AUGUSTA, Maine — The Maine Legislature late Tuesday gave initial approval to a measure that would tax and regulate sports betting while allowing online and mobile sites to operate independently of the brick-and-mortar locations that would be taxed at a lower rate.
Sports betting was made legal by the U.S. Supreme Court last year. Since then, states have raced to set up systems to capture revenue from a market that the American Gaming Association estimated in 2017 would add more than $22 billion to the U.S. economy per year.
In Maine, lawmakers have agreed on allowing sports betting. A legislative panel unanimously rallied around a plan to allow betting for people 21 and older while taxing mobile and online betting revenue at 16 percent while taxing Maine-based facilities such as casinos and off-track betting parlors at 10 percent.
The main disagreement has been whether those sites should be able to get their licenses only by “tethering” — or allying with — in-state facilities such as the two casinos in Bangor and Oxford or the six off-track betting parlors in Bangor, Lewiston, Scarborough, Brunswick, Waterville and Sanford. Most of those facilities lobbied for that requirement in different ways.
Tuesday’s Senate vote broke down on that issue and along geographic lines in a 19-15 vote. Democrats except Sens. Geoff Gratwick of Bangor and Rebecca Millett of Cape Elizabeth backed it and Republicans except David Woodsome of North Waterboro opposed it. It passed without a roll-call vote in the House on Tuesday.
Sen. Louis Luchini, D-Ellsworth, the co-chair of the Legislature’s gambling oversight committee who backed the version of the bill that doesn’t mandate tethering, called it a “more free-market approach” to setting up Maine’s new sports betting system.
“We don’t require Amazon to tether to brick-and-mortar grocery stores,” he said. “We don’t require Airbnb to tether to hotels.”
The Maine bill would enshrine a liberal betting system. Only three states allow mobile betting and one of them — Tennessee — has a mobile-only system because it doesn’t have casinos, so Maine would be the first state with casinos to allow untethered betting. In New Jersey, more than 80 percent of betting has been online, according to The Action Network.
Gratwick and Sen. Scott Cyrway, R-Albion, who represent physical betting locations, led the opposition to Luchini’s version of the bill on the Senate floor on Tuesday, arguing that the in-state facilities that employ Mainers should be protected further than the lower tax rate.
“This money would all go out of state to out-of-state companies with no investment here,” Cyrway said of the online and mobile betting sites.
The tax rates proposed in Maine are moderate compared to other states, which range from 6.75 percent in Nevada to 51 percent in Rhode Island, according to the Tax Policy Center. Maine’s Gambling Control Unit has said the state could get between $3.8 million and $6.9 million in annual revenue from it, though that assumes a flat 10 percent tax rate.
For a roundup of Maine political news, click here to receive Daily Brief, Maine’s only newsletter on state politics via email on weekday mornings.