As a commonwealth state and the landing site of the Mayflower, Massachusetts has a rich history with gambling. This history dates back to the mid-18th century, when the first public lotteries were authorized to cover the expenses associated with King George’s War. Lotteries in their modern form became legal in the early 1970s, but authorized casino gaming did not arrive in the state until 2011.
At the time of writing, Massachusetts is home to three brick-and-mortar gaming venues. Wynn Resorts and Blue Tarp Redevelopment operate casino resorts in the cities of Everett and Springfield, while Penn National Gaming is responsible for a slot-only parlor in Plainville. The three venues support more than 1,640 jobs and generated $1.02 billion in combined gross gaming revenue as of 2021.
Massachusetts lacks tribal gaming at the time of publication, although this might change in the future. Residents can legally place pari-mutuel wagers on horse races or take part in lotteries and charitable gaming.
Legal wagering on sports is still unavailable here, so local bettors must travel to neighboring states such as New York and Connecticut to place their bets. Authorized sportsbooks could arrive in Massachusetts soon, with several bills pending in the Commonwealth. Online gambling, including poker, remains illegal for the time being in nearly all forms except daily fantasy sports.
Gambling Laws in Massachusetts
Massachusetts has a turbulent history with gambling, which makes sense given that it began as a Puritan colony where even dancing was frowned upon. The Massachusetts Bay General Court adopted an ordinance as early as 1631 that prohibited gambling, stating that “all persons whatsoever that have cards, dice, or tables in their houses shall do away with them […] under pain of punishment”.
While much has changed since then, those who engage in unauthorized gambling activities in the Bay State are still subject to punishment. The Massachusetts General Court has authorized various forms of gambling under license, including charitable gaming, horse race betting, and state-sanctioned lotteries, all of which are available in land-based form. Commercial casinos became legal under the Expanded Gaming Act of 2011. The Massachusetts General Laws contain various provisions related to gambling and the sanctions for its unauthorized provision.
Massachusetts General Laws
The Expanded Gaming Act of 2011Gambling Fees and Taxes in Massachusetts
The license fees for authorized Class 1 casino resorts in Massachusetts amount to at least $85 million. Gambling operators must make a capital investment of $500 million or more. Casino resorts are taxed at 25% of their gross gambling revenue. They pay an additional $600 annual fee for every gambling machine they operate on their premises. Gaming suppliers are subject to a $15,000 license fee, payable once every three years.
Plainridge Park Casino holds a Class 2 license, which allows it to operate a maximum of 1,250 slot machines. The license fee imposed on such facilities stands at $25 million, with a minimum capital investment requirement of $125 million. The slot parlor contributes 49% of its net gaming revenue in taxes.
Like the two casino resorts, the Plainridge Park facility is subject to annual fees of $600 for every slot machine it operates. All gross revenue taxes it pays go toward the Massachusetts General Local Aid Fund. Local towns and cities use this tax money to improve infrastructure and fund police and fire protection services. The casinos’ tax money is allocated as follows:
| Allocation of Tax Money Collected from Class 1 Licensees | |
|---|---|
| Debt Reduction | 10.00% |
| Transportation Infrastructure and Development Fund | 15.00% |
| Education Fund | 14.00% |
| Commonwealth Stabilization Fund | 10.00% |
| Community Mitigation Fund | 6.50% |
| Gaming Economic Development Fund | 9.50% |
| Local Capital Projects Fund | 4.50% |
| Public Health Trust Fund | 5.00% |
| Massachusetts Tourism Fund | 1.00% |
| Race Horse Development Fund | 2.50% |
| Massachusetts Cultural Council | 2.00% |
Winning players from Massachusetts are subject to a withholding tax rate of 5% under Section 3402 of the Internal Revenue Code. The withholding tax applies to gambling profits in excess of $600. Players may deduct gambling losses incurred at authorized casinos, but only up to the amount of their winnings.
Legal Status of Sports Betting in Massachusetts
Massachusetts has yet to join the ranks of states that permit wagering on professional and collegiate sports events. Sports betting remains illegal in the Commonwealth, with wagering on horse races being the only exception. Authorized racecourses can offer pari-mutuel betting on live horse races under Chapter 128A of the Massachusetts General Laws.
Most Recent Sports Betting Bills
Proposed License Types
Proposed License FeesOnline Gambling in Massachusetts
As you can probably tell by now, the Massachusetts gambling industry has yet to reach its full potential. The state has only three commercial gaming venues and no tribal-land casinos. Online gambling remains unauthorized in the Bay State for the time being. This prohibition covers nearly all forms of interactive gambling, from online casinos to poker and sports wagering.
Daily fantasy sports are the only exception to the overall ban, with DraftKings and FanDuel among the largest operators welcoming customers from Massachusetts. The Bay State was among the first in the country to authorize daily fantasy sports (DFS) under Session Law 2016, Chapter 219. Like regular gamblers, DFS players are subject to withholding taxes when their winnings exceed $600.
Residents who wish to wager online have two options. They can travel to a nearby state with regulated online gambling, such as Delaware or New Jersey, or join one of the offshore sites that serve US residents without authorization from Massachusetts authorities. The Massachusetts legislature has not adopted any technical measures to protect local players from unlicensed remote operators or to block access to such websites.
Who Regulates the Massachusetts Gambling Industry?
The 2011 Expanded Gaming Act led to the establishment of the Massachusetts Gaming Commission (MGC), which regulates authorized gambling operations in the Bay State. The MGC consists of five full-time members, each serving a five-year term with the possibility of reappointment. No commissioner may serve more than ten years in total.
The Commission monitors compliance with the Expanded Gaming Act and issues licenses to approved gambling operators. The Gaming Enforcement Division (GED), part of the Attorney General’s Office, is responsible for imposing sanctions for violations of state gambling laws. It conducts investigations into various gambling-related offenses, including money laundering and corruption.
Conclusion
The Massachusetts brick-and-mortar gambling industry has witnessed significant expansion during the past decade. The state now hosts two luxurious commercial casino resorts and a slot facility in Plainville with more than 1,200 slot machines, video poker, and other electronic gaming devices. State laws allow for the issuance of one additional commercial casino license, which remains unclaimed at the time of writing.
The Encore Boston Harbor, MGM Springfield, and Plainridge Park facilities have collectively contributed over $1 billion in tax revenue to the state. Online gambling remains unlawful for now, with daily fantasy sports the only exception to the general prohibition.
Even so, the situation is likely to improve. Legal sports wagering has received support from both Governor Charlie Baker and the House of Representatives. Only approval in the Senate is still required for residents to gain access to authorized online sportsbooks.