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Casinos, DraftKings Voice Differing Views on Legalizing Sports Betting

The Baker administration suggests wagering on sports events could bring in an estimated $35 million annually in revenue

Gambling companies are voicing differing views on how best to regulate sports betting as state lawmakers hold hearings on legalizing the industry in Massachusetts.

Boston-based DraftKings, which has emerged as a major player in the national sports gambling landscape, said in testimony Tuesday that it wants the state to allow it and other online operators to offer sports bets outright.

But the state's three casinos — MGM Springfield, Encore Boston Harbor and Plainridge Park — say they want lawmakers to require online operators to partner with an established casino to get into the sports wagering business.

They argued in their written testimony that limiting the number of companies offering sports wagering would give customers the best odds at winning big while also putting the games squarely in the hands of a casino industry that's already highly regulated and made major investments in the state in the form of multimillion-dollar facilities employing thousands of residents.

DraftKings CEO Jason Robbins said states that have set limits on online sports wagering have done so to their detriment, with revenue and tax projections falling below expectations.

"DraftKings and our competitors should have a direct relationship with the regulator_and that means being directly accountable to the regulatory authority, the legislature, and ultimately, the residents of Massachusetts," he said in testimony submitted to the legislature's Joint Committee on Economic Development and Emerging Technologies.

Professional sports leagues, meanwhile, are seeking compensation for the potential impacts of gambling on their industry.

Representatives from Major League Baseball and the National Basketball Association told lawmakers they support proposals requiring sports betting operators pay the leagues a royalty fee of about 0.25% of their sports betting revenues.

The sports leagues also want the ability to work with regulators to address bets that could open the door for abuse or corruption, such who commits first foul in a basketball game or if the first pitch of an inning is a ball or a strike.

Tuesday's hearing was the first of two this week focused on nine bills submitted to legalize sports wagering. The next hearing is Wednesday.

Gov. Charlie Baker has proposed legislation that would authorize the state's Gaming Commission to license companies to offer sports bets. It doesn't require online operators to partner with a casino to seek a sports betting license, however.

Baker's bill also wouldn't allow betting on high school, college or amateur events or esports, even though the casino companies argued in their testimony for allowing for college sports bets.

The casinos also urged lawmakers to impose the lowest tax rate possible. Tax rates in states that currently allow sports betting range from Nevada's 6.75% to Rhode Island's 51%, they said.

Baker's bill would impose a 10% tax on sports bets made inside casinos and a 12.5% tax on bets placed online, including on daily fantasy sports contests like those currently offered by DraftKings. It would also require a $100,000 application fee for an initial sports betting license that would have to be renewed every five years for a fee.

Copyright AP - Associated Press
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