Modern regulation and taxation could unlock $30 million+ in new state revenue while strengthening consumer protections
WASHINGTON, DC – The Social Gaming Leadership Alliance (SGLA) today testified before the Massachusetts Joint Committee on Economic Development and Emerging Technologies regarding H.4431, a bill containing provisions that would ban Social Plus games in the Commonwealth.
Online social games with sweepstakes promotions, or Social Plus games, are a mainstream digital entertainment category that deliver interactive board, card and casino-style games to millions of Americans. Platforms provide free-to-play experiences with optional in-game purchases to enhance and extend gameplay, and the addition of opportunities to win prizes of value through sweepstakes promotions. Social Plus games are always free to play, and include alternative methods of entry so that no purchase is ever necessary to participate in the sweepstakes, in compliance with Massachusetts consumer protection laws.
In his testimony, Sean Ostrow, Managing Director of SGLA, urged the Committee to consider an alternative approach that would pay dividends to the Commonwealth for years to come by regulating and taxing Social Plus games. Allowing this thriving industry to continue will generate new revenue for the Bay State and codify the consumer protections that SGLA partners already voluntarily employ, like requiring players to be 21 or older, employing best-in-class identity verification practices, protecting consumer data and privacy, providing clear and truthful advertising targeted to adults, providing responsible social gaming resources and more.
Additionally, voters are opposed to a ban. A recent nationwide survey by Seven Letter Insight found that 84% of U.S. voters support modernizing laws to regulate and tax online Social Plus games. Only 8% believe the games should be banned, and just 4% say this issue should be a priority compared to concerns like inflation, health care, and housing.
While the Commonwealth does not currently tax the sale of digital goods, economic modeling from leading industry research firm Eilers & Krejcik projects that a purpose-built sales tax at the current state income tax rate of 6.25% would generate $25.6 million or more in annual tax revenue for Massachusetts. With the addition of registration fees, modern regulation could unlock more than $30 million in new annual revenue, all while enhancing consumer protections and supporting Massachusetts-based businesses.
“The SGLA stands behind strong regulation and consumer protection, responsible social gameplay for adults only, fair taxation, and enabling economic development here in the Commonwealth,” said Ostrow. “We look forward to working with members of this committee to achieve these mutually beneficial outcomes.”
To learn more about SGLA, please visit our website at www.SGLeadership.org and our social channels at LinkedIn, X, and Facebook.
Contact
Laurie Rossbach
Partner, Seven Letter
202.258.7810
Laurie@SevenLetter.com
About the Social Gaming Leadership Alliance
The Social Gaming Leadership Alliance (SGLA) champions social gaming operators who offer innovative, free-to-play entertainment experiences enjoyed by millions of Americans while promoting responsible digital entertainment. Our partners set the standard for innovation, world class games and the responsible use of digital marketing including sweepstakes promotions. We advocate for appropriate oversight that recognizes the unique entertainment value of Social Plus games, protects players, platforms and the community, and promotes responsible gameplay.
The SGLA’s operator partners are VGW, PLAYSTUDIOS, Yellow Social Interactive, ARB Interactive and B-Two Operations, representing Chumba Casino, Luckyland Slots, Global Poker, Pulsz, Pulsz Bingo, Modo Casino, McLuck, HelloMillions and SpinBlitz. Other partners include major payments provider Nuvei. The SGLA’s advocacy and standards focus exclusively on Social Plus games. Our advocacy does not extend to operators offering sports products or transacting in cryptocurrency.
