Maine Sports Betting Bill Dies After Veto Override Fails

Maine Sports Betting Bill Dies After Veto Override Fails

Maine online and retail sports betting will remain illegal after the House of Representatives Tuesday morning sustained Gov. Janet Mills’ veto of a bill that would have permitted wagering. The House’s 85-57 vote closes the door for legal wagering in 2020.

Maine would have become the first state to allow traditional gaming establishments such as horse tracks and casinos to partner with third-party gaming operators. It also allowed for an uncapped number of digital sportsbook operators to enter the market without having to “tether” to an existing brick-and-mortar facility.

What would have been the 21st state to take legal bets in the nation, Maine would have been the third New England state to legalize sports wagering, after Rhode Island and New Hampshire. The three remaining states in the region without sports betting, Vermont, Massachusetts and Connecticut, are all considering bills to legalize betting during their respective 2020 legislative sessions.

Beyond New England, Maine’s unique legislation, which was celebrated by industry stakeholders, could have been a model for the nearly two dozen additional states considering sports betting legalization.

Bill Details

Along with the potential of a new legal market, Maine’s unprecedented legislation would have created an opportunity for one of the most robust per capita sports gambling jurisdictions in the country. Along with theoretically unlimited entry points for online sportsbooks, Maine’s bill included the nation’s lowest initial licensing fees ($2,000). The 10% tax on gross gaming revenue for retail bets and 16% for online bets puts it among the median sports betting rates in the country, which should be competitive enough to attract all leading operators.

  • Untethered: Maine would have been just the third state (behind Tennessee and Illinois) to permit untethered sportsbooks, meaning a qualified operator doesn’t need to partner with a retail establishment, as is the case in every other jurisdiction taking bets. Along with Tennessee, Maine has no cap on the number of untethered licensees, meaning all top sportsbooks such as DraftKings, FanDuel, William Hill and more than a dozen others would have entered the market.
  • Online: In addition, 11 gaming entities would have been allowed one online partnership or “skin.” Leading operators may choose to work with one of these establishments directly, which could be a way to bolster both in-person and online customers. Combined with the potential of the untethered online market and Maine’s low population density means the state should see digital wagers make up 80 percent or more of total handle, as is the case for top New Jersey sportsbooks and top Pennsylvania sportsbooks.
  • Retail: Since Tennessee has no retail gambling establishments, Maine would have been the first state with an uncapped number of untethered digital sportsbooks and retail locations. The bill permitted Maine’s two commercial casinos, four federally recognized Native American tribes, one horse track as well as four off-track betting locations to open books.

Background

The Maine Legislature approved sports betting in June 2019. Eight months later, the bill died.

  • Bill Passed: After months of negotiations in the Senate, the untethered sports betting bill passed 19-15 with bipartisan support (and opposition) in the Democratic-controlled upper chamber. It would prove less divisive in the House, also controlled by Democrats, which passed the bill overwhelmingly and without a formal roll call vote.
  • Veto: It appeared Democratic Gov. Janet Mills would sign the bill into law. Instead, she used a “pocket veto” at the conclusion of the 2019 legislative session. Under Maine law, the pocket veto stopped the bill from coming into law until the start of the ensuing session. Mills issued a formal veto at the onset of the 2020 session, writing that she feared the state wasn’t fully equipped to handle legal sports betting.
  • Timing: Sports betting backers in the Senate began persuading colleagues shortly after the veto, but it would take more than enough to get the two-thirds majority necessary to override the veto. Ultimately, Democratic sponsors were able to flip five former “no” Republicans and one Democrat. Even with two Democrats changing from “yes” to “no” for the veto override, backers secured 20 yes votes to 10 no votes during the Feb. 6 session. With five members of the 35-person chamber absent for the vote, the 20-10 margin was just enough to overturn Mills’ veto.
  • Opposition: The Senate vote didn't deter Mills, who expressed concerns that Maine wasn't ready for such a robust market and asked lawmakers to uphold the veto. The Democratic-controlled House did just that Tuesday. Though a majority of lawmakers supported the override, it still fell short of the required two-thirds supermajority of members present.
  • Bottom Line: Sports betting backers in the legislature had said they would try a new legislative effort if the veto override failed, but the House vote Tuesday came too late in Maine's 2020 legislative session to seriously consider another bill. Supporters will have to go back to square one in 2021 if they want to try another stab at legislation. In the meantime, Maine sports bettors will be without legal wagering for at least another year, and likely longer.

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