Massachusetts Eyes Major Shake-Up for Online Sports Betting

A newly resurfaced proposal in Massachusetts could completely change the way online sports betting works in the state, and it’s not subtle. 

Tax Hike and VIP Programs Take Center Stage

Senate Bill 302 aims to sharply increase taxes while limiting what people can bet on, and imposing new sets of rules that would change the way operators interact with their customers.

Backed by Sen. John Keenan, the legislation was originally filed early last year and had a hearing, but never made it to the voting stage. 

The bill has now made it into the 2026 legislative session, with a reporting deadline extended to March 6. Keenan has been outspoken about his change of heart, saying last fall that he regretted voting to legalize sports betting in 2022. 

Online platforms have been operating in Massachusetts since March 2023.

At the center of the proposal is a major tax hike. The bill would raise the online sports betting tax rate from 20% to 51%, a measure that would place the Bay State next to New York, which set its 51% rate when it legalized online betting in 2021. 

Illinois is another state that sits the high end with a complex list of taxes that push the rate above 50% for large operators. Massachusetts, by contrast, is currently viewed by the industry as a relatively reasonable market.

The bill also takes aim at VIP programs. These loyalty setups typically pair high-volume bettors with dedicated hosts, sometimes with compensation tied to customer activity. 

Under the proposed language, “(l) Operators, directors, officers, owners, employees, affiliates and subcontractors of the operator or sports wagering operator shall receive no compensation for any percentage of wagers or deposits placed by a customer of the operator or sports wagering operator.” 

In practice, that would translate to the VIP host model coming to an end.

Vanishing Bets on the Line 

Several types of bets would also disappear. In-play wagering and proposition bets would be removed from the list of allowed wagers. 

The state already bans prop bets involving Massachusetts college athletes. Similar efforts to limit or ban prop and in-game betting have been introduced in states like New Jersey and New York, and both the NCAA and NFL have urged lawmakers to scale back those markets.

Beyond betting options, the bill introduces a range of new oversight measures. Among them, requiring operators to conduct affordability checks on customers who wager $1,000 in a single day or $10,000 in a month. 

Bets at that level would only be allowed if they “do not exceed 15 per cent of the amount said person has available in bank account.” The proposal would also bar agents and promoters from betting on platforms they are connected to.

Additional provisions include doubling the annual payment to the Sports Wagering Control Fund to $2 million, expanding research into links between sports betting and serious harms such as suicide and self-harm, and requiring operators to hand over anonymized customer tracking data for state research. Finally, advertising rules around promotions would be tightened further as well.