Last week, Maine lawmakers caught the iGaming industry off guard when a proposal to permit online casino games, which was proposed in March, moved forward from the Veterans and Legal Affairs Committee.
The joint standing committee’s report on the iGaming initiative, Legislative Document 1164/House Paper 769, now advances to the House of Representatives and Senate for comprehensive evaluation. The actions of the Veterans and Legal Affairs Committee were unexpected, given that the same committee had tabled the online casino statute in March before the Legislature's adjournment on March 20.
Following Gov. Janet Mills (D) calling a special session after the Democratic majority swiftly approved a two-year budget plan without the usual two-thirds majority, discussions about online casinos reignited as a potential source for new tax revenue.
The special session began on March 27 and is scheduled to continue until at least June 18.
Evaluating Maine's iGaming Industry
Currently, just seven states permit online casinos to function within their territories — Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia. In June 2023, Rhode Island became the final state to permit iGaming.
In contrast to Pennsylvania, Michigan, and New Jersey, which boast sizable populations, Maine has a population of only 1.4 million residents. That results in a rather limited potential tax advantage.
The fiscal office of the Maine Legislature estimates that the state could collect $1.8 million in the 2025-26 fiscal year and $3.6 million in the subsequent fiscal year from iGaming and a 16% tax on gross revenue — mere pennies compared to the $11.63 billion budget that the Democrat-majority Legislature forwarded to Mills.
LD1164 would grant the Wabanaki Nations — Maine’s four federally recognized tribes — the sole rights to iGaming. If the iGaming bill is approved by the Legislature and signed by Mills, the Maliseet, Micmac, Passamaquoddy, and Penobscot tribes would be permitted to collaborate with one online gaming company, with FanDuel, DraftKings, and BetMGM among the potential partners.
The four tribes currently hold the exclusive rights to conduct online sports betting in Maine. To prevent oversaturation, three tribes partnered with Caesars Sportsbook and divided the revenue. The Passamaquoddy have formed a partnership with DraftKings.
Chances Continue to Be Slim
Given the negligible potential tax advantage at the suggested 16% rate on iGaming gross gaming revenue and strong resistance from the state’s land-based casino operators — Penn Entertainment and Churchill Downs — it seems improbable that Maine will enter the online casino market.
Penn and Churchill, which operate Hollywood Casino Bangor and Oxford Casino Hotel respectively, claim that iGaming would take play away from their venues. This would result in decreased GGR and various property revenue, consequently predicting 400 job losses and up to $67 million in lowered yearly state tax revenue.
Mills has consistently voiced his stance against increased gambling. Although the governor approved the state’s 2022 bill granting tribes online sports betting rights, she vetoed a law the previous year that would have permitted Native American communities to establish gambling enterprises on their tribal lands.