global Tax Massachusetts Legalizes Sports Betting in 2023 January 20, 2023 Attention sports fans…sports betting is set to become legal in the Bay State on January 31, 2023. How are wagers taxed? We explore here. Massachusetts lawmakers approved a measure in August 2022 that will legalize sports betting as of January 31, ahead of the Super Bowl on February 12, 2023. We have the details here. More about the bill MA Governor Charlie Baker signed a bill in August that legalizes sports betting. The Bay State is the 36th state in the U.S. to sign legislation on sports betting. So, who can bet? Anyone 21 years or older can bet on sports in MA. Are there limits to what you can bet on? You can bet on professional and (most) collegiate sports, along with e-sports. You are not allowed to bet on in-state college teams unless they are playing in a tournament. Additionally, there is no betting allowed on high school or youth sports. So, you cannot bet on any regular season Northeastern University basketball games, for example, but if they play in March Madness or conference tournament, you can bet on those games. How are wagers taxed? In person betting will be assessed an excise tax of 15% (20% for mobile betting). This excise tax is paid by the “sportsbooks”, not the consumers. Individuals will need to report and pay taxes on their winnings from sports betting in the same manner as they pay taxes on other gambling winnings. Generally, winnings are taxed at your ordinary income tax rate and losses are only deductible if you itemize deductions. In Massachusetts, gambling losses may be deductible, but under current law only if incurred from specific sources (such as in-state casinos, racetracks or simulcast facilities licensed under chapter 23K of state law). Massachusetts lawmakers expect to generate over $60 million in annual tax revenue due to this change. Questions? Contact us.
