AUGUSTA — If national trends are any indication, it’s likely that Maine will soon legalize gambling on football, baseball and other sporting events.

The big questions facing Maine lawmakers are how and when to join other states hoping to regulate – and capitalize on – a multibillion-dollar sports betting industry.

On Friday, representatives of Maine’s two casinos as well as off-track betting parlors and the harness racing industry spoke in favor of moving forward – albeit judiciously – with legalized sports betting in the state. While some lawmakers raised concerns about sports betting contributing to “problem gambling,” there was no organized opposition to five legalization bills pending this session.

Scarborough Downs publicity director Michael Sweeney said sports betting could help bring additional business to the harness racing track, which is embarking on a long-term plan to redevelop The Downs as a mixed-use site.

“This is an opportunity for industries that are home-grown, locally based, small mom-and-pop businesses to grow and thrive,” Sweeney said.

Setting up a legal sports betting industry in Maine would be nowhere near as complicated as the current, years-long effort to create a tightly regulated and taxed marketplace for recreational marijuana. For starters, Maine already has two casinos – Oxford Casino in western Maine and Hollywood Casino in Bangor – plus several other forms of gambling that are regulated by the state.

But the process is likely to be a lengthy one in Maine as lawmakers debate the details of a new gambling program. Other states offer examples to follow as well as some cautionary tales.

In the 11 months since the U.S. Supreme Court struck down a federal prohibition, seven states joined Nevada in allowing gambling on sporting events. While those early endeavors have yielded mixed results in terms of revenues and participation, at least two more states appear poised to follow suit and legalization measures are pending in more than 20 others.

The Maine Legislature’s Veterans and Legal Affairs Committee heard testimony Friday on five bills that propose different ways to proceed with sports wagering.

Some bills would require wagers to be placed in physical, “bricks and mortar” locations, while other measures would also allow Mainers to make bets online. Another proposal would only allow Maine’s federally recognized Indian tribes to operate sports betting facilities.

If they were to proceed with sports gambling, lawmakers will have to decide how much to tax the revenues – with rates ranging from 7.5 to 36 percent in other states – as well as how to divvy up that money. The tax revenues from Maine’s two casinos, for instance, are funneled to host municipalities, college scholarships, agricultural fairs, harness racing purses and tribal governments, to name a few.

Milton Champion, executive director of the Gambling Control Unit that oversees those casino operations for the Maine Department of Public Safety, pointed to the deflated experiences of other states as he warned lawmakers not to bank on a financial windfall.

Jeff Morris, Penn National Gaming Inc. vice president of public affairs and government relations, speaks during a hearing on several bills dealing with sports betting before the Veterans and Legal Affairs Committee on Friday. Kennebec Journal photo by Joe Phelan

New Jersey and Delaware are the only two states among the seven so far to meet or exceed revenue projections from sports betting. Rhode Island, for instance, expected to see revenues of $1 million a month, but the numbers have been closer to $50,000 per month.

“There is only so much discretionary funds available,” Champion said. “This, in my view, indicates that New England has or is very close to reaching its saturation point. It is essential, however, that we have the ability to offer what the competition offers. And by competition, I am referring to other states.”

Even so, Friday’s hearing made it clear that multiple groups are closely monitoring the discussion and hope to get in on the action.

Dan Walker, a lobbyist for Oxford Casino’s corporate owner, Churchill Downs, said the company is “exploring our potential role” in sports betting in Maine, depending on how it is structured.

“From the state’s perspective and the business’s perspective, sports betting must be set up in a sustainable way that doesn’t over-saturate the market or over-tax the businesses that operate … on very narrow profit margins,” Walker said. “So the structure must be one where the businesses remain profitable while generating revenue for the state in deterring bettors away from the black market.”

Jeff Morris, vice president for public affairs and government relations for the owner of the Bangor casino, Penn National, called sports betting a “low-margin” operation that typically only yields about $1 for every $100 bet. But Penn National’s experience in other states shows that sports betting draws people into their facilities, thereby increasing spending on table games, hotel rooms, meals and other services.

Morris said that setting a tax rate too high, however, will discourage development of the industry. For instance, Penn National has no plans to invest in sports wagering in Pennsylvania, where the tax rate is 36 percent.

“We strongly believe that the best way to convert bettors from the illegal market to the regulated sports betting industry is by embracing a competitive, fully mobile sports wagering market,” said Chris Cipolla, senior manager of government affairs for DraftKings. Kennebec Journal photo by Joe Phelan

At least one of the bills under consideration would prohibit online sports betting. But in New Jersey, an estimated 80 percent of legal sports wagers during the first three months of 2019 were made online via mobile devices.

A representative for DraftKings, a fantasy sports company that expanded into online betting, said applications such as his company’s help to cut down on black market or offshore sports gambling. They also maintain strict registration processes aimed at preventing underage gambling.

“We strongly believe that the best way to convert bettors from the illegal market to the regulated sports betting industry is by embracing a competitive, fully mobile sports wagering market,” said Chris Cipolla, senior manager of government affairs at DraftKings.

At least three of the five bills under consideration would either allow tribal governments to operate sports betting facilities or would earmark part of the gambling revenues to tribes. One of the bills under consideration, L.D. 1571, would give tribes the exclusive right to operate sports betting facilities, although the sponsor said Friday that he and tribal leaders are also open to a more open market.

Maine’s tribes have repeatedly tried and failed to convince lawmakers or statewide voters to authorize slot machines or full casinos on tribal lands. Those unsuccessful efforts have, in turn, exacerbated long-standing tensions between the tribes and the state over tribal sovereignty issues.

Penobscot Nation Tribal Ambassador Maulian Dana said tribes’ inability to offer gaming was “one of the unfortunate byproducts” of those tensions. But Dana pointed to Friday’s discussion as well as Gov. Janet Mills’ signing of a bill renaming Columbus Day as “Indigenous Peoples’ Day” as another sign of “a new dawn” between tribal and state governments.

“I think that a lot of the barriers in the past have been based in fear,” Dana told committee members. “The tribes are never out to get anything special. We are really out for equality and are just exercising our sovereignty.”

There was no testimony against any of the bills.

 

 

 

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