Our Opinion: Tax fantasy sports, online gambling

As the state Legislature rushed to the July 31 finish line with all kinds of business still to be attended to, one of the measures that got lost in the last minute crunch was a bill to tax fantasy sports. That failure doesn't bode well for the Legislature's much larger challenge in the next session — reacting to a U.S. Supreme Court decision clearing the way for legalized sports betting in the states.

Even though a joint legislative committee spent two years studying the issue, the Legislature couldn't agree on a bill levying taxes on fantasy sports betting by the deadline. A Senate measure applying a 12.5 percent tax that could have raised an estimated $2 million in revenue annually, according to the Boston Globe, did not get House approval, even though there is support for such a tax in that body as well. Fantasy sports taxes in most states are 15 percent.

The Legislature did find time this summer to pass a measure permanently legalizing daily fantasy sports in the state. Boston-based Draft Kings, a fantasy sports industry heavyweight, lobbied for the legalization and against the tax, arguing that fantasy sports is a game of skill, not a game of chance. A small minority of upper echelon fantasy sports players actually make a good living at it, but the vast majority of players are enthusiasts, not experts, and rely on good fortune to win a few dollars.

The Supreme Court's legalization of sports betting across the nation is expected to unleash a flood of dollars that will dwarf that generated by fantasy sports. Draft Kings has moved aggressively to target this market, becoming the first in the business to roll out on an online gambling program in New Jersey, which quickly legalized sports betting in an apparent effort to compensate for state revenue lost to the decline of the state's casino industry. Draft Kings will assuredly want to start an online gambling game in Massachusetts.

The Eagle long opposed the introduction of casino gambling in Massachusetts but that Pandora's Box is now fully open. Casinos are springing up around New England and the Northeast (MGM opens its casino in Springfield Aug. 24) and some are sure to be empty husks at some point, like their older counterparts in Atlantic City. Online gambling will create further competition for gambling dollars.

Draft Kings will lobby Beacon Hill for every break it can get, which is its right, but lawmakers must assure that revenue from fantasy sports and on line gambling finds its way into state coffers to help finance education, health care and other needed programs. That is a task that should start in the fall, and it cannot succumb to inertia, indecision or squabbles between the House and Senate.


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