Massachusetts Gaming Commission investigates temporary license for sports betting Quagmire

Major sportsbooks presented to the MGC today to discuss the issues of temporary sports betting licenses and the issue of staggered versus universal launch dates — with operators differing in their views on how the Bay State should proceed.

Today’s public meeting of the Massachusetts Gaming Commission (MGC) produced a lot of light — but little heat — on the thorny issue of temporary licenses and the no less troubling issue of a staggered versus universal launch date for sports betting in Massachusetts.

As revealed at the MGC’s previous (September 15) meeting, there was a flaw in the legislation passed on August 1 that legalized sports betting in Massachusetts. This meant that there was no limit to the number of temporary licenses for online sports betting that the commission could issue to untethered operators.

This means that those sportsbooks launched under temporary licensure in the Bay State could subsequently be forced to close, if their licenses are revoked within a year or less, depending on whether they make the final seven cuts after the MGC completes the vetting process. .

This, of course, gave the commissioners pause over what would be the fate of gamblers who still have account balances and who may have bets pending on future sporting events on the day their sportsbook apps are deactivated. How would the books compensate or otherwise make whole their left in limbo?

This was the first of two main questions MGC Chairman Cathy Judd-Stein raised at the start of the meeting. The second was the critical issue of a staggered versus universal (i.e. single) launch date for the rollout of both online and retail legal sports betting across the Commonwealth.

Majority of license applicants prefer universal launch

The committee saw prospective license applicants give presentations that focused more on the start date question, although some operators provided limited insight into the implications of license withdrawal.

The launch timeline is important for the respective sportsbook rollout strategies, with eight mobile licenses linked (which partnered with the state’s three casinos and two simulcast facilities) available, and seven untethered/standalone licenses available for: online operators.

Accordingly, the MGC gave each of the license applicants five minutes to argue their case.

Cory Fox, Vice President of Product and New Market Compliance for FanDuel, the leading US operator by market share, gave a mixed picture of temporary licenses.

He stated that he did not believe it was an “effective use of resources” to offer more temporary licenses than what the final result will be, given the financial investment that will be made (both by the operator and the MGC) to to launch it. temporary books, but he acknowledged that they would get the state off the ground.

“We see the commission’s ability to issue temporary licenses as a way to accelerate the launch of the operators already selected through a competitive process,” said Fox. “The temporary licenses will allow the commission to launch sports betting while the commission is finalizing its operator suitability assessment in preparation for issuing a full license.”

Danny Miller, the Director of Compliance at MGM Springfield Casino, expressed BetMGM’s concern that a “transparent timeline and firm launch date should be communicated to the public” and that operators should be provided with a timeline of all “critical milestones” they would need to meet. at. BetMGM also took a tough stance on the idea that operators granted temporary licenses could be subjected to “dismantling” their operations – which Miller said would be “unprecedented”.

Bally’s Corporation’s legal counsel, Justin Smith, stated that his Bally Bet was opposed to the “implementation of a temporary licensing arrangement”, arguing that any potential shutdown would be difficult to manage as many customers bet “months in advance”. His implication was that no sportsbook could anticipate when its license might be terminated by the MGC — and would be expected to adjust its operations accordingly.

Smith further believed that Bally’s believes operators should be able to launch their apps when “they are ready”, rather than waiting for a future launch date, and suggested that the committee set a “specific launch date that would allow accountability to explains the operations”. to meet that date.

The DraftKings representative initially played to the home crowd in his comments, reminding commissioners that the operator is headquartered in Boston and has approximately 1,500 employees in the state.

Chris Cipolla, Senior Director, Legal and Government Affairs for DraftKings, pleaded for temporary permits.

“All operators, whether online or mobile untethered, should be given the opportunity to launch on Day 1, so that no one gains an unfair competitive advantage,” Cipolla said. “We believe that if we give everyone a fair chance to launch, we should give operators a fixed launch date.”

DraftKings, FanDuel double after presentations

During the Q&A period following the applicant presentations, Cipolla reiterated the sportsbook’s stance that a universal start date is the best solution.

“It’s important to put mobile operators on the same footing…the overwhelming amount of sports betting is on mobile,” Cipolla said. “We think there are roadmaps for Massachusetts to go live in all categories simultaneously.”

He added that DraftKings believes the Commonwealth can launch retail and mobile at the same time, mirroring its recent Kansas launch, and concluded his comments by again referencing the status of DraftKings’ favorite son.

“We stay true to our Massachusetts roots and we look at this from a unique perspective compared to other potential applicants,” Cipolla added.

The Q&A portion of the public meeting came to an interesting end when FanDuel’s Fox made the most compelling case against issuing temporary licenses – especially regarding the ability to grant licenses in excess of the maximum number that can ultimately be granted on a long term basis.

“Frankly, for FanDuel, the investment we make in a state in the first year is meant to pay off over a number of years, so from a business model perspective, it’s really challenging for us to invest in a state that doesn’t know or we’ll be able to continue working there for the past year or even shorter.”

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