AUGUSTA, Maine — Sports betting is likely to advance in Maine in 2019 after a bipartisan group on a legislative panel came to a deal Friday on taxing and regulating the industry, though a split lingers on tying licenses for online and mobile betting sites to Maine-based facilities.
Seven states — including Rhode Island — and the District of Columbia have set up sports betting systems after the U.S. Supreme Court opened up the national market in a 2018 decision. Maine missed the initial wave because a part-time Legislature didn’t have time to advance it last year.
It was a key 2019 priority of the Legislature’s gambling committee, which agreed Friday to tax online and mobile revenue at 16 percent while taxing Maine-based facilities such as casinos and off-track betting parlors at 10 percent and on most other specifics of regulating the industry.
However, the committee split 5-3 on whether to force online or mobile sports betting site to get licenses only by allying with in-state locations, a provision backed in different ways by off-track parlors and the parent company of Hollywood Casino in Bangor, but opposed by DraftKings.
Five members — three Democrats including panel chairmen Sen. Louis Luchini of Ellsworth and Rep. John Schneck of Bangor alongside two Republicans — voted for a version that didn’t include a so-called “tethering” provision. Two Republicans and one Democrat backed tethering.
The majority group argued on Friday that tying online licenses to physical locations would be an unnecessary barrier to market entry and that the difference in taxation on sports betting revenue was aimed at favoring Maine businesses over providers that don’t pay property taxes here.
“There is a ton of online mobile businesses that operate in the state that have no ties to brick-and-mortars. It has been completely legal up to this point,” said Rep. Scott Strom, R-Pittsfield. “Nobody has ever asked them to tie to a brick-and-mortar, Amazon being the biggest.”
However, the three states that allow mobile betting tie it to physical locations, though Tennessee recently passed a mobile-only sports betting law. Don Berberino, who runs off-track parlors in Waterville and Sanford, told the panel that not tethering could “freeze out” physical locations.
Rep. Sheldon Hanington, R-Lincoln, voted with the minority group and urged the committee to punt the sports betting legislation to the 2020 legislative session, saying he’d “like to see the industry prove itself” and that Maine-based businesses should be protected.
The tax rates endorsed by the Maine committee on Friday are reasonably moderate compared to those in other states where sports betting systems are set up. They range from 6.75 percent in Nevada to 51 percent in Rhode Island, according to the Tax Policy Center.
The Maine market is expected to be perhaps the smallest that has been set up in the nation, with Milton Champion, the executive director of the state’s Gambling Control Unit, saying the state could realize at least $3.8 million in annual revenue once the law is implemented.
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