DraftKings has reached an agreement in principle with the Passamaquoddy Tribe ahead of Maine’s sports betting market launch this Friday (3 November).
The tethered licence is the last of the available four permitted under Maine’s sports betting law.
LD585, signed by governor Janet Mills in May 2022, grants each of the state’s four federally recognised tribes a sports betting licence.
However, the Maliseet, Micmac and Penobscot tribes all opted to partner with Caesars Sportsbook as opposed to one of the larger national operators.
The news means that Maine is set to be a two-way race between DraftKings and its smaller competitor when the legal betting market goes live.
DraftKings added that the deal remains subject to licensing and regulatory approvals.
“Building a relationship with the Passamaquoddy Tribe is a fantastic opportunity for DraftKings, as we look to bring customers in the state of Maine safe and legal sports betting,” said DraftKings CEO Jason Robins.
“We look forward to our continued collaboration with the Maine Gambling Control Unit as we become the official mobile sports betting provider of the Passamaquoddy Tribe and launch in our industry-leading 25th state.”
“The Passamaquoddy Tribe is excited to enter into a mobile sports wagering agreement with DraftKings,” added Passamaquoddy Tribe chief William Nicholas.
“We couldn’t have landed a better organisation in the mobile sports wagering arena, and we look forward to continued progress and investment for future growth in the state of Maine.”
As late as April this year, no sportsbook operators had applied for a licence in the Pine Tree State.
Factors influencing this included the state’s low population, prohibitive licence restrictions and a punitive advertising regime.
Last month, a report from Eilers & Krejcik Gaming suggested that DraftKings had overtaken FanDuel to become the US online gambling market leader by GGR.
No sportsbooks have applied for a Maine online sports betting license, another launch hurdle for what is set to be the nation’s next live legal wagering market.
Though Maine has technically approved mobile sports betting, no sportsbook has applied for a license, according to a Portland Press-Herald report. The lack of sportsbook interest is another factor in what could be the nation’s longest rollout from bill signing to first bet.
Maine Gov. Janet Mills signed her state’s online and retail sports betting bill into law in May 2022. Most of the more than 20 states to approve online sports betting have gone from bill signing to inaugural wager in less than a year. The longest was Maryland at just over 18 months.
There’s no timeline yet for Maine’s launch, but it could plausibly take until early 2024, according to the Press-Hearld report.
The bill pushed by Mills, despite opposition from lawmakers, gave exclusive mobile wagering authorization to the state’s four federally recognized Native American gaming tribes. The legislation allows the tribes to each have one individual license apiece, or two or more tribes can partner together. This means there could be between one and four mobile wagering platforms in the state.
The license limits as well as Maine’s small population are two factors that have likely dissuaded early interest from operators. Maine is also set to have some of the nation’s highest tax rates and most prohibitive advertising restrictions.
DraftKings would seem to be the likeliest company to partner with a tribe and apply for a license. The nation’s No. 2 sportsbook by handle, Boston-based DraftKings agreed to pay a 51% tax rate on gross gaming revenue in neighboring New Hampshire in exchange for a de facto monopoly.
FanDuel, the No. 1 operator by handle and BetMGM (No. 3), seem to be other likely applicants. If no leading national commercial operators pursue a license, one or more tribes may work with a third-party tech company to create a self-branded sports betting platform.
Maine’s 2022 sports betting bill also allows retail sportsbooks at the state’s two brick-and-mortar commercial casinos, which are owned by Penn Entertainment and Churchill Downs, respectively. Penn would presumably open a Barstool Sports-branded in-person book at its property. Churchill Downs has shuttered sports betting on its Twin Spires online platform but could open an on-property retail book.
The state’s off-track betting facilities can also open retail books. No OTB sportsbook platform partners have been announced publicly.
New England market
All six New England states could presumably have live mobile sports betting by next year.
Rhode Island was the first state in the region with legal sports betting, opening the RI Sportsbook in 2019. New Hampshire followed with a DraftKings launch in 2021.
DraftKings as well as FanDuel mobile sportsbooks are live in Connecticut. Rush Street Interactive’s PlaySugarHouse is set to leave the market later this year, though another operator is expected to enter the state.
