Nearly two years ago, Maine lawmakers crafted a bill that would have made the state a first mover in New England and created one of the most open, competitive sports betting marketplaces at that time. Gov. Janet Mills let the bill languish on her desk until the tail end of the legislative session and then vetoed it in January 2020, saying, “I remain unconvinced at this time that the majority of Maine people are ready to legalize, support, endorse and promote betting on competitive athletic event.”
Lawmakers tried, but failed, to mount enough votes for an override.
On April 30, Sen. Louis Luchini — sponsor of the failed 2019 bill — started anew, leading a discussion on four sports betting bills in the Maine Joint Veterans and Legal Affairs Committee. His goal will be to create legislation that is either amenable to Mills or veto-proof, according to sources. The April 30 session was a prelude to a not-yet-scheduled work session during which details of the bill will be hammered out.
“It’s no longer a debate about whether to legalize or not,” Steve Silver, a Maine gaming attorney who was recently selected as the chairman of the Maine Gambling Board, told Sports Handle. “It’s about how to legalize so all the stakeholders and governor are on board.”
To tether or not, that is the question
To that end, committee members heard from stakeholders advocating both for and against tethering sports betting platforms to existing gaming venues — Churchill Downs and Penn National Gaming both have retail interests in the state — as well as from the NFL, which asked for an official league data mandate, and several OTB owners looking for a piece of the action. Lawmakers also discussed adding more guardrails around problem gambling to the bill, likely in an effort to appease Mills, whose biggest concern seems to be that legal sports betting will turn state residents into sports gambling addicts.
Jeff Morris, the vice president for public affairs and governmental relations at Penn National, argued against the official league data mandate and for the tethering of digital sportsbook platforms to existing casinos. His company owns the Hollywood Casino in Bangor.
“We also believe that it is critical that the operation of retail and mobile sports betting be limited to existing licensed gaming operators, who have invested hundreds of millions in economic development in Maine, and our designated skin partners,” he said. “By way of background, a ‘skin’ is an online sportsbook license that is typically tethered to a casino or racing license.”
— Bangor Daily News (@bangordailynews) April 30, 2021
Rebecca London, who is in the government affairs department for DraftKings, stopped short of testifying against tethering, but did say, “While states have taken slightly different approaches in their respective sports wagering frameworks, one thing is clear: an online marketplace with multiple qualified and experienced
operators is critical to the success of the industry.” She was testifying on behalf of DraftKings and competitors BetMGM and FanDuel, all of whom have aligned across the country to push forward the stand-alone mobile option.
In most states with existing casinos, digital operators are required to be tethered to existing casinos or racetracks. A notable exception is Illinois, where three stand-alone mobile licenses were written into the sports wagering law, though none have yet been claimed for a price tag of $20 million. In Tennessee and Virginia, neither of which yet have any existing gaming infrastructure, digital platforms stand on their own.
New Hampshire a key concern
Since the Maine legislature sent its sports betting bill to Mills in July 2019, neighboring New Hampshire legalized and has gone live with sports betting, bringing the number of legal states in New England to two. In Connecticut, the state recently came to an agreement with local tribes, and it is expected that lawmakers will legalize sports betting by the end of the year. In Massachusetts, multiple bills continue to circulate on Beacon Hill with no clear consensus on what sports betting should look like.
The movement in neighboring states is relevant, because New Hampshire is sandwiched between two non-legal sports betting states — Massachusetts and Maine — and offers statewide legal digital wagering through a partnership with Boston-based DraftKings. And there’s likely no question that Mainers are crossing the border to bet and the state is missing out on — if nothing else — the tax revenue flowing into New Hampshire from Maine.
— Nick Stoico (@NickStoico) October 30, 2019
“I think that what New Hampshire provides … it proves that people want this, that the volume is there, and how bets are being placed,” Silver said. “Over 80% are online, and their numbers are driven by Massachusetts and Maine not being legal. It’s kind of the perfect storm — or maybe rainbow — in New Hampshire. They went live right around when Maine got vetoed, and Massachusetts didn’t move, and COVID happened.”
DraftKings, which has a digital monopoly in New Hampshire and pays the state 51% of its gross gaming revenue, launched its digital site on Dec. 30, 2019, just 11 days before Mills vetoed the Maine bill.
“It’s unreal the amount of people who cross the border to make their bets,” Rep. Tim Roche said during the hearing. “I worry that money is leaving, and at this time we need money in this state. The other thing I want to stress is that [sports betting] is being done in this state. In the old days, supposedly when the mafia was in charge, you heard about people getting into trouble, but when was the last time you heard a [sports betting] pool or anything like that getting into trouble?”
Details must be worked out
Lawmakers also discussed whether to prohibit wagering on in-state Maine college teams, as well as how to “address the governor’s veto letter.” Luchini said his latest bill would allow stand-alone mobile, set a 10% tax rate on brick-and-mortar wagering revenue and 16% on mobile betting, allow for betting on all college sports, and provide “dedicated funding to problem gambling, including player-protection protocols, child-support interceptions, and self-exclusion” options. The bill does not cap the number of potential sports betting licenses that would be available.
“We voted on this last session,” Luchini said. “We felt that it was a free-market approach. This bill technically does not require tethering, which raises the cost of the service, which passes that on to the bettor via worse odds and payouts.”
Committee members will hash out the details of tethering — or not — in a work session later in May, but Silver said he still thinks the end result will be “both brick-and-mortar and mobile, and a reasonable tax and fee structure.” He also said it’s unlikely legislation will include “integrity fees or a data mandate,” and he expects it to include “reasonable limitations around advertising.”
It’s also possible that Maine’s legislation will go a step further than that of many other U.S. jurisdictions — in a nod to the governor, it could include more clear framework and guardrails around problem gambling, rather than leaving those decisions to regulators.