Maine Lobster Postcard

Maine Nears Legal Sports Betting

For us fans of poker, it is rather disappointing that since the Department of Justice’s Office of Legal Counsel said in late 2011 that the Wire Act only applies to sports betting (the Trump Administration’s OLC has since said it applies to all interstate online gambling, but that has yet to be enforced), just four states have legalized online poker. Nevada, New Jersey, and Delaware did so in 2013 and Pennsylvania did so in the fall of 2017, though no sites have gone live yet. (July 15th is the target date, so there shouldn’t be much longer to wait.)

In the meantime, a bit more than a year since the Supreme Court overturned PASPA, about twice as many states already have sports betting industries up and running, with several more having passed sports wagering bills. The latest state in the latter category is Maine, which just awaits the signature of Governor Janet Mills.

Both the Maine House and Senate approved LD 553 about a week ago, sending the bill to Gov. Mills’ desk. She is expected to sign it into law.

Come One, Come All

The bill is rather interesting. Similar to that of other states, it sets forth the number of available brick-and-mortar sports betting licenses equal to the number of existing licensed entities in the state: the four tribes, four off-track betting shops, two casinos, and one harness racing track. Pretty easy. Those 11 entities can also operate mobile/online sportsbooks.

MaineThere is another branch of mobile sports betting, though. Other mobile operators are permitted in the state without being “tethered” to brick-and-mortar operations. In most (if not all) other states with online sports betting, mobile/internet operators must partner with a land-based betting venue. That operator could be the casino itself or, in many cases, an established online operator – usually based overseas – that inks a deal with the brick-and-mortar sportsbook.

Not so in Maine. In the bill, mobile operators need only be “qualified gaming entities,” that is, a “gaming entity that offers sports wagering through mobile applications or digital platforms in any jurisdiction in the United States pursuant to a state regulatory scheme.”

Thus, operators like William Hill or BetStars, already given the green light in other states, could qualify to operate an online sportsbook in Maine. The idea is to make Maine sports betting a “free market” industry. Let the customers sort out which operators win and lose.

There was some pushback in the legislature over this. Opponents felt that existing brick-and-mortar betting venues should be the only ones who can operate online sportsbooks, as they pay state property taxes and hire local employees. This is the old “think local, buy local” philosophy, which certainly has its merits.

The bill’s sponsor, Senator Louis Luchini, didn’t think tethering made sense, though, and much preferred the “free market” approach.

According to the Portland Press Herald, Senator Luchini explained during a floor debate, “To me it’s a strange way to write a law that would require a new business to come into Maine only if they tether their license to an existing business. We don’t require Amazon to tether to existing grocery stores and we don’t require Airbnb to tether to hotels.”

As a compromise to appease those who were wary of outside operators, a two-pronged fee and tax structure was developed. Brick-and-mortar sportsbooks will be taxed at 10 percent and will incur a $2,000 licensing fee, while online-only operators will be taxed at 16 percent and have to pay a $20,000 licensing fee. One percent will pay the administrative expenses of the Gambling Control Unit, the regulatory body that will oversee sports betting in Maine*, while another one percent will go to the state’s Gambling Addiction Prevention and Treatment Fund.

In order to bet on sports in Maine, customers will have to be at least 21 years old and, as one would expect, betting on high-school sports is prohibited. Betting on in-state college games is out of bounds, as well. Additionally – and this is a nice twist – if a gambler has a child-support debt, the sportsbook operators must take that out of his winnings before he gets paid. I suppose it would be nice if someone who owes child support didn’t gamble, but we can’t have everything we want.

With the Maine bill, the professional sports leagues were spurned again, as no integrity fee was included. On top of that, there is no requirement to use the leagues’ official statistical data.

*Many states stick sports betting or any new gaming industry under the umbrella of the lottery commission; Maine’s structure feels better to me.

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