Maine Governor Vetoes Sports Betting Bill; Override Possible

Maine Governor Vetoes Sports Betting Bill; Override Possible

Maine could have become a national model of sports betting. Instead, Gov. Janet Mills again vetoed a bill on Friday that would have legalized online and retail sports betting in her state.

The bill had everything going for it, but Mills, a Democrat, vetoed it anyway. Maine would have been the first in the nation to allow both retail sports betting and untethered online wagering, which could have positioned Maine as the most robust sports betting market in New England and possibly opening the door for other states to permit similar structures.

Her veto might not last very long. Maine State Sen. Louis Luchini told Friday that he may look to override Mills' veto as early as next week.

"I'm disappointed, but I'm hopeful the committee can continue working and try to come up with a bill potentially that'll have a chance of passage,” said Luchini, a Democrat. "It'll be on our Senate calendar on Tuesday. You know, I don't know what we're going to do with it if we're going to deal with the veto on Tuesday or another day.

"It's one of those things we'll see where people are, see if we have the votes to override."

Under the bill, Maine bettors would have been able to place wagers at nearly a dozen brick-and-mortar gaming facilities, those entities’ digital affiliates as well as what is now an uncapped number of untethered “qualified gaming entities,” creating an unparalleled marketplace for sports betting competition. Combined with the nation’s lowest initial application fees and reasonable tax rates, the Maine legislation would have been one of the strongest in the nation for both bettors and operators.

The second sports betting veto comes more than six months after Mills “pocket vetoed” the legislation in the waning days of the 2019 session over fears the state wasn’t equipped to handle what she considered an unnecessary gambling expansion. Under Maine law, the pocket veto allowed her to nix the bill and prevent the legislature from overriding it, even despite majority support in the Senate and overwhelming support in the House.

Since then, neighboring New Hampshire began taking mobile sports bets as did Rhode Island. Meanwhile Connecticut, Massachusetts and Vermont will consider sports betting legalization in 2020.

Regulators would have still needed to promulgate and implement sports betting rules, but eligible Maine residents and visitors over the age of 21 would have been likely been able to place a bet before the start of the 2020 football season, assuming Maine followed a similar trajectory as the 20 other states taking bets now or finalizing regulations to do so.

Sports betting backers in Maine will have another opportunity to send a new version of the bill to the governor during the 2020 session, but they will likely still need to persuade a governor who remains skeptical about legal wagering, despite authorization measures across the country — including Maine’s own proverbial backyard.

Maine’s Sports Betting Law Explained

The law would have allowed eligible bettors anywhere in Maine to legally place wagers on all professional sports and most collegiate sporting events with licensed operators. However, bettors would still be prohibited from placing bets on athletic events involving any Maine collegiate sports team or participant, even in cases where the sporting event takes place outside the state.

The Maine Department of Public Safety’s Gambling Control Unit, which already enforces the state’s laws regulating casinos and fantasy sports, was set to provide regulatory oversight. The bill had called for a 10% for gross sports betting revenue at onsite sportsbooks and 16% for online wagers.

Though the online rate would have been higher than the national average, it was still low enough for market entrants to remain financially viable. Combined with the potential for a practically limitless number of entrants, that rate should have enticed most if not all top sportsbooks, including Boston-based DraftKings, as well as FanDuel, William Hill and a score of competitors.

Maine’s sportsbook license fees were set to be the lowest in the U.S. at $2,000. By comparison, New Jersey sportsbooks’ licensing begins at $100,000, and Pennsylvania sportsbooks were charged $10 million.

Mills wrote in her veto message that she remains "unconvinced at this time that the majority of Maine people are ready to legalize, support, endorse and promote betting on competitive athletic event."

"Before Maine joins the frenzy of states hungry to attract this market, I believe we need to examine the issue more clearly; better understand the evolving experiences of other states; and thoughtfully determine the best approach for Maine," Mills wrote. "That approach needs to balance the desire to suppress gambling activities now being conducted illegally and the need to protect youthful gamblers and those least able to absorb losses under a closely regulated scheme."

Maine’s Free Market Approach Would Invite Competition

The purveyor list would have only better facilitated a competitive marketplace.

Maine would have become the first state with retail sportsbooks at traditional gaming facilities such as casinos; digital sportsbooks affiliated with those facilities; and untethered digital operators. Illinois will also permit a handful of untethered digital operators but the number of licenses is limited and those purveyors will have to wait 18 months until after the first in-person bet is placed.

The legislation would permit Maine’s commercial horse track, four off-track betting facilities, two casinos and four federally recognized Native American tribal casinos to take bets. Most if not all of those 11 facilities would likely apply for an online license, or “skin.” In mature markets such as New Jersey, more than 80% of total betting handle is placed online. Combined with the potential for untethered operators to enter the market, Maine could have seen similar figures once it reaches maturity.

New Hampshire also has mobile sports betting, but the lottery-run platform decided to give DraftKings exclusive access to digital sports betting for the time being, despite authorization under the law to allow as many as five mobile skins. Rhode Island too has a lottery-run sports betting monopoly, which permits only one legal online site and requires in-person registration at one of the state’s two casinos.

Maine’s legislation avoided those pitfalls. Had Mills signed the bill or let it come into law, Maine’s legislative structure could have opened the door for one of the most lucrative per capita markets in the region and potentially the nation.

Now, lawmakers will have to start their efforts to approve sports betting over. The growth of other regional markets could change Mills’ mind, but her veto Friday reaffirms that a major roadblock remains in the governor’s mansion. But Luchini isn't giving up.

“I think this (sports betting) is an activity that happens. We all want to make sure that it's done responsibly and insurers kids don't have access to it,” he said. “Of course, [there are] more things we need to do with it, to give the governor confidence that the legislation does that, then we're more than happy to work with her on it.

“I respect her opinion. She worked incredibly hard on this and I spent a lot of time with her in the last few days. You know, we'll have to see where everybody is next week."

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