The Maine legislature’s Veterans and Legal Affairs Committee has made progress on developing a regulatory framework for sports betting in the state, though a number of key elements are yet to be finalized.
A working session was held yesterday (May 20) on Legislative Document 553, a proposal filed by Senator Louis Luchini, who chairs the committee. It currently contains no detail and must be fleshed out in committee before it can go before the state House and Senate.
The discussions saw the committee reach a consensus on formalising the minimum age limit for sports betting at 21 years old, over an 18+ age limit.
There was also support for setting licence fees for sports betting suppliers and managed service providers at $20,000. It looks as if operators will have to renew these licences every two years, for a renewal fee of $20,000.
However, the sports betting tax rate is yet to be set, with committee members suggesting rates of between 8% and 15% of gross gaming revenue.
Testimony from industry stakeholders backed a lower tax rate, with DraftKings senior manager for government affairs Christopher Cipolla noting that licensed operators must compete against offshore operators not subject to tax or other regulatory costs.
“Barriers to market entry, such as high taxes and fees, cut into an operator’s profit and reduce their ability to offer competitive pricing, a significant factor for consumers when making the decision on where to spend their money,” Cipolla said.
Penn National Gaming’s vice president of public affairs and government relations, Jeff Morris, meanwhile, noted that sports betting was not a vertical that generated significant tax revenue for states. He pointed out that New Jersey operators generated revenue of just $12.7m from more than $320m in wagers in February.
For every $100 wagered, Morris said, operators would receive on average $5. This would be whittled down to $1 when federal excise tax, state tax, and operating expenses including betting data, data analytics, labor and marketing was factored in.
“With all of this in mind, it is critical that sports betting only be offered by licensed casino gaming operators at an appropriate tax rate,” he said.
There was also additional uncertainty over mobile wagering, namely the legislation would require all mobile offerings to be linked to a bricks and mortar facility. The committee appeared split between only allowing mobile operators to launch with a land-based partner, and allowing these operators to go it alone in the state.
Jim Day, who operates Maine’s Winner’s Circle off-track betting facility in Lewistown, cautioned against allowing companies with no physical presence in the state to launch mobile wagering.
“Sports wagering should augment our established businesses, which support jobs for Maine people,” Day explained. “Mobile is a large percentage of sports wagering and it should benefit Maine business, not undermine Maine business as we have substantial investments in our companies. The bricks and mortar should operate their own mobile platform.”
Don Barberino, operator of the off-track facilities in Waterville and Sanford, noted that 85% of sports wagering takes place via mobile devices, meaning that mobile-only operators would undermine the bricks and mortar businesses. This, he said, had already happened to the state’s harness racing industry, with commercial tracks and OTBs unable to compete against out-of-state operators.
PNG’s Morris echoed these calls, going as far as to suggest a phased mobile launch which would see customers required to register for an account at a land-based venue for up to 18 months after legislation was enacted.
However, a definitive decision was not taken on the issue before the committee hearing adjourned. The Veterans and Legal Affairs Committee next meets on Thursday (May 22).