Maine’s efforts at gambling expansion in 2023 began late and ended early as its tribal online casino bill and a separate attempt to legalize digital bingo and historical horse racing (HHR) have both failed. These would have provided state residents with new gambling options besides sports betting, pending launch following its legalization in 2022.
Both pieces of legislation were tabled (put on indefinite hold) by the Committee on Veterans and Legal Affairs this week. Effectively, that means they won’t pass this year. Meanwhile, the projected launch date for sports betting keeps getting pushed back.
All told, it seems like 2023 is turning into a write-off for new forms of gambling in Maine.
Proposed Online Casino Bill Is Now Dead
On Apr 25, 2023, House Rep. Laura Supica introduced LD 1777. This bill would have legalized online casinos in Maine and assigned exclusivity to the state’s tribes. The proposed law used the same framework the state adopted for sports betting, allowing the tribes to partner with an online casino operator. In that regard, the market would have been similar to Connecticut’s, where the state’s two native tribes each offer sports betting and online casino gaming with a commercial company as their partner.
LD 1777 would have been attractive to operators, as it called for a mere 10% tax. That would have been the lowest in any state. It would have also included anonymous user data sharing to combat problem gambling.
Unfortunately, the bill now appears dead, though we may see the legislature take another shot at it in 2024.
HHR Terminals And Electronic Bingo Bill Dies Quickly
A separate retail gambling expansion bill was introduced on May 23. It survived just a single day before suffering the same fate as the online casino effort.
House Rep. Benjamin Collings introduced HP 1275 to legalize electronic beano (bingo) and HHR terminals. Both types of machines bear a superficial resemblance to slots but are technically not casino games. Electronic bingo falls under the umbrella of Class II tribal gaming as defined by the Indian Gaming Regulatory Act (IGRA). Meanwhile, HHR terminals use historical horse racing data instead of a random number generator, thus qualifying as parimutuel products under federal law.
Unfortunately, the Committee on Veterans and Legal Affairs was no keener on these products than on iGaming. The bill would have authorized their use by the state’s four Native American tribes, but not exclusively. Also included were the state’s two commercial casinos, two horse racetracks, and four off-track betting facilities.
Either of the two bills would have been of great economic benefit to the tribes. The Maine Indian Claims Settlement Act of 1980 preempted the IGRA, which only passed eight years later. As a result, the tribes are limited to offering bingo and don’t have access to full Class III gaming despite the existence of commercial casinos in the state. With the rejection of HP 1275 and LD1777, they will have to make do with sports betting for now, once it launches.
HP 1275 called for a 10% tax on the net proceeds of bingo and HHR terminals, which would have been divided as follows:
- 1% for administrative expenses of the Gambling Control Unit within the Department of Public Safety
- 1% towards the Gambling Addiction Prevention and Treatment Fund
- 4% for the Agricultural Fair Support Fund
- 4% to supplement harness racing purses
HHR Terminals Are Very Succesful In Other States
There are six states where HHR machines are legal (including one – Oregon – with legal online HHR) and eight states with electronic bingo.
Such slots alternatives can generate a lot of revenue for some of these states. Kentucky is a poster child for HHR because it has a long history of horse racing, despite being conservative on gambling generally.
In the last fiscal year, HHRs generated $6.8 billion in wagering activity in Kentucky. Even in low-population Wyoming, the games saw $1.3 billion in wagers in 2022. Both states tax HHRs low compared to the proposal in Maine. In Kentucky, the tax is 1.5%, while in Wyoming is 1.9%.
Maine Still Hopes To Launch Sports Betting This Year
Gov. Janet Mills signed Maine sports betting into law in 2022. The state decided to give online sports betting licenses to the four tribes, which will then partner with an operator. Meanwhile, retail gaming facilities can operate retail sports betting.
However, the state is still sorting out its regulatory rules, which is delaying the launch. The state’s Gambling Control Unit, responsible for the rollout, says it aims to launch in November 2023. However, the agency’s executive director, Milt Champion, was recently put on leave after a series of offensive social media posts. His deputy has taken over, and state representatives have said that a November launch is still possible.
Many industry experts are more skeptical, expecting that sports betting won’t be live until 2024. That said, if Champion is not allowed to resume his duties, it could be a boon for gambling expansion. As the director, he has been one of the forces opposing LD 1777.
Once the regulations have been finalized, the four Native American tribes and their partners will be able to launch online sports betting. It may prove to be a strange market. The state has not yet received any license applications, and rumors are swirling that major operators like BetMGM, DraftKings, and FanDuel may not seek online licenses, depending on the final regulations.
That could leave room for other smaller operators, and there are indicators that Caesars Entertainment is looking to build a significant presence. If LD 1777 had passed, it would likely have persuaded major operators to join the market, as online casinos are by far the more lucrative vertical. The all-time handle for US online casinos is double that of sportsbooks, despite iGaming being legal in far fewer states.
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