online sports betting in Massachusetts — the favored betting option in states permitting both retail and online sportsbooks — has been operational for only 17 months, Volberg informed the MGC that additional time is required to potentially shift more bettors from the illegal market.

"Many jurisdictions have found that it can take a substantial period of time for sports bettors to migrate fully from nonregulated to regulated providers,” she explained.

Sports wagering has generated a significant revenue boost for Massachusetts. The MGC reports that from the moment the initial legal bet was placed in January 2023, the state has garnered $166.6 million in taxes and fees from sports wagering.