Massachusetts lawmakers considered significant changes to the state's sports betting rules Wednesday. Sen. John F. Keenan presented Bill S. 302 to the Joint Committee on Economic Development and Emerging Technologies, looking to ban certain types of bets.
Key Takeaways
- Massachusetts lawmakers reviewed a bill that would ban in-game prop bets and remove sports betting ads during televised games.
- Sen. Keenan argued online access and aggressive marketing have contributed to rising gambling addiction and related harms.
- The bill would require operators to increase payments to the public health trust fund while tightening regulations on betting and advertising.
The proposal, which Sen. Keenan calls the Bettor Health Act, focuses first on prohibiting in-game prop bets. It also seeks to limit industry visibility by removing sports betting advertisements during televised games.
Sen. Keenan said the current model has grown significantly larger than lawmakers anticipated when sports betting was legalized in the state. He maintains easy online access is worsening gambling-related harm.
He said stricter rules are necessary to combat addiction and mental health issues as well as tightening finances. Some younger bettors reported feeling pressured by constant advertising, and residents and bettors were also concerned about how in-game markets encourage people to place bets immediately.
Since Massachusetts sports betting became legal in early 2023, the state has made more than $315 million in tax revenue. The proposal would require operators to contribute more money to the public health trust fund.
Regulator warns operators against prediction markets
The Massachusetts Gaming Commission (MGC) issued a formal notice Thursday, warning operators against offering or directing consumers to sports-related prediction markets in the state.
The MGC prohibits operators from providing sports event contracts either directly or through affiliates.
It states that violations could result in license revocation, and the MGC requires operators to submit written compliance plans within 10 business days.
The notice followed an executive-session meeting on prediction markets and arrived shortly after FanDuel and DraftKings announced plans to launch event contracts in the coming months.
State court to hear Kalshi case
The MGC’s stance on prediction markets set the stage for an escalating legal battle involving Kalshi. A federal judge recently ruled Kalshi’s lawsuit against Massachusetts must be heard in state court rather than federal court, a decision that cannot be appealed and positions the state advantageously as it seeks to halt Kalshi’s sports event contracts.
Attorney General Andrea Campbell sued Kalshi in September in Suffolk County Superior Court, arguing that its contracts constitute unlicensed sports gambling. Kalshi countered that the Commodity Exchange Act preempts state law and places the company's operations solely under the jurisdiction of the Commodity Futures Trading Commission.
While federal courts have previously granted Kalshi injunctions in Nevada and New Jersey, Judge Richard G. Stearns rejected Kalshi’s claim of complete preemption, finding that the company presented only a standard federal preemption defense.
Legal analysts have noted that state-level judges are generally more receptive to state regulatory authority, leaving Kalshi to defend its federal-preemption argument in a less favorable venue.
