Massachusetts Gaming Commission: Single Omnibus Bill May Be Best Path Forward For Online Gambling

The Massachusetts Gaming Commission (MGC) may not make policy, but it can make recommendations to the legislature, which it has done since its formation in 2012, following the passage of the Expanded Gaming Act in 2011.

During the past two years, it has overtly indicated that the right path forward for Massachusetts is to legalize and regulate online poker and casino, online lottery, daily fantasy sports, and perhaps even esports and social casinos all in one fell swoop.

It wants to do this in a manner that allows the agency overseeing these products (likely to be the MGC in most cases) to handle the ever-evolving online gambling landscape.

Comments at the December 2015 DFS hearing

The first hints of an omnibus approach to online gambling came in late 2015, spurred on by the DFS debate that was being argued in statehouses across the country.

“Would it make sense for the Legislature to try to craft an omnibus regulatory bill for all of these new electronic gaming technologies – because there’s so many of them?” Massachusetts Gaming Commission Chairman Stephen Crosby asked reporters following a December 2015 DFS hearing.

Also from Crosby:

“If they could craft a bill, which incorporated regulatory priorities, fundamental values, whatever, that could be applied to all of these games – e-sports, [daily fantasy sports], online poker, whatever all the new ones are – maybe then they could give it to some agency to implement, and the agency does the grunt work every six months making it apply to whatever the new technology is.”

The legislature didn’t craft an omnibus bill this year, but it did call for a panel to study DFS and online gambling.

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Comments at September 2016 open meeting

During an open meeting on Sept. 8, the MGC voted 4-0 (Chairman Crosby abstained from the vote) to appoint Crosby as the commission’s representative on the panel that will study online gambling and daily fantasy sports.

“Hopefully, this will be an opportunity for us to continue…the initiative that we’ve made about trying to come up with some omnibus legislation that will give the Legislature and then probably the Gaming Commission the tools to regulate all of online gaming,” Crosby said at the meeting, adding that this type of omnibus approach hasn’t happened in any other state to this point.

The study panel

The panel will be led by the chairs of the Joint Committee on Economic Development and Emerging Technologies:

• State Senator Eileen Donoghue
• State Representative Joseph Wagner

In addition to Crosby, Governor Charlie Baker and Attorney General Maura Healey will each appoint a representative. Rounding out the panel will be appointments made by:

• Senate President Stan Rosenberg;
• Senate Minority Leader Bruce Tarr;
• House Speaker Robert DeLeo; and
• House Minority Leader Brad Jones.

The first meeting must take place before Nov. 1, and the panel will have until July 31, 2017 to submit its findings and recommendations on a variety of factors, including taxation, consumer protections, and the positive and negative economic impacts for the state and current gambling products (lottery and casinos).

Interestingly, the panel will not offer any input on online lottery sales. A bill that would have legalized online lottery sales in Massachusetts gained some steam as the 2016 session was winding down, but fell short of passing.

Online lottery sales is a topic expected to be broached again in 2017, which may explain why online lottery was decoupled from the panel’s deep dive into online gambling and DFS.

Why omnibus?

As Crosby noted at the Sept. 8 meeting, even though the regulations required to oversee DFS, online casinos, and online poker games are near-carbon copies of one another, to this point, other states have been taking a piecemeal approach to online gambling:

• Georgia, Illinois, Michigan, and Kentucky have online lottery.
• New Jersey and Delaware legalized online gambling (poker and casino).
• Nevada legalized online poker.
• Colorado, Kansas, Missouri, Mississippi, Tennessee, Virginia, New York, Indiana, and Massachusetts  — placeholder bill that requires operators to abide by AG’s regulations — have passed DFS legislation.

One thing becomes abundantly clear when you browse the above lists; there is no overlap. A closer look also reveals a number of these states are considering more online gambling expansion, something they could have handled when they legalized their current online gambling products.

What Massachusetts wants to do is take care of all of these online gambling verticals once and for all, and not fall into a never-ending cycle of debating what amounts to the same thing (just by a different name) year-after-year.

Whether it’s online poker, DFS, or some other product, the reasons for legalization and regulation are generally the same:

• Create tax revenue;
• provide consumer protections; and
• bolster the land based casino industry and/or lottery.

The regulations themselves will also look quite similar:

• age and identity verification procedures;
• following anti-money laundering procedures;
• creating responsible gaming policies; and
• demanding third party audits and verification of fund segregation.

The MGC sees these obvious parallels, and wants to avoid the piecemeal approach that will bog down legislatures and state regulatory bodies with redundant hearings and debates for years.

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