Report: Small size of Mass. sports betting industry limiting opportunities for minorities, women, and veterans
PHOTO | Peter Glaser, CC0, via Wikimedia Commons
A new report that UMass Amherst researchers presented to the Massachusetts Gaming Commission claims the small size of the sports wagering industry in Massachusetts limits the number of diversity initiatives and policies at both employee and vendor levels.
The small size of the sports wagering industry in Massachusetts limits the number of diversity initiatives and policies at both employee and vendor levels, according to a new report that UMass Amherst researchers presented to the Massachusetts Gaming Commission.
The report sheds light on the participation of minorities, women and veteran business enterprises within the state sports wagering industry. It's the second report required under the 2022 law legalizing sports wagering and follows one that looked at the feasibility of sports wagering kiosks, the commission said Tuesday.
Sports wagering in Massachusetts is a relatively small industry in terms of employment and vendor spending in the state, the report found. While the national industry compares well to similar industries in terms of diversity and average compensation, the industry is comparatively less diverse within Massachusetts.
"All operators have programs and policies in place to some extent. None of them are particularly notable or have standardized metrics or targets," Dr. Mark Melnik, director of economic and public policy research at the UMass Donahue Institute, told the commission Tuesday.
Rachel Volberg, president of Gemini Research, and Melnik are principal researchers for the Social and Economic Impacts of Gambling in Massachusetts (SEIGMA), a research project looking at the economic and social impacts of introducing casino gambling in the Bay State.
"The primary barrier to contracting with diverse vendors is the limited number of significant purchases, which beyond advertising and marketing tend to be specialized and sole-sourced," Melnik said.
Operators interviewed for the study suggested that vendor spending was generally limited to a few specialized companies, and that there wasn't much opportunity to diversify spending, Melnik said.
"Popular perceptions of the industry tend to skew towards younger segments of the population and white males. And some of the observations from folks in interviews theorized that this was harming recruitment and retention for diverse employees," Melnik continued.
The certification processes to become a diverse-owned company in Massachusetts and a licensed MGC vendor contribute to barriers to diversification, according to the report. "This is an issue that we've heard many times, when we've been studying different elements of diverse procurement in the state, is that the process to be a certified supplier diversity business can be difficult especially for a small business," Melnik added.
Melnik flagged the significantly more minority and women workers working in the sector than veteran workers, as well as the compensation difference between mobile and retail wagering.
"I think it speaks a little bit to the ways in which a casino is actually quite different than online betting," Melnick said.
"Unsurprisingly, the retail sector wages look quite a bit like the wages that we would see for folks who worked at a casino — because these are people who are working at a casino. But on the mobile side of things, though, what we're really looking at is a technology company. So a lot of the wages we're seeing here are quite elevated and are more in the space of IT or other forms of computer platforms," he continued.
While a significant portion of the sports wagering industry in Massachusetts comes from diverse backgrounds, rates don't meet those of similar industries in the state for mobile and retail operators, according to the report, the recommendations of which spanned across vendors, the commission and state government.
Melnik said an "excellent opportunity" for diversification within vendor spending would be around advertising and marketing.
The report suggested that developing workforce diversity goals and standardized metrics for mobile sports wagering operators, casino programs and policies could help reach workforce diversity goals. Researchers recommended operators create strategies and measurable targets to increase participation of diverse vendors, alongside partnering with the Massachusetts Supplier Diversity Office.
Directing sports wagering tax revenue towards workforce development and organizations, programs and initiatives that support diverse-owned businesses were among recommendations for the state. Pointing to the challenges of certification, using the sports wagering taxes to create a permanent funding stream for small business development technical assistance could also help reduce barriers to entry, Melnik said.
The report recommended that the commission create and maintain a marketing directory to provide "broader exposure" for businesses with relationships to the industry, including those that have diverse ownership.
Commissioner Nakisha Skinner said the commission recently undertook a diversity audit of its Category 1 licensees.
"I've seen some overlap in the findings that you have presented to us with respect to the difficulty that businesses experience in getting certified, for instance," Skinner said. "And so we have developed a subgroup to dig into those findings a little in a little bit more detail."
"We're going to be bringing forward, in the near future, some recommendations that are designed to assist in that vein. These recommendations that are coming forward are focused on the Category 1 licensees, but I think if adopted by the Commission, ultimately, it's the diverse business vendors who stand to benefit from some of the changes we are going to be proposing made there."
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