Massachusetts, which in March became the most recent state in the country to start taking legal mobile bets, has more live sportsbooks than all other New England states combined. DraftKings, FanDuel, BetMGM, Caesars, WynnBet and Barstool are live now with more operators set to follow in the coming year.
Vermont, the only New England state that hasn’t yet approved mobile sports betting, is considering a bill this year.
The American Gaming Association penned a letter Monday opposing sports betting ad proposals in Maine that would be among the nation’s most restrictive.
The AGA reaffirmed its opposition to regulations prohibiting a wide range of sports betting advertising in a letter addressed to Maine officials published Monday.
The country’s leading gaming advocacy group wrote Maine’s proposals “will undermine a critical tool that the legal industry uses to inform the public about licensed operators, further empower illegal sportsbooks and limit the success of the legal market.”
“…It is important to avoid policy decisions that – even if well- intended – will ultimately undermine the ability of the regulated marketplace to compete against illegal sportsbook operators,” wrote Bill Miller, who signed the letter to the Maine Gaming Control Unit.
Maine regulators have proposed what would be among the most stringent ad restrictions of any of the more than 30 US jurisdictions with legal sports betting. Among those are prohibitions of ads featuring celebrity representatives; most major sportsbooks, including FanDuel, DraftKings, BetMGM and Caesars, have featured high-profile actors, athletes or other famous Americans in their marketing.
Each ad would also be subject to individual review by the MGCU. A final decision on regulations will come after a public comment period and review.
The AGA has made combating unlicenced regulators, particularly offshore gaming sites, a top priority. Since these sites are unable to broadcast ads on television broadcasts and other sporting events, the AGA has touted advertising as a way for bettors to identify legal books.
“Statutory and regulatory restrictions or bans will only impede the ability to inform consumers about the availability of legal sportsbooks and the tenets of responsible gaming, and strengthen the competitive advantage enjoyed by illegal betting operations,” Miller wrote.
Maine sports betting market
Maine’s regulation review comes ahead of the state’s mobile sports betting launch, which is projected for later this year.
The state’s 2022 sports betting law allows Maine’s four gaming tribes to launch online sportsbooks. According to regulators, the tribes can either combine for a license or do so individually, meaning there could be as many as four or as few as one legal online book in the state.
It remains to be seen which – if any – national operator would seek to partner with a tribe. Even before the introduction of the proposed ad restrictions, Maine’s small population and high tax rate were deterrents to market interest.
AGA President Bill Miller: …It is important to avoid policy decisions that – even if well- intended – will ultimately undermine the ability of the regulated marketplace to compete against illegal sportsbook operators.”
Maine gaming tribes could also potentially partner with third-party B2B tech providers to launch self-branded sportsbooks, a move gaming tribes in several other states have undertaken.
The 2022 law also permits retail sportsbooks as the state’s two major casinos, Penn Entertainment’s Hollywood Casino in Bangor and Churchill Downs’ Oxford Casino. Penn operates retail sportsbooks under its Barstool brand at multiple casinos in other states as well as a mobile offering in more than a dozen jurisdictions. Churchill Downs stopped taking single-game sports bets through its TwinSpires mobile app but still operates in-person books in several states.
New England sportsbooks see tough limits
Maine is set to join New England neighbor Massachusetts among a growing list of states with strengthening regulatory measures for its legal sportsbooks.
Massachusetts undertook one of the most thorough public reviews of any US jurisdiction when approving licenses for its sportsbooks. Bay State officials had initially proposed ad restrictions even more stringent than Maine’s. Officials are still pursuing a ban on affiliate marketing firms.
Though more than 30 sportsbooks publicly expressed interest in the state, only 10 are set to go live in the state by this year’s end. Bet365 and PointsBet both withdrew their respective license applications.
Maine and Massachusetts may still be the only states in the region with more than three legal sportsbooks.
Rhode Island, one of the first states to launch legal mobile sports betting, has only one legal betting option, Sportsbook Rhode Island. DraftKings is the only legal sportsbook in New Hampshire and one of three in Connecticut, along with FanDuel and BetRivers.
Vermont is the only New England state without legal sports betting but lawmakers are considering legislation during the state’s current legislative session.
Maine gaming regulators recently announced a rough timeline that could see mobile and retail sportsbooks open this calendar year, though there is still no set go-live date.
