A Look Inside How Sports Betting Became The Maine Squeeze

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Maine sports betting

Of all the states to legalize this year, Maine sports betting might get the award for coming out of nowhere.

Sure, there was a lot of interest in the state, evidenced by the introduction of seven bills to authorize sports betting.

But none of them went anywhere until, like a Stephen King plot twist, LD 553 cleared a committee and two chambers in the final two days of the legislative session.

The Joint Committee on Veterans and Legal Affairs crafted the bill late in the session from the best elements of each previously introduced bill. Sen. Louis Luchini and Rep. Scott Strom, ranking minority member of the committee, served as sponsors.

Legal Sports Report spoke with House sponsor Strom about how Maine ended up with the lowest licensing fee of any state with multiple operators in the recent wave of legalization, the familiar issue that almost derailed the bill, and why he’s sure that the governor won’t veto the legislation.

Online operators win this round

Just like in Illinois, a battle between brick-and-mortar establishments, online operators like DraftKings Sportsbook and FanDuel Sportsbook became the issue as the Maine sports betting bill neared the finish line.

Illinois tethered the online operators to retail locations for the first 18 months, restricted their use of branding in such partnerships, and made it at least twice as costly for them to eventually get mobile/online licenses.

The 11 brick-and-mortar gambling establishments in Maine — two commercial casinos, four tribal casinos, one racetrack and four off-track betting (OTB) parlors — asked for similar terms.

“Casinos were fighting us right up until the vote passed,” Strom said. “They fought for tethering because they felt DraftKings and FanDuel are going to have an advantage over them. When they couldn’t get that, they tried to get a two-year headstart but didn’t pick up any traction with that.”

While the bill passed easily enough in the House that only a voice vote was needed, the question of how to handle mobile-only sites nearly derailed the bill in the Senate, where it passed by a 19-15 vote.

“That’s what made the Senate vote close, that members were trying to help the brick-and-mortars,” Strom said. “But we felt DraftKings and FanDuel have been good operators in the state on daily fantasy sports and should be allowed to continue operating on their own with sports betting.”

Tiered tax compromise prompts Maine passage

Strom pointed out that New England Patriots owner Robert Kraft owns a percentage of DraftKings. That could have been a reason why DraftKings Sportsbook and FanDuel Sportsbook were treated better by lawmakers in Maine than Illinois.

He added that lawmakers also felt that tethering would give the two OTBs an unfair advantage that negated their competition concerns.

Ultimately, the legislature offered a compromise to create a higher tax rate for mobile/online wagering at 16% compared to 10% for retail, accounting for that mobile operators aren’t paying property taxes in the state. There is no limit on mobile/online licenses.

It costs how much for a Maine sports betting license?

Legislators put Maine’s initial license fee at a mere $2,000. The rate is so much lower than other states that LSR originally thought it must be a typo leaving out a zero.

Strom assured that the figure is accurate. He explained that Milton Champion, director of the Gambling Control Unit that will regulate sports betting in Maine, made the recommendation for the licensing fee.

“I think the rationalization was that they have licenses already,” Strom said. “They have licenses to do everything else in a casino, harness racing and everything else. This is just to add sports betting.”

Governor already declined to veto sports betting

As soon as the legislature adjourned Thursday morning, Strom indicated that Gov. Janet Mills vetoed a batch of bills to give legislators the courtesy of responding to the vetoes immediately while still assembled.

Legal sports betting wasn’t among the bills vetoed, which Strom sees as an indication that the governor plans to allow the bill to become law.

“As far as we’re aware, any vetoes she was going to issue were issued,” Strom said. “She didn’t veto it, so we’re pretty confident she’ll sign.”

Mills has 10 business days to act on the bill, making the deadline around July 3.

Kickoff could be right around kickoff

The law would go into effect 90 days after the bill passed, meaning Maine could start issuing licenses late in September.

Strom noted that Champion expressed confidence at committee meetings that Maine sports betting could be up and running quickly in the state.

“I kept joking with him that I’m a Dallas Cowboys fan, so it needs to be ready by the time the Cowboys play the Patriots in November, and he assured me it would be,” Strom said.