Last time around in Maine, the powers that be managed to kill a bill to legalize sports wagering that the legislature sent to Gov. Janet Mills. This time around, while time and a pandemic have changed the landscape, pretty much the same bill to open a competitive marketplace is back on the table.
But while legal sports betting expands nationwide and so do state budget woes, it’s unclear if the same fate awaits the measure. Sports betting will once again be sponsored by Sen. Louis Luchini, who filed ahead of a special session that will convene on April 28.
In June 2019, the only two casino operators in Maine, Penn National Gaming (PNG) and Churchill Downs Inc., determined that having no legal sports betting would be preferable to an open market where casinos did not act as the license gatekeepers. In other words, the companies wanted full control of which sportsbooks got licenses to go online in the state.
Luchini’s LD 553 in 2019 would have allowed casinos, commercial racetracks, certain off-track betting facilities, slot machine facilities, and federally recognized Indian tribes, as well as “qualified gaming entities,” to apply for a license. It sanctioned pretty much all comers fit to run a sportsbook in another state or in general.
“Sen. Luchini’s bill is nearly identical to the one that garnered bipartisan support from two-thirds of the Maine Senate and the majority of the Maine House last session before Gov. Mills vetoed it,” the chairman of the Maine Gambling Control Board, Steve Silver, an attorney in Portland, Maine, told Sports Handle Wednesday. “The bill is a straightforward, free-market approach with a sensible licensing and taxation structure.
“The need for new, online gaming revenue is even more critical during the pandemic. I get the sense that Mainers are frustrated reading daily headlines about state budget woes when next door in New Hampshire they are raking in about $1 million per month in new tax revenue from sports betting.”
Last time around and this time around
It is a poorly kept secret that the casino lobby, i.e. PNG and Churchill, were the driving force behind Mills’ veto in 2020. Luchini’s bill had broad support from both Republican and Democratic lawmakers and their constituencies.
In issuing the veto on Jan. 10, 2020, Mills wrote:
I respect the long hours and hard work that the Committee on Veterans and Legal Affairs put into this bill following its submission as a concept draft and the number of work sessions in which the Committee tried to combine the best of several bills on this difficult subject matter. And I believe this bill is a good effort by those who wish to bring out into the open a black market activity that is practiced by many now and who want to regulate that activity without over-regulating or overtaxing it so as to drive it back underground. The bill is a step forward towards achieving that delicate balance.
But, respectfully, I remain unconvinced at this time that the majority of Maine people are ready to legalize, support, endorse and promote betting on competitive athletic events.
In early 2020, a bid to override Mills’ veto nearly succeeded. The Senate voted 20-10, but the House, at 85-57, came up short of the two-thirds threshold required to override.
Weeks earlier, New Hampshire had launched legal sports wagering in partnership with DraftKings. Since then, more states across the country including Michigan and Virginia have proven that legal sports wagering is popular and can be a decent source of state revenue that doesn’t require the imposition of a new direct tax on citizens.
Penn National in 2020 launched its flagship sports wagering platform — Barstool Sportsbook — in several states, and the number will grow this year. Given its business model premised on brand-driven, lower customer acquisition costs, it’s possible PNG’s opposition to an open market will soften. With the closure of the Scarborough Downs race track in November 2020, there’s also now one less competitor for PNG. Overall, PNG should have confidence in Barstool Sportsbook as it fortifies its position as one of the more popular and profitable sportsbooks.
Here are headwinds
A major sticking point may be the language in the bill permitting federally recognized tribes as well as a “qualified gaming entity” to enter the market. Under the bill, the initial license fee is $20,000, among the lowest in the nation, which opens up opportunity for lots of competition.
The criteria for qualified gaming entities is basically broad reciprocity for any mobile sportsbook legally operating in any U.S. jurisdiction, according to that locale’s regulatory structure.
Gov. Mills’ office has also declared resistance to a new bill, L.D. 554, An Act to Create Gaming Equity and Fairness for the Native American Tribes in Maine. In a letter dated March 17 to Luchini and Rep. Chris Caiazzo, Mills’ deputy legal counsel referenced her 2020 veto of the sports gambling bill, pointing to the governor’s “concerns about whether Maine people” are comfortable with expanded legalized gambling opportunities, and questioned the proposed regulatory structure as well.
It seems that the casino lobby has girded itself once again, but perhaps PNG, given its increasingly strong position nationally, will be open to allowing others to pull up a barstool.
“The only winners from Maine continuing to sit on the sidelines are unregulated offshore sites and neighborhood bookies,” said Silver. “Perhaps seeing the success New Hampshire has had combined with the reality check caused by COVID will lead to a different result this time around.”