Sports betting in Maine is still at least six months from going live, but the head of the state’s gambling commission is feeling a sense of urgency as his agency continues to draft rules for how sports betting will operate here.

Milt Champion, executive director of the Gambling Control Unit, is urging sports betting providers interested in doing business in Maine, such as FanDuel and DraftKings, to begin applying for licenses with the state. He worries that if they wait too long, it could push back his estimate of when sports betting in the state will go live.

Since Maine posted provisional applications for the sports betting licenses on Feb. 14, no one has applied.

“The applications are out there, and I’d really like to see people that are going to do business in Maine start to fill out and reach out to us and communicate with us, and let’s get these applications in now rather than later,” Champion said. “All you’re going to do is prolong those start dates.”

Champion said sports betting is unlikely to be up and running before this fall. The Gambling Control Unit is in the process of revising sports betting rules following 581 written comments received after the first draft was published on Jan. 11. Champion said the next draft of rules will likely be ready in either late April or early May.

“I would say the timeline’s been moved up to, instead of April to January 2024, say October 2023 to January 2024. That would be the new window,” he said of sports betting going live. “I was really looking forward to having a soft opening in June or July, and we’ll still work towards that, but right now with what we’ve received so far, it doesn’t look like it’s a process that would be rectified in that time frame.”

The revamped rules will be open to public comment, and then revised again at least once more by Champion’s office before they are eventually sent to the Maine Attorney General’s office for approval. The AG’s office has up to four months to review the final draft of rules. Once it approves them, sports betting can go live.

MILLIONS IN STATE REVENUE

Maine joined dozens of states allowing sports betting when Gov. Janet Mills signed a bill passed by the legislature last spring. The sports betting law went into effect on Aug. 8. Champion estimated in January that the state’s annual cut of sports betting – set in the law at 10% of gross revenues after payouts to bettors – will be $3.8 million to $6.9 million.

Maine’s Indigenous tribes have exclusive rights to the lucrative online sports-betting market – which accounted for 87% of bets nationally in 2021, according to the American Gaming Association. There also will be as many as 10 in-person retail sites for sports betting. Both the tribes and the retail sites negotiate their own deals with providers, but those deals have to be approved by Champion.

A fall launch for sports betting in Maine would coincide with the football season, but providers taking too much time to send in license applications could push back that timeline, Champion said. He is one of three state employees handling the sports-betting rollout, and he worries his staff could be swamped if service providers wait until the state’s betting rules are approved before trying to get licensed.

“At some point we’re going to get applications, applications, applications, and my staff’s going to be pulling their hair out wondering what are we supposed to do with all of these applications,” he said. “(If) you can go live Nov. 24, but if you submit your application on Nov. 25, we might not finish your background investigations. These are extensive. It might be another six months before you get your license.”

While several other states – including Ohio and Colorado, both of which Maine worked with to draft its rules – had orders for retail and online sports betting to go live at once, Champion said there will be no such combined launch in Maine. As soon as the final rules are approved by the Secretary of State’s office, the market will go live, and whichever companies are licensed will be able to start taking bets.

Companies and operators not officially licensed by the time Maine goes live can do business via temporary licenses while they wait, provided they meet an established criteria laid out in state law.

“Once the rules are adopted … that very day, I’ll be issuing licenses. Whether it’s one tribe, all four, one OTB (off-track betting location), one casino, five OTBs, that’s the way it’s going to roll out,” Champion said. “If I were a business person, I’d be getting my application in now. I wouldn’t wait until the end.”

SURPRISED BY SLOW RESPONSE

Champion said he was surprised that Maine hadn’t yet received applications.

“I don’t know what those reasons are,” he said. “If they’re waiting because they made a comment on something and they want to see if it’s going to get changed first before they apply, I just don’t know that.”

John Holden, a professor at Oklahoma State University who has written extensively on the regulation of sports gambling, said he wasn’t surprised about the lack of applications so far in Maine.

“I don’t think it reflects a lack of interest in Maine at all,” he said. “One of the things that I think a lot of people overlook is that these applications are really onerous. They require a lot of time. It’s not something like setting up an LLC online, something you do in an hour. This is information on key employees, it’s a lot of stuff to pull together.

“It takes time. Companies want to be sure it’s correct. You do not want to be amending these applications. … It’s not like the first four to apply get the licenses, so there’s not a huge incentive to just get it in.”

Holden said he expects the country’s biggest-name providers – FanDuel, DraftKings, BetMGM and Caesars – to pursue business in Maine.

“I would be shocked if we don’t see (those four),” Holden said. “They have the desire to compete in every available market.”

