While a Maine sports betting launch is still months away, some of the industry’s largest sportsbooks are unlikely to be part of the market because of what they see as an uneven revenue-sharing model.
Sports Betting Alliance spokesperson Nathan Click told LSR this week its members, including FanDuel and DraftKings, will not apply for online Maine sports betting licenses because of the state’s agreement with tribes, who will control online sports betting. Sports betting operators in Maine are restricted to a maximum of 40% of the revenue brought in through sports betting.
The SBA also includes BetMGM and industry newcomer Fanatics Sportsbook.
Who might jump into Maine sports betting?
Along with Maine’s four tribes with online sports betting exclusivity, the state’s OTBs, casino, and race tracks can open in-person sportsbooks. An industry source told LSR this week BetMGM would likely partner with an OTB for an in-person sportsbook.
“We strongly believe Maine residents should be able to access safe, legal and regulated mobile gaming in the state,” a statement from the SBA said. “The experiences of dozens of states show that the best way to capture the betting that currently takes place using illegal offshore bookies is by creating a robust and competitive legal marketplace, one where the nation’s top legal sportsbooks and gaming operators are able to compete for bettors business while offering extensive consumer protections that don’t exist on the illegal market.
“The burdensome requirements for these platforms in Maine make that kind of participation and competition impossible, leaving bettors with no choice but to continue using unsafe illegal apps.”
When the public comment period on proposed rules closed in March, Maine Gambling Control Unit director Milt Champion told LSR he will not overhaul the regulations. Instead, Champion will work through small changes in drafts, contributing to his prediction that ME sports betting will not launch until 2024. Champion declined to comment on the SBA situation.
Revenue share big issue for operators
The state law includes a 10% tax rate on sports betting revenue. Maine’s four tribes can partner with an online sports betting operator or share a single provider. The tribes will receive at least 50% of online sports betting revenue.
Sports betting operators are entitled to at least 30% of the revenue but can request up to 40%. Maine has a population of approximately 1.3 million, so potential revenue will likely be dramatically lower than most legal US sports betting markets. According to LSR projections, Maine revenue will likely be between $60 million and $75 million annually.
The market would be the most financially straining for sportsbooks. National sportsbook brands have stayed out of Arkansas sports betting because of a 51% revenue share with the state’s casinos.
A similar revenue-sharing cap is part of proposed iGaming legislation introduced last month in Maine.
Major operators absent in comment period
The MGCU released its first set of proposed rules in January and is revising regulations following the public hearing period. The MGCU received 581 comments from 24 parties.
Champion said because comments came from attorneys, he does not know which sportsbooks have interest in Maine. Champion said he was not too concerned by their absence, but as of last month, the MGCU had yet to receive an application.
There is also industry concern over Maine’s proposed advertising restrictions. Operators cannot use celebrities in TV advertisements, and the MGCU must approve every TV commercial before it airs. Operators also cannot deduct promotional and bonus play.
The American Gaming Association sent a letter to Champion asking him to revise the advertising rules.
Slow rollout for Maine sports betting
Gov. Janet Mills signed sports betting legislation in spring 2022 following a multi-year journey that included a previous Mills veto.
While some states have hurried to launch sports betting in as little as a few months, Maine regulators are taking their time to develop rules. Champion expects another public comment period early this summer.
Champion previously told LSR a launch likely will not occur until at least January 2024.