The turn of the new year signified a notable achievement for the sports betting industry in Maine. While the total amount wagered on sports, also known as the handle, witnessed a slight downturn in January to $38.1 million, falling 13.4% from the $44.0 million posted in December, it still managed to surpass November’s inaugural figure of $37.6 million by a slim margin of 1.3%. This is particularly noteworthy considering that November marked the first month when legal sports betting became operational in the state.
The true highlight for the month, however, was seen in the sector of adjusted gross receipts which soared to a striking 25.0% increase over December’s numbers, reaching a sum well beyond the $4.4 million recorded in the final month of the previous year. Comparatively, it also outperformed November’s opening figure by an impressive 19.6%, casting a promising light on the industry’s financial health and trajectory.
It is important to elucidate that the adjusted gross receipts are not mere turnover figures. These are calculated after accounting for the stakes refunded due to voided and canceled bets, deducting the sum paid out to the winners, and also after excluding the fractional 0.25% federal excise tax assessed on betting services. This metric is a more accurate reflection of the net revenue earned by the sports betting operators and is closely monitored by industry stakeholders.
The strong performance in adjusted gross receipts had a direct impact on the state’s coffers, with January witnessing a total tax due of $546,099. Sporting a tax rate of 10.0% on these adjusted gross receipts, the state’s take is a direct outcome of the betting activity and the resulting profitability of licensed operators.
At present, Maine sports bettors have access to wagering services through two state-sanctioned operators, namely DraftKings and Caesars, both bolstered by strategic tribal partnerships. These alliances are in line with the stipulations of Bill LD 585, which was ratified by Governor Janet Mills in May 2022. This legislation permits retail and online wagering but restricts internet sports betting to approved tribal entities. These tribes have the opportunity to seek licenses for online betting and to align with only one online operator each.
The partnership helmed by DraftKings, in conjunction with the Passamaquoddy tribe, seized a dominant share of the market in January. The collaboration reaped an impressive $4.7 million in adjusted gross receipts from a substantial handle of $32.1 million.
On the other hand, Caesars works in concert with three constituents of the Wabanaki nations—specifically the Houlton Band of Maliseet Indians, the Mi’kmaq Nation, and the Penobscot Nation. This collaboration resulted in $743,762 in adjusted gross receipts, stemming from a total monthly handle of $6.1 million.
In related advancements, lawmakers in Maine are slated to deliberate on new proposals that could potentially afford tribes exclusive privileges in the domain of internet gaming, aspiring to create an extension of the existing model established for sports betting. Advocates of this initiative aim to replicate the success and regulatory framework of sports betting, wherein only tribes who secure suitable agreements are granted the right to conduct online sports wagering.
In summary, while the overall betting handle witnessed a slight decline at the onset of 2023, the state of Maine has been buoyed by the substantial growth in adjusted gross receipts from its sports betting activity in January, painting a robust picture for this burgeoning sector. The future of sports betting—and potentially online gaming—seems to be firmly rooted in the collaboration between state legislators and tribal entities, setting a precedent for a mutually beneficial partnership in the lucrative world of legalized betting.