Champion said he has no knowledge about negotiations between service providers and Maine’s tribes or in-person retail locations.

Hollywood Casino in Bangor is operated by Penn Entertainment, which owns a stake in Barstool Sportsbook. Oxford Casino General Manager Matt Gallagher declined to comment on the casino’s negotiations with service providers. Don Barberino, who owns Favorites OTB with locations in Waterville and Sanford, said he has reached an agreement with a provider for both locations but declined to name it.

“I’m not prepared to disclose that at this time,” Barberino said. “On that end, we’re ready to go, we’re just waiting for the rules to be finalized.”

Leaders of the four recognized Maine tribes – the Penobscot, Passamaquoddy, Micmac and Maliseet – did not respond to requests to be interviewed for this story.

ONLINE CAP MAY BE DETERRENT

Steven Silver, chair of the state’s Gambling Control Board, said he’s confident Maine will draw provider interest but that the biggest names might be dissuaded.

“I still think that it’s going to be a tough sell for some operators,” he said. “In the end, there will be sportsbooks offering mobile and retail bets in Maine. That’s a guarantee. Will there be a feeding frenzy for those licenses? I’m not so sure.”

Silver said one of the deterrents would likely be Maine’s cap on online revenue. Providers partnering with one or more tribes can earn up to 30% of the revenue it provides, or up to 40% with Champion’s approval.

States have widely varying rules for potential payouts to providers. New Hampshire, Delaware, New York and Rhode Island allow for providers to earn up to 49 or 50% of revenue, while more than 25 states allow them to keep up to 80 or 90%.

Silver also said the state’s restrictions on advertisements “would be the strictest in the nation.” Maine’s rules currently prohibit the usage of celebrities or professional athletes in advertising, the advertisement of gambling on college campuses and the offer of “risk free” bets. The rules currently require advertisements to be submitted to Champion’s office 10 days before being aired.

“I think there are a lot of questions to be answered,” Silver said.

Holden said advertising is likely the biggest point of contention for interested companies.

“In the case of Maine, the biggest thing is going to be the advertising,” he said. “That’s going to be where much of the lobbying is taking place.”

The advertising standards are part of the rules that were published in January, which Champion said were taken largely from a group of “six to eight” other states. Sports wagering inspector Kyle Bourget, a member of Champion’s staff, said Ohio, Colorado, Tennessee and New Jersey were on that list.

“I’d feel real comfortable in saying 90% of the rules are word for word from another state,” Champion said.

The comments Maine received, and the process Champion’s agency is going through to address them, isn’t unusual.

SLOW PROCESS IN OTHER STATES

Ohio went through two rounds of informal comments from stakeholders while preparing its rules. The last batch was submitted to the state’s formal approval process last May, and sports betting finally went live Jan. 1.

Jessica Franks, the director of communications for the Ohio Casino Control Commission, said the agency and its 30 staff members working on the sports betting process got “hundreds” of comments on the rules, and also dealt with slow reaction to the license applications being posted. The first application window ran from June 15 to July 15, 2022, but Franks said Ohio received only 11 applications in the first week and more 40 in the last 72 hours of that monthlong period.

“We had a lot of applicants that were not familiar with being involved in such a heavily-regulated industry,” she said.

Dan Hartman, director of the Colorado Division of Gaming, said he and his staff began working on rules after the state’s legislature passed sports betting in May 2019, and had a draft out by December. Hartman said Colorado had two separate stakeholder meetings to discuss the rules and then the republished draft.

“You’ve got to expect all of that,” he said. “When you’re putting out a full rule book about everything that you’re trying to get done, trying to make sure it matches the statute, making sure it does all the things it’s supposed to do, everyone’s going to have comments.”

Holden, the Oklahoma State professor, called Maine’s October-to-January timeline “cautious,” but he said it’s not worth it for the state to try to hurry its sports-betting market into action.

“There’s not a lot of benefit to rushing this. If you can launch in October, you’re still getting most of the NFL season. Even January, you’re still getting NFL playoffs,” he said. “There’s not a huge incentive to rushing out right now. … You’ve got early-season to mid-season MLB, which isn’t typically a huge draw.”

Taking too long into fall, however, could be costly.

“It will be very unfortunate if Maine misses the start of football season to go live. If we do, there’s really not an urgency until you get to the next Super Bowl,” said Silver, the chair of the Gambling Control Board. “Unfortunately, that’s part of the process. It’s not unreasonable, but it’s really unfortunate for both the consumers in Maine and the state, (which) stands to lose tax revenue from it.”

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