MA regulators opt to ban sportsbook promo credit deductions

Tax deductible written on a postit clipped to a spreadsheet
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Massachusetts regulators voted to tax sports betting promotional credit on Tuesday after several months of debating and researching the issue. The Massachusetts Gaming Commission (MGC) had a rare moment of disagreement earlier this year when two commissioners believed that the way the law was written required promotional credit be taxed while the other three thought it was up to the commission to make such a decision.

That argument was moot after the group heard from MGC Director of Research and Responsible Gambling Mark Vander Linden, MGC Chief Financial and Administrative Officer Derek Lennon, and outside counsel RSM on the financial impact of the choice. The three commissioners who believed the ball was in their court regarding the decision all agreed that an approach where promotional credit was taxed was in the best interest of the state.

Commissioner Bradford Hill initially was the person advocating for promotional credit deductions, arguing that these kinds of breaks were common in other industries and served to help bring and keep business in the Commonwealth. However, he said Tuesday that, upon learning this could impact responsible gambling funding, he was ready to move forward without the tax break.

Hill also said that none of the operators in the state approached the commissioners about the rule asking for promotional credit deductions so, in his mind, this was not something the operators were keen on securing.

Commissioner Eileen O’Brien used time during the meeting to point out that several legislators reached out to commissioners to note that the intent of the bill was to prohibit promotional credit and, while some commissioners disagreed, the law did not intend for the MGC to make such a decision.

While promotional credit deductions were commonplace among the first rush of states to legalize sports betting, many of those states are now walking back or tiering the level of deductions as the market ages. Kentucky, one of the only states to legalize sports betting this year, opted to not allow for promotional credit deductions either.