Maine’s new sports betting law will go into effect Monday, but it will be at least eight months – and possibly much longer – before anyone can place a wager.
Milt Champion, head of the agency that oversees gambling in Maine, says it will be at least next spring before sports betting is up and running.
“I’m looking basically at a window between April 2023 to January 2024, just to be on the safe side of things,” said Champion, executive director of the state’s Gambling Control Unit.
On May 2, Gov. Janet Mills signed a law legalizing sports betting in Maine and giving the state’s indigenous tribes exclusive rights to conduct online wagering. The law takes effect Monday, 90 days after the adjournment of Maine’s 130th legislative session. The law also allows Maine’s existing casinos to conduct in-person sports betting, but the online component is far more lucrative. Bets placed on mobile apps accounted for 87 percent of all sports bets placed nationwide in 2021, according to the American Gaming Association.
Maine sports bettors will wait longer than their counterparts in most states. Of 26 states that offer sports wagering, only 11 took as long as eight months to get up and running after their laws took effect, according to the sports betting site Sports Handle. Eight states took a year or more.
John Holden, a professor at Oklahoma State University who has written extensively on the regulation of sports gambling, was surprised to learn that it could be 2024 before sports wagers might be placed in Maine.
A LONG WAIT
“That seems like a long way off,” Holden said. “Most states are not taking 12 months to get this up and running.”
By comparison, Kansas legalized sports betting on July 1, and will likely go live before the end of the NFL season, he said.
‘We are not sort of at the dawn of sports betting here,” Holden said. “There is an institutional knowledge out there to get this up and running fairly quickly.”
The situation recalls Maine’s struggle to roll out legalized adult-use marijuana, which took almost four years to move from referendum to retail sales after voters approved legalization at the ballot box in 2016. Legislative rewrites, gubernatorial vetoes, a change in state administration and then the impact of the COVID-19 pandemic combined to make Maine’s rollout the slowest in U.S. history.
Champion estimates the state’s annual cut of sports betting – set in the law at 10 percent of gross revenues after payouts to bettors – will be $3.8 million to $6 million. The tribes would get 50 percent or more of the online revenues, with “providers” such as Draft Kings or FanDuel receiving up to 30-40 percent for hosting mobile apps where bettors place wagers. In addition, 0.25 percent of the gross revenue will go toward federal taxes.
New Hampshire, which has had sports betting since December 2019, brought in $16.7 million last year, but receives roughly 50 percent of all sports betting revenues. The cut that states take from sports betting ranges widely, from 6.75 percent in Iowa and Nevada, to 51 percent in Rhode Island and 50 percent in Delaware.
There are logistical hurdles before sports betting in Maine can go live. One of the biggest involves the handling of the mobile betting market, which will go to Maine’s four recognized tribes: the Penobscot, Passamaquoddy, Maliseet and Micmac. Each tribe will partner with a betting provider, though Champion said multiple tribes can partner with the same one.
“One tribe could have Draft Kings, one tribe could have FanDuel, one tribe could have BetMGM, one could have Barstool, that sort of thing. And then they would all get their percentage piece of the action based on the app,” Champion said.
Leaders from each of Maine’s four tribes did not respond to requests to be interviewed for this story.
Holden, the Oklahoma State professor, doubts multiple tribes will use the same provider.
“It’s just such a competitive market,” he said. “The idea that these brands wouldn’t do whatever they could to step over one another to get into any market they can would be a real change from what we’ve seen around the country.”
TRIBES TO NEGOTIATE WITH BETTING SITES
Champion said tribes will need to negotiate how much each of them gets if they use the same provider, as well as how much of the revenue the provider will receive. According to the law, providers can receive up to 30 percent, and would need approval from Champion if they seek up to 40 percent.
“They can have up to 40 percent if they can explain to me that they have enough capital investment and projected adjusted gross revenue that would warrant them to get an additional 10 percent,” Champion said. “So there’s a lot of back and forth that’s going to be necessary before they go live.”
Holden said having Maine’s four tribes getting cuts of mobile gaming revenue isn’t overly complicated. Fifteen states have at least part of their revenue going to tribal operators.
“On paper, it might look that way. In reality, we’ve seen these things work out fairly easily,” he said. “You look at an Arizona or Michigan (which also gave tribes licenses), those are pretty good comps for what we see happening.”
Providers would need to be licensed by Champion before they can enter into official contracts with the tribes.
“They can do all the negotiations they want to do, and I don’t necessarily have to be a part of it right now,” he said. “I don’t know that it’s going on. I assume that it is, because I would imagine that there are quite a few that are interested in being a part of this.”
In addition to business negotiations and license applications, Champion said the law also requires him to draft rules for the operation of sports betting in the state, including maximum wagers, use of credit and checks in betting and security for in-person establishments such as casinos and racetracks.
As of last week, Champion said he had drafted 17 chapters of rules. He said he will hire a deputy director by either September or October to help him finalize the rules, and that he’s hoping to have them finished by January.
PUBLIC HEARING ON RULES
After completing the rules, Champion said he will host a public hearing, followed by 30 days of written comments. The rules then will go to the Attorney General’s Office for a legal review before being finalized.
“That’s the largest step,” Champion said. “I don’t want to have rules adopted tomorrow, and then everybody’s waiting for an application two more months down the road. I want all this done, all at the same time, so we can go live.”
Champion said it’s unclear now whether on-site betting locations will go live before mobile apps do, but casinos and on-site locations would not be able to take bets until the rules are approved.
“I’m not going to make that decision. I think we can have some further conversation with the folks that are going to be involved,” he said. “Maybe we just have a mutual day where everybody goes live. We’ll have that discussion with my licensees when the time comes.”
Matt Siegel, a 34-year-old from Topsham who travels to New Hampshire to bet, said the projected wait is longer than he expected.
“I would have expected it to already have been here by now. I’m ready. I’m definitely hitting the point where I’m ready for it,” he said. “It seems like it’s taking a long time, that’s for sure. … It is a little frustrating, but all good things come to those who wait.”
Champion is confident Maine’s system will run smoothly once it’s live.
“We’ll get it done as quickly and as thoroughly as we can,” he said, “and I think it’ll be good once it’s all done.”
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