Maine Restarts Sports Betting Talks with Tethering Debate

Maine Restarts Sports Betting Talks with Tethering Debate article feature image

Staff photo by Ben McCanna/Portland Press Herald via Getty Images. Pictured: Maine Capitol Building

Maine lawmakers reconsidering online sports betting legislation are split between a model that ties mobile licenses to retail establishments or one that allows a potentially uncapped number of digital sportsbooks.

A bill sponsored by Democratic Sen. Louis Luchini would allow any qualified sportsbook to apply for licensure without having to partner, or “tether,” with a land-based facility. Luchini, who championed a similar proposal that was vetoed by Democratic Gov. Janet Mills in 2019, argued before a legislative hearing Friday his bill would allow operators to avoid retail partners’ tethering fees and create a more “free-market approach” to legal wagering.

“So while the host license gets the subsidy from the mobile app, it is the tens of thousands of Maine bettors – our constituents – who will be paying that by having worse odds payouts from their bets,” Luchini said at Friday’s hearing.

Luchini’s bill would make Maine only the nation’s third untethered online sports betting market, after Tennessee and Wyoming, and the first with retail betting.

The untethered model contrasts Democratic Senate President Troy Jackson’s proposal that requires brick-and-mortar partnerships for online sportsbooks. Maine has two casino racetracks, four tribal gaming entities and a half-dozen off-track betting facilities, all of which could open retail and online sportsbooks under Jackson’s bill.

Penn National Vice President Jeff Morris testified against the untethered bill Friday, arguing it would have a negligible benefit to consumers’ betting odds and prices and would instead open the state to bad sports betting actors. Morris cited Tennessee Action 24/7, the nation’s only independent online sportsbook, which had its license suspended as part of an investigation into alleged money laundering.

Penn National operates Hollywood Casino Hotel & Raceway in Bangor and would be in line to open its Barstool-branded sportsbook under either proposal. Several other Maine land-based gaming entities, including Churchill Downs’ Scarborough Downs, backed sports betting in general but offered neutral or opposition testimony to the untethered model during Friday’s hearing.

Support Mounts for Maine Sports Betting

Though tethering has split lawmakers, Friday’s joint committee of House and Senate members reaffirmed the legislature’s growing legal wagering support. Jackson’s bill in particular underscores backing from many in the majority party, adding political capital to proposals that already have bipartisan support.

Multiple lawmakers Friday cited the licensed market’s potential to recapture unregulated sports betting dollars and generate state tax revenues. Others shared anecdotes of lost revenues from Mainers living near the New Hampshire border already crossing state lines to wager.

DraftKings General Affairs Manager Rebecca London testified in support of legal Maine wagering Friday without taking a position on tethering. DraftKings operates the lone legal online sportsbook in New Hampshire.

Additionally, officials from the NFL, the Maine Gambling Control Unit and the state’s off-track betting facilities testified in favor of legal wagering, with the latter group pushing for Jackson’s tethered model.

Friday’s hearing comes more than a year after lawmakers nearly overrode Mills' veto of Luchini’s previous sports betting bill. Luchini said lawmakers' ongoing work with Mills and the growth of the national market in the past year will assuage her regulatory concerns and garner the governor’s support should a 2021 bill reach her desk.

Next Steps

Lawmakers took no formal action on any gaming legislation Friday but said they would use the hearing’s testimony to shape legislation in an upcoming work session. Starting with the joint Veteran and State Affairs committee, which organized Friday’s hearing, legislators will work toward a proposal that can finally clear the legislature and earn Mills’ signature.

Maine’s current legislative session runs through 2022, but the 2021 portion is set to adjourn in June.

Aside from tethering, lawmakers must also settle a host of other legislative and regulatory issues including tax rates. Luchini’s proposal would tax retail sportsbooks 10 percent gross gaming revenue and online sportsbooks 16 percent, but stakeholders have sought even lower rates, particularly for brick-and-mortar options.

The legislature would almost assuredly include retail sports betting in any final legislation, at minimum for the state’s existing retail gaming facilities. Online wagering makes up 80 percent or more of handle in most mature betting markets, but Gambling Control Unit Chair Steven Silver said Friday that Maine’s population, the nation’s oldest by median average, could skew that number more heavily toward retail options.

Friday’s hearing reaffirmed growing support for legal Maine sports betting, but policymakers must still first rectify their disparate online tethering proposals, a central market structure issue that has delayed or derailed legal betting efforts in other states.

“I don't know why we would cap the number of providers, but if the committee wants to talk about that, I'm certainly open,” Luchini said.

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