Massachusetts Sports Betting Handle Numbers Up Year-Over-Year
Bay State Operators Took In A Ton Of Money
The Massachusetts May revenue on legal sports betting was a mixed bag as total handle increased on a year-over-year basis but actually declined from the previous month. Month-to-month revenue increased a lot, over 16 percent, but was down on a year-over-year basis. This was because of a much lower hold rate, in the neighborhood of 10 percent as opposed to the all-time record of 13.6 percent from May 2023.
Handle for May 2024 in the Bay State was $587 million, which was a massive 32.4 percent increase over May 2023, showing continued growth in Massachusetts regarding the overall legal batting marketplace. There was a 2.7 percent in handle on a month-to-month basis, though, as handle in April of this year was over $600 million. This could be explained by March Madness scores and odds extending into the beginning of April, to be fair, and May mostly consisting of NBA and NHL playoffs as well as MLB. The college basketball bump can’t be ignored when analyzing all of these numbers.
Total adjusted gross revenue for May 2024 was roughly $57 million, a roughly 5 percent decrease from May 2023 but a marked increase from April 2024’s $50.6 million figure. So, based on how you read things, this past month was either a big success for Massachusetts because of the big, big rise in handle compared to the previous year and in revenue on a month-to-month basis, or a disappointing one because of a month-to-month handle drop and year-over-year revenue drop.
Big Month For DraftKings (As Always)
DraftKings has always had a big edge in Massachusetts, the state where the company was founded, and has a loyal customer base. For DraftKings, the Massachusetts May revenue figures were promising as the operator cashed in $28.3 million in revenue on almost $300 million in total wagers. The operator also was extremely close to eclipsing $300 million in handle for the third-straight month, demonstrating remarkable consistency in a pretty saturated state from a competition perspective.
FanDuel was in second place in Massachusetts online sports betting as usual, with revenue of nearly $20 million on $172 million in handle. FanDuel was followed by BetMGM, ESPN Bet, Fanatics and Caesars in terms of the online operators. It’s true in many states but it’s especially stark in Massachusetts: There’s DraftKings and FanDuel, and then there’s everyone else. It’s looking extremely difficult for any of the smaller and lesser-known operators to ever hold a candle to the big guys unless something drastically changes in the marketplace.
There was also contributions in handle and revenue from Massachusetts’ physical casino online betting operations, like those from Encore Boston Harbor, Plainridge Park Casino and MGM Springfield. Those numbers are pretty small in the grand scheme of things but they still represent a non-negligible segment of the market. On the whole, though, 98 percent of the total sports betting handle collected in Massachusetts in May 2024 was from the six online operators.
No Changes To Tax Structure
The Massachusetts May revenue figures resulted in $11.5 million going to the state in tax revenue while $28 million went to the state from casino gaming. Interestingly, there was a recent proposal in the Massachusetts Statehouse to increase the state tax rate on legal sports gambling from 20 percent to 51 percent, bringing it closer in line to neighboring high-tax states, like New York.
However, lawmakers rejected that proposal, with opponents citing how Massachusetts already has strict responsible gambling regulations and that an increase in the tax rate could make it less favorable for operators exist in the state. In turn, that could convince operators close up shop in Massachusetts because the juice wouldn’t be worth the squeeze, so to speak.
While the relatively low tax rate does make it more profitable for operators to continue offering picks and parlays in the state, it means that tax revenues are going to remain relatively low compared to what is being brought in as revenue, at least when compared to other similar states. That’s the trade-off states like Massachusetts need to make as they try to thread the needle of being an attractive place for legal sports betting operators while also making the endeavor as productive and beneficial for the states as possible.
It’s not an easy decision for lawmakers to be making especially as sports betting becomes more and more widespread throughout the U.S. and every state can turn into a potential competitor for betting customers.
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