The state’s first legal sports betting options could come as early as this summer, Milton Champion, Maine Gambling Control Unit executive director said at a press conference last week. Champion said that depends on how quickly regulators and state officials approve sports betting rules.
A lengthy regulator process could delay the launch until January 2024, Champion said.
Officials will hold a sports betting rules hearing Jan. 31. Stakeholders have until March 3 to respond with questions or comments on the rules. Assuming sign-off by the state’s attorney general as well as secretary of state, as required by law, the first legal books could take bets before the 2023 football season, though Champion said significant work remains.
Champion stressed repeatedly during the conference that regulators and officials would work to complete the rulemaking process without self-imposed timelines on the sporting calendar. He also said that a launch by this year’s Super Bowl or NCAA Men’s Basketball Tournament “was not going to happen.”
Sportsbook participants undetermined
Champion also reaffirmed that there have been no formal decisions on participating sportsbook operators – or even the sum of market participants.
Maine’s 2022 sports betting bill gives exclusive online sports betting rights to the state’s four gaming tribes. Champion said that there could be between one to four operators total, depending on agreements struck by each tribe. For example, each tribe could partner with one operator or two or more could team up with one sportsbook.
DraftKings would seem to be one of the likeliest sportsbooks to enter the state. The Boston-based operator agreed to a 51% tax rate – the nation’s highest- in New Hampshire in exchange for a de facto monopoly in the state. DraftKings could pursue a similar deal in another New England market.
The other US market leaders, including FanDuel, BetMGM and Caesars, remain as leading candidates due to their financial resources and existing nationwide presence. Penn Entertainment operates a brick-and-mortar casino in the state and is permitted a retail sportsbook under the law, but it remains to be seen if it would seek a tribal partnership to bring its Barstool mobile sportsbook brand into the state.
Churchill Downs operates the state’s other commercial casino and is likewise able to open a retail sportsbook on the property. It has shuttered its TwinSpires mobile sports betting app nationally.
Champion said it was too early in the regulatory process to determine the retail sportsbooks would be eligible to open before the mobile offerings.
Maine could have live retail and mobile sports betting as early as this summer, regulators said today, but we're still not sure which sportsbooks will come to the state
— Ryan Butler (@ButlerBets) January 11, 2023
For online betting, one or more tribes could also instead potentially partner with a third-party tech supplier and launch a sportsbook under their own internal branding, a move other Native American gaming stakeholders have taken in several states.
A self-branded move could also make sense in Maine, where taxes and other restrictions – along with its small population and lack of major professional or collegiate sports teams – could make it one of the nation’s least lucrative markets for larger commercial operators.
Maine will also prohibit tax deductions for promotions and other free bets, another potential blow to commercial operators’ bottom lines. Sportsbooks typically offer millions of dollars in free bets leading up to and shortly after launching in new markets, in part because they can deduct these from their bottom lines.
Additionally, Maine will impose some of the harshest advertising restrictions of any state. Along with banning the use of “free” or “risk-free” bet in marketing materials, sportsbooks will also be forbidden from even mentioning bonuses in any marketing material beyond their internal sportsbook mobile app or website.
New England market grows
Maine is set to be the fifth of the six New England states to take retail and mobile sports bets.
Rhode Island was the first state in the region, and one of the first in the nation, to approve sports betting. It currently only has one legal mobile betting option, Sportsbook Rhode Island, as well as retail books at the state’s two commercial casinos.
New Hampshire also has a lone operator for both mobile and retail sportsbooks, following DraftKings tax bid. Connecticut currently has the most mobile wagering options of any state in the region, with DraftKings, FanDuel and Rush Street Interactive’s PlaySugarHouse all live taking bets. DraftKings and FanDuel have a sportsbook at the Foxwoods and Mohegan Sun casinos, respectively, while PlaySugarHouse has multiple retail books at off-track betting facilities and a handful of other venues.
Massachusetts is set to launch retail sports betting in January and mobile wagering in March. Assuming all 12 online applicants are licensed as expected, the Bay State will have more online betting options than any other state in the region. The state’s three casinos as well as its two simulcast racing facilities can also open retail books.
Vermont is the only New England state not to pass a sports betting bill, though lawmakers concluded a study last month that supported legalization and elected officials could take up legislation during the legislative session underway currently.