Updated: July 29, 2024
Maine’s gamble on sports betting may be paying off — but Olympics play a wild card
In the eight months since it began, Maine's legalized sports gambling market has seen some big action.
But the odds of long-term success? Too early to call it a sure thing. And one of the unknowns is the impact of the Olympic Games now underway in Paris.
So far, though, Maine's rookie year of sports gambling has turned out impressive-sounding numbers.
From last November through June 30, bettors wagered a total of $319.3 million via Maine's two legal sportsbooks — and pocketed $284.7 million in payouts, according to records from the Department of Public Safety's Gambling Control Unit.
The biggest month of betting to date: March, when a total "handle" of $47.5 million was wagered. Not coincidentally, March was when dozens of college basketball games tipped off in season-crowning national tournaments.
From November through June, state tax revenue on sports betting totaled over $3.2 million. For the first half of 2024 alone, the total was $2.3 million.
Ironically, March was the month when tax coffers took in the least — $270,000. The handle was up, but bettors were more successful, winning more than in previous months and leaving the state with less.
Regardless of the ups and downs, the Gambling Control Unit's executive director, Milton Champion, is pleased with the in-progress performance of Maine's sports betting market.
Before its launch, he had cited a study predicting annual state revenue of $3.8 million. Another analysis predicted $6 million. Now Maine is looking at around $4.6 million in taxes for the first full year of sports betting, he said.
"We're in the middle range," he told Mainebiz recently. "Hopefully we can get a little closer to the $6 million projection."
But as the March results show, it all depends on the vagaries of chance.
"That's the way it is," he said. "You have winners and you have losers. And in some of those months, Mainers have been picking winners."
A long-shot start
For decades, you had few options if you wanted to place a legal bet on your favorite team. A 1992 federal law effectively outlawed sports betting nationwide, except in Nevada and a few states with narrow allowances.
That changed in 2018 when the Supreme Court overturned the law, letting states decide for themselves whether to permit sports betting.
In Maine, there was widespread opposition. A bill to legalize sports betting was vetoed in 2020 by Gov. Janet Mills. By then, other states were already changing their laws and cashing in.
(New Hampshire's legalization in 2019 created problems for Granite State residents who used a mobile betting app near the Maine border. Initially, the app was unable to spot the location of users in order to determine whether they could place bets legally.)
In 2021, Mills vetoed legislation that would have allowed casinos run by the four federally recognized indigenous tribes in Maine. The odds of more gaming seemed remote, some Mainers feared.
However, in 2022 the state did legalize sports betting, with Mills signing a new bill that gave control over the online form of it to the tribes.
The sweetener for the legislation was a 10% state tax on the hold — the receipts after the sportsbook pays winning wagers, takes out federal taxes and makes adjustments such as deductions for voided bets. Most of the tax revenue goes to the state's General Fund.
On Nov. 3, 2023, Mainers began placing bets via two mobile platforms contracted by the tribes. DraftKings (Nasdaq: DKNG), headquartered in Boston, operates the online action for the Passamaquoddy Tribe, while Nevada-based Caesars Entertainment (Nasdaq: CZR) works for the Houlton Band of Maliseet Indians, Mi’kmaq Nation and Penobscot Nation.
Maine is now one of 38 states, including all those in the Northeast, that allow gambling on athletic events.
The Olympic effect
With the start last week of the Paris Games, some oddsmakers are optimistic about the Olympics' impact on sports betting. But it's tough to size up the handle.
Bets on the Games are projected to exceed $500 million in Europe alone, with 80% of the wagers being made through mobile devices, according to betting website Oddstrader.com. Estimates for the U.S. vary widely.
However, a recent survey by