Regulators: Maine Legal Sports-Betting Launch Q&A With MGCU’s Milton Champion
Executive Director of Maine Gambling Control Unit (MGCU) Milton Champion spoke with GamblingIndustryNews.com about the long road to legal sport betting in Maine and the impending industry launch:
The newly published draft rules on sports betting in Maine seem to be quite comprehensive. It’s great to see a big focus on responsible gaming and significant punishments for rule-breaking operators. Tell us about the process and inspiration for rules.
MC: Well regarding inspiration for rules, I read an interesting article recently that suggested that Maine had borrowed most of Canada’s regulatory framework when drafting our sports wagering rules. But actually we took inspiration from everywhere — Ontario, the UK, various European markets, and of course, many of our neighbors here in the US.
There are quite a few US sports betting markets that are now considered mature and seeing how they regulate their industries was quite helpful.
You have a highly relevant background in gaming. How has your previous work in the industry prepared you for your current role and the drafting of sports wagering rules?
MC: I’ve been in this industry for 36 years, 20 of which were spent in the casino industry itself. For the last 16 years I’ve been on the regulator side in Florida and now here in Maine.
Those first 20 years have helped me a great deal as I now understand both sides of the coin when it comes to gaming and regulation of the market.
My experience in the casino industry has also taught me that rules need to be hyper-specific and very detailed. This is why we invested so much time and effort into the sports wagering draft rules and why we’re going to listen very carefully to the comments at the public hearing.
I’ve also learned that we need to embrace whatever technology is out there that can help us. And that goes for both regulator and operator.
Perhaps some might think that my approach is overkill, but it all goes back to being specific in some areas.
What are you hoping to achieve at the public hearing?
MC: January 31st is to get public comment. This is not a time for debating any of the rules, we simply want to get the public’s opinion on the draft rules and the industry in general so we can do this right for people in Maine. Any input we receive from the public must have a response in the form of a basis statement by APA standards and if we disagree with a suggestion, there must be an explanation in the basis statement. The feedback we receive will also help us determine our needs in terms of both staff and technology within the Gambling Control Unit.
There are some quite strict rules on advertising, can you tell us a bit more about those?
MC: Well, let me start by saying that we’re not flashy in Maine by any means. As an example, If you drive on our highways we don’t have big, huge billboards like other states; we’re a low key state. So we’re not into the glitz and the glamor like maybe some other locations are. With this in mind, advertising is just something that we don’t want to be inundated with.
The way we see it is that if you’re a sports bettor and have a TV, a computer or a mobile phone, then the chances are you already know quite a bit about the industry and everything that’s on offer.
I don’t think we need to have all this influx of advertising. I honestly think there’s no rhyme or reason for this big onslaught of advertising, and in some cases we’ve found in other states that it’s landed the industry in trouble. Whether they’re inadvertently advertising to an underage audience or they’re offering promotions and free bets that are not permitted, we just want to remove the possibility of that happening here in Maine.
Our position is this; don’t be out there crushing the airwaves offering a free this, free that, or bonus, just advertise your brand and keep it at that. Good brands don’t need to advertise free bets and promos.
So you’re taking a hard line on promotional credits and free bets?
Yes, unlike other states that offer credits for promotion expenditure, here in Maine that’s not the case. They still have to pay their taxes on the revenue regardless of how many promotional bets are handed out. They pay 10% on the gross wagers, minus the federal tax. There’s no credit for freebies and promotions and all this other stuff.
From a business perspective, it won’t make sense for the sportsbooks to have all these giveaways so it’s unlikely that any of the operators will breach the rules on advertising.
The proposed rules prohibit celebrities and athletes from promoting sports betting services. This is understandable for athletes, but why has the state opted to also take such a strict line on celebrity endorsements?
MC: Regardless of whether it’s an athlete or a celebrity, what you’re inadvertently doing is reaching out to people under the legal gambling age of 21.
When you have celebrity endorsements particularly where free bets and promotions are concerned, there’s always the chance that you’re enticing younger people to get involved in gambling and that’s not right.
We also have to consider the fact that the legal age for fantasy sports in Maine is 18 and there are very close links between both industries. So that’s another reason why we need to be so tough on this. We don’t want operators who may offer both services to unintentionally promote sports betting to fantasy players.
Should the rule stand after public hearing and written comments then it could be a violation every time it is shown on Maine TV.
Can we talk about affiliates for a moment? Will they need to apply for a gambling services vendor license to promote regulated sportsbooks in the state?
MC: Yes and I’ll tell you why. If an affiliate doesn’t have a license and they breach the rules on advertising, the Gambling Control Unit has no authorization to reprimand them as they are not licensed.
If these people are going to advertise or promote sports betting in any way, they’ll be held to the same standard as licensed operators.
In some states we see licensed affiliates promoting regulated operators, and unregulated ‘offshore’ operators on their other websites quite openly… How would MGC deal with things like this?
MC: Offshore sites and illegal operators will always be an issue. But while we can’t do a whole lot to stop offshore sites from accepting registrations from Maine, we can certainly prohibit licensed affiliates from promoting them.
We’re planning to set up a sports wagering analysis unit that will keep an eye on all of these things using the latest software and tools. We have also just hired a sports wagering inspector who will oversee this.
Speaking of fines, 2022 saw gambling regulators issue more than a quarter of a billion dollars in fines ($269,532,490) which is a 443.9% increase on the previous year. In 2023, we’ve already seen regulators in Ohio penalize operators who seem to have completely ignored the state’s strict rules on promotions. Do you think that the fines are enough of a deterrent?
MC: Welcome to the highly regulated industry of gambling. Keep in mind sports wagering is only 5 years old. I’ve seen people lose their jobs due to compliance oversights that led to fines. So I think that on a personal level, employees at sports betting companies won’t want to be the one that brought the house down.
Then there’s the fact that more negative reporting and more alleged violations isn’t a good look for the business or the industry in general.
We’re seeing quite a lot of negative press surrounding fines imposed on operators and that most of that negativity has been directed towards the operator. If 35 states stick to their oversight, continuing fines should be rather costly.
It’s great to see a focus on responsible gaming in the draft rules, can we expect anything different from Maine in that regard?
MC: It’s a very important aspect of the industry for us and going forward I’ll be looking at possibly incorporating a universal exclusion program. As it stands now, you’ll need to self exclude from sports wagering, fantasy sports and casinos through separate programs.
Of course, this will require legislative changes, but it is something that we are looking into for the future.
Do you expect the Maine sports betting industry to generate a lot of revenue?
Maine is a big state, but we’ve only got a population of 1.3 million. Of course, the big events such as the Super Bowl and March Madness will be busy times for sportsbooks, but I’ll be interested to see how the summer season goes. This is when a lot of out-of-staters come for vacations and I genuinely believe that tourism will have an impact on both retail and mobile sports betting revenue. In fact, I’ll be surprised if it doesn’t.
We’re not going to hit the numbers that some of our neighboring states do, but I think that our approach to tax credits for promotional play will allow us to generate a steady stream of tax revenue for the residents of the state.
What about online casino gaming for Maine? Is it a possibility?
MC: Anything is a possibility, but yes, we have included provisions for iGaming in the sports wagering bill. Those provisions state that if iGaming is legalized, local tribes will have the same rights as any other person or entity to obtain a license to conduct mobile gaming.
Now that the furor around sports wagering is dying down a bit, I can see a lot of states pushing through online casino bills as gambling is becoming a much more mainstream activity.
Do you think that being one of the later states to launch has benefitted Maine?
MC: Oh, absolutely. We introduced the first bill in 2019, and we were going to be the sixth state to launch. Obviously that didn’t happen, but that’s probably a good thing as it has certainly given us plenty of time to nail down our rules and learn from the approaches that other states (and countries have taken).
We also have a very small staff compared to other states so the extra time to launch has obviously helped a lot in this regard too.
Is there anything about the industry that you’d like to see change?
MC: Personally, I would rather see money funneled into data protection and security. That’s what people are more worried about. They don’t care about the free bets in the long-term. What they really want is to know that their username, password, address, phone number, email, bank statements, social security number, all that data is not vulnerable to being hacked.
That’s another reason why we’re trying to limit the promotional side of things in Maine. We hope to encourage sports betting operators to invest more in data security.
What do you think would be a realistic timeline for launch?
MC: Since the Governor signed the bill back in May of 2022, I’ve been saying all along, somewhere between April, 2023 and January, 2024.
Ideally we’d like to have a soft launch at some point during the quieter summer months of June or July so we could make sure that all the systems are up and running smoothly.
I certainly don’t envisage a launch on the eve of the Super Bowl or March Madness. That’s not a sure thing though as the public hearing on January 31st will shed a lot of light on how the industry develops in Maine.
Key Points
- Maine rules inspired by learnings from other markets & jurisdictions, and experience.
- Legal sports-betting launch between April, 2023 & January, 2024.
- Affiliates must be licensed, subject to same rules as operators
- Advertising restrictions: “Good brands” shouldn’t need to tell consumers about free bets + promos.
- Fines + resulting negative press “should work in the long run” for rule-flouting operators
- Looking at universal self-exclusion for RG in future
- MGC approach to tax credits for promotional play allows consistent tax revenues streams
- iCasino in future possible – with Tribal suppliers
