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Maine’s state lawmakers are considering three bills to expand tribal gaming to include internet gaming, casinos, historic horseracing and electronic beano, amid strong opposition from commercial casinos and the state gambling regulator.
The three bills, which carried over from the 2023 legislative session, were on the agenda Wednesday (January 3) of the Joint Standing Committee on Veterans and Legal Affairs on the first day of the second period of the 2023-24 legislative session.
The committee only heard testimony on Legislative Document 1777, a bill sponsored by Representative Laura Supica, a Democrat and co-chair of the committee, which would grant exclusivity to federally-recognized tribes in Maine to offer iGaming across the state.
Public hearings on LD 1944 (casino operations) and LD 1992 (historical horseracing machines and electronic beano) were canceled and will be rescheduled after the State House was evacuated in the afternoon over an emailed bomb threat. State Police and Capitol Police cleared the building, according to media reports.
Maine Capitol Police said the threat was part of a wide-scale threat involving several states.
Under Supica’s bill, only the state’s four federally-recognized tribes would be licensed to offer internet by the Maine Gambling Control Unit. The state’s four tribes are the Aroostook Band of Micmac Indians, the Houlton Band of Maliseet Indians, the Passamaquoddy Tribe and the Penobscot Nation.
Under legislation passed in 2022, the four tribes have exclusivity over mobile sports wagering in Maine, although they do not offer any form of land-based casino gaming.
In her testimony on Wednesday, Supica reassured her colleagues that revenues from iGaming would not only benefit the tribes but all of Maine. She added that her bill was not about giving the tribes a “handout; they need a hand up.”
“This legislation is not just about gaming,” Supica said. “This legislation allows the tribes in Maine to have access to unencumbered resources to invest in their communities and rural Maine.”
The fee for an initial four-year or renewed iGaming license would be $200,000.
Supica would also reprioritize how the state uses its tax revenue from online gaming. Currently, most of the taxes from gaming go to the General Fund, while the state’s Sire Stakes Fund and the Maine Harness Racing Commission each receive an equal portion of revenue.
Under her bill, iGaming would be taxed at 10 percent, with the state’s E-9-1-1 Fund receiving 4 percent of revenues to support emergency communications, 2 percent for the Opioid Use Disorder Prevention and Treatment Fund, and 2 percent to the Emergency Housing Relief Fund.
The state would continue to receive 1 percent to regulate and oversee gaming and 1 percent for its Gambling Addiction Prevention and Treatment Fund.
Supica's iGaming bill is opposed by Steve Silver, chairman of the Maine Gambling Control Board (MGCB), who described the exclusion of the state’s two commercial casinos — Churchill Downs' Oxford Casino and Penn Entertainment's Hollywood Casino — from offering online gaming as “ill-advised”.
Among Silver's objections to the bill are the low tax rate, the lack of MGCB oversight of iGaming, language that would effectively eliminate consumer sweepstakes and business promotions in Maine, as well as concerns over potential cuts in education funding, job losses and increased gambling addiction.
Silver said in written testimony submitted Wednesday that the bill essentially copies the 2022 LD 585, which, in part, legalized sports betting.
However, wagering on sports is “dramatically different” from iGaming and requires different regulatory, licensing and taxation schemes, according to Silver.
Per Supica's bill, the licensing structure for iGaming follows the law governing sports betting. Supica also seeks to amend the sports wagering law to remove mobile sports betting, which LD 1777 would instead regulate as a form of iGaming.
Silver argued that the 10 percent tax rate made sense for sports betting given that it is a low-margin offering.
But there is already a precedent for taxing different gambling products at different rates, with Maine casinos offering a variety of games from slot machines to table games, and “this is why Maine has a tiered taxation structure for casinos,” he said.
Hollywood Casino pays a 40 percent tax on slot revenue and a 16 percent tax on table games. Oxford Casino pays a 46 percent tax on slot revenue and a 16 percent tax on table games.
“Yet, LD 1777 proposes a flat 10 percent tax with no differentiation between slots and table games,” Silver said. “This is improper and irresponsible to the citizens of Maine who will lose out on the missed tax revenue.”
Attorneys representing Churchill Downs and Penn Entertainment also testified in opposition to LD 1777.
“This would be the largest expansion of gaming in the state’s history without a doubt, and with no vote of the people,” Chris Jackson, representing Penn, testified on Wednesday. “I don’t think the people of Maine would support this … if it would go to a vote.”
Seven states have legalized iGaming — Delaware, Connecticut, New Jersey, Michigan, Pennsylvania, Rhode Island and West Virginia — while Nevada has online poker only. Penn operates iGaming in five states along with its brick-and-mortar casinos.
Jackson said Penn is not inherently opposed to iGaming, but opposes LD 1777 as written.
“It might be a different issue if opened up,” he said. “We certainly would be opposed to [tribal] exclusivity.”
Maulian Bryant, ambassador for the Penobscot Nation, testified in favor of Supica’s bill, but said that expansion should be properly regulated.
She said the tribes had experienced no problems since mobile sports betting was launched in November and would be open to revising the tax rate, but any increase would have its limits.
Representative Ben Collings, a Democrat, introduced the two other measures that will be considered by the committee at a future date.
LD 1944 would require the state to negotiate with one or more tribes interested in establishing a casino on tribal lands.
The state could also negotiate with all federally-recognized Indian tribes for a license to operate a casino on non-tribal lands in any county other than Penobscot and Oxford counties, which host the two commercial casinos.
Meanwhile, LD 1992 would legalize electronic beano terminals and historical horseracing machines, which would be operated by federally-recognized tribes, off-track betting facilities, commercial tracks and casinos. Both types of machines would be taxed at 10 percent.
