Massachusetts to Continue Taxing Promotional Play Revenue

The decision was confirmed on Tuesday and it will see the state’s regulator tax licensed entities for their extended promotional play. Some states have decided to make this metric deductible from the tax owed to the state, but the Bay State is making sure it is not.

Promotional Play Won’t Be Tax Deductible in Massachusetts

There are different reasons why this is the case – for one Massachusetts wants to make sure that sportsbooks do not inundate the market with too many sports betting offers that are constantly pushed in the face of consumers.

Secondly, the regulator is convinced that such gains ought to be taxed properly as they are de facto a real business activity that should be treated as such. The decision by the MGC is not taken in a vacuum either. The regulator convened to assess data from other states and examined specific costs and benefits of promotional play and deductions.

Ultimately, the regulator voted with a full majority on the matter 5-0 and decided that such deductions were not necessary in Massachusetts. Another reason stated by the regulator is that the original intent of legislators was to have promotional play included as a taxable part of an operator’s revenue.

Making sure that promotional play is taxed, though, is not a bad thing. If anything, by settling the speculation around it, operators now have a clear idea of what to expect and how to treat their promotional play. Evidently, it’s not ideal not to have the ability to promote more aggressively, but at least operators will now know how much they can allocate to bonus inducements and free play.

Fines, Safer Gambling, and More

Another thing to consider is that the MGC did not really receive negative feedback about its plan to ensure that bonus play is now treated as a taxable item on the operators’ list.

At the same time, the regulator used the Tuesday meeting to go over some other issues, including several fines. MGM Springfield and DraftKings were both on the receiving end of regulatory ire.

Meanwhile, the regulator also agreed to extend the additional time to companies in the state which are trying to catch up and implement advanced software that will allow them to better protect consumers. These new tech solutions are designed to help consumers control their gambling habits, better alert operators to potential problem gambling cases, and more.

Operators requested additional time to be able to fully implement the tech and make sure that it works as intended. The MGC has granted this request on the basis that it was a reasonable and meaningful thing to ask.