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Maine Sports Betting: To Tether Or Not To Tether Mobile Licenses?

The debate around legalizing sports betting in Maine seems like it will come down to an issue the state legislature already decided.

There are four sports betting bills active in Maine, which began its first special session last week. The bills introduced Friday in the joint Veterans and Legal Affairs Committee are similar except for one major difference concerning the mobile market.

Of course, the decision of whether to tie mobile licenses to the state’s retail gaming locations was already decided previously. The legislature passed a ME sports betting bill in 2019 that allowed for an open mobile market.

That bill was ultimately vetoed by Gov. Janet Mills on some questionable logic. An override vote fell short in the House after Mills rallied her fellow Democrats.

Details on Maine sports betting bills

Two of the bills, LD 1527 from Rep. Tim Roche and LD 1532 from Sen. Louis Luchini, call for mobile licenses to be untethered from casinos. That means it would be an open mobile market with any sportsbook licensed by a US jurisdiction eligible for a license.

LD 1404 from Sen. Joseph Baldacci and LD 1405 from Sen. President Troy Jackson disagree. Both bills call for any mobile betting license to run through a casino, racetrack, federally recognized Indian tribe, or off-track betting facility.

The bills are headed toward a work session to figure out the best model for the state, but tethering is really the only difference.

More ME sports betting bill details

The Maine bills all include important details identical to the vetoed LD 553:

  • A 10% tax on sports betting revenue from retail sportsbooks. That jumps to 16% for mobile sportsbooks.
  • All licenses are good for two years. Retail locations pay $2,000 while mobile operations pay $20,000.
  • No betting on in-state colleges.
  • Only LD 1527 requires official league data for in-play bets on games from leagues based in the US.

Luchini’s bill specifically calls out advertising and not directing ads toward minors. That was one of Mills’ concerns and will likely make whatever final bill moves forward.

Tethered vs. untethered arguments

Unsurprisingly, most of the companies with a physical location in Maine are in favor of a tethered model.

It is easy to see why. The vast majority of sports betting happens online today, with some states seeing more than 90% of all handle bet online. That means without a revenue-sharing agreement with those mobile operators, the physical locations will miss out on most of the business.

It isnot fair to leave businesses that invested in the state with the leftovers, Jim Day, president of Winners Circle OTB, said. He also said the mobile operators will not have a problem with a tethered model.

“DraftKings, FanDuel, MGM, William Hill and the like all expect this relationship to be tethered,” Day said. “They are in the state now negotiating with facilities in advance of the bill being passed.”

Penn National warns of regulatory strain

Penn National, which operates one of the state’s two casinos, also called for a tethered model.

Jeff Morris, Penn’s VP of public affairs and government relations, told the committee about Action 24/7 in Tennessee. He transitioned into the story while talking about the potential for a significant regulatory burden with an untethered model and unlimited licenses:

“This was the case in Tennessee last month where unlimited licensees are allowed. A fly-by-night company got a license by claiming they had strong internal controls. They did not, and criminals were able to launder tens of thousands of dollars before anyone noticed.”

Morris is not necessarily wrong about keeping sports betting to companies that know how to do it, but neither of the two untethered bills suggests otherwise. Only a sportsbook licensed in at least one US jurisdiction could apply for an untethered license.

No untethered talk from BetMGM, DK, FD

Rebecca London testified on behalf of BetMGM, DraftKings Sportsbook and FanDuel Sportsbook. Her short testimony and written statement did not mention a need for tethered or untethered.

“We look forward to continuing to work with the Committee on legislation that creates a framework to eradicate the illegal market, protect consumers and generate tax revenue and investment in the State,” London’s written testimony concluded.

Steven Silver, the chairman of Maine’s gaming regulator, took no stance on tethered or untethered. He did explain, though, that any market is better off being open:

“The key here is going to be tethering or untethering, that’s going to be the theme of the day. I don’t have an opinion either way about that other than, in any industry — forget sports betting — an open market with free and open competition is going to serve consumers better.”

Either way, keep money in Maine

Whether it comes down to a tethered or untethered model, the legislature does not want potential tax dollars leaving the state.

Maine only borders one US state, but it is one that makes sports betting easy for out-of-staters. Sports betting in New Hampshire is controlled by a DraftKings Sportsbook mobile monopoly that lets anyone register and place bets as soon as they cross the border.

“I started to look around and I am on the southern tip of Maine as you guys know, and the amount of people that actually leave here to go gamble [in New Hampshire] is unreal,” Rep. Roche said.

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