Bettors and sports fans are eagerly watching the Gambling Commission as it works to get legal sports betting up and running in Massachusetts, but regulators said Thursday that a quirk in the new law has created a major headache, preventing the commission from laying out a timetable for when legal betting can actually start here.
The Sports Betting Act, which was passed and signed into law by Gov. Charlie Baker in early August, allows the Gambling Commission to issue sports betting licenses to arcades, casinos and centers for the simultaneous acceptance of in-person bets, for each of these facilities for partnership with mobile operators and for up to seven mobile operators that are not connected to any of the physical facilities.
The law also includes a section that talks about temporary licenses for sports betting operations. But while the number of final non-binding mobile licenses is limited to seven, the Legislature did not include a limit on the number of temporary licenses. And with at least 30 operators expected to apply for those seven non-binding licenses, commission officials worry about a potential situation where dozens of operators qualify for temporary licenses that can last up to a year, pay a fee of $1 million each, begin accepting bets in Massachusetts and then must close once the final seven mobile-only licensees are selected.
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“This structure and this disconnect creates complications for both the regulator and the licensee itself, and also creates consumer protection concerns for the public,” executive director Karen Wells said. She added: “For companies that enter the provisional license pool as a mobile operator and do not progress to a full license, as many as 76 percent of them will have to cease operations in Massachusetts after the commission makes this final decision on up to seven unaffiliated the license.”
As for consumer protection, Wells said there would be “inevitable confusion in the market” if or when betting platforms with temporary licenses suddenly ceased operations here, but also highlighted other issues that would come into play: How can the commission guarantee that players will get money left in their accounts back? What would happen if an operator was stopped before the outcome of the bet they accepted was known? Should companies be required to post bonds to ensure they can pay all their bets if they don’t secure a final license?
“The idea of having to issue notices to bona fide businesses that simply failed to make our final reduction to seven is simply untenable to me,” said Chairwoman Cathy Judd-Stein. “And then the malfunctioning customers … that’s just a construct that I would argue was never intended here by our thoughtful legislature. But I haven’t come up with a practical solution.”
Judd-Stein hopes to get more information next Thursday when the committee holds a mobile-only roundtable discussion with potential candidates at the State House. Commissioners plan to ask cell carriers that have expressed interest in a Massachusetts license about the issue, which they wrestled with for nearly two hours Thursday.
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“Next Thursday, when we’re going to hear from every interested operator on these issues, it might shed some light, it might shed some consensus and it might also come up with a solution that we’re not thinking about.” And I’m keeping my fingers crossed in that regard,” Judd-Stein said.
Wells added, “They can come to the table next Thursday and say, ‘Hey, we’ve got this great solution, we understand the problem.'” So we’d like to hear from them to see if there’s a way to deal with that complication within the statute.”
Some commissioners are also hoping next week’s roundtable will bring them closer to answering the question on every bettor’s lips: “When can I place a legal bet?”
“We’re not really talking about the issue that everybody wants to know, and that’s about the weather,” Commissioner Brad Hill said Thursday. “If we split it up and let the [casinos, slots parlor and simulcast centers] get their licenses first, get them up and running and then go down the same road we’re making our regulations for the rest of us, what’s the timing for all of this? And we should have at some point now that we have this in front of us, some indication of what we’re talking about with time. And I was frustrated that I couldn’t figure out for myself what that would be.”
Both Judd-Stein and Commissioner Eileen O’Brien said they believe the commission may have already drawn up a timetable for the start of legal betting if it weren’t for the issues surrounding temporary licensing.
The deal was hammered out by lawmakers on Monday, but it looks like it will take longer than expected to go live.
“I think if it weren’t for this complexity, Brad, that we’re dealing with, we probably would have what looks like a timeline that we can reasonably rely on,” Judd-Stein said. She added: “I think we would have released this probably even earlier than today’s meeting.”
Hill, who last week called out a guest on 98.5 The Sports Hub’s “Toucher and Rich” morning show for suggesting Bay State bettors might be able to place bets by Oct. 1, said he thinks it’s important the commission made it public that it was working hard to launch betting here. “I just think at some point we have to make some time for people because I want people to know that we’re working very hard at this,” he said. “And some of the comments you hear — not that I care what the press says about me, I assure you I don’t — but the criticism is that we don’t really put any time frame on when that might happen. And that’s just a problem for me.”