Massachusetts still to set sports betting launch date as operators debate temporary licenses, tiered rollout

Massachusetts regulators heard mixed views from sports betting operators on whether to start retail and mobile wagering at the same time at a Thursday meeting. Additionally, companies were also split on the use of temporary licenses. The hearing came as the Massachusetts Gaming Commission works out regulatory details ahead of launch, for which there is no set date yet.

In regards to whether it would be OK to launch in-person sports betting before mobile wagering goes live, nearly every operator backed the plan with the exception of Boston-based DraftKings, reports NBC Boston. The sports betting giant said it would rather see all operators go live on the same universal start date.

The issue came up as the Gaming Commission works on implementing legal sports without unnecessary delay, but without sacrificing its commitment to consumer protection. However, these efforts have been complicated to carry out thus far, with regulators running into a set of significant hurdles since Gov. Charlie Baker signed the state’s betting law six weeks ago.

Gov. Charlie Baker

Thursday’s roundtable at the State House featured a who’s who of the US online sports betting industry, from household names like FanDuel to new startups like influencer Jake Pauls’ Betr. Stakeholders were also split on the use of temporary licenses, which were pitched as a way to quickly stand up the industry, as regulators cautioned they come with many challenges.

While DraftKings Government Affairs Senior Director Chris Cipolla said temporary licenses would ensure “that everybody is given a fair shake,” helping to maintain parity across all categories, Cory Fox, Vice President for Product and New Marker Development at FanDuel argued against the plan, reports MassLive.

Fox said a successful sports wagering launch requires companies to invest significant time and resources into a “customized product,” and argued offering more temporary licenses than the final count would be counterproductive if operators may be asked to shut down later on. However, he said temporary permits could be used to expedite the launch of online operators who are later selected for one of seven untethered licenses.

As for the commission, it is currently wrestling with the concept of temporary licenses, said Chair Cathy Judd-Stein. These can be granted under the state’s sports betting law at a $1 million fee for one year or until a final determination on a license application is made. Said law also spells out three categories of licenses, with the third one allowing for seven digital companies that are not connected to brick-and-mortar operations in the state.

However, there is no limit on how many temporary licenses can be issued, which industry players have suggested could lead to a situation where they begin offering mobile sports gaming on a provisional basis just to shut down later on if not selected for one of the seven permits. Judd-Stein said that possibility was “an inadvertent development” on the part of the Legislature when they were crafting the final sports wagering bill over the summer.

Some companies at Thursday’s meeting said that, depending on how long the temporary licensees are allowed to remain operating, they could potentially not be able to recoup the money spent on setting up. Among parties opposing the plan was BetFred, while Betr, a newcomer in the gaming space, said the company supports temporary licensure and that it is “simply looking for equal footing amongst operators” in terms of having an opportunity to launch.

While operators were not in total agreement on anything, regulators picked up on the fact that nearly all said they would agree to an approach in which the commission would get in-person betting up and running before mobile wagering, said NBC-Boston. DraftKings’ only objection came as the company believes a same-day launch would be the “most equitable” option.

Commissioners have already said they think it makes sense to launch retail first, with all prospective retail betting licensees being in agreement around the idea of one common start date for all in-person betting. That being said, the commission did not take any action or make any formal decisions Thursday, with a potential launch date still to be announced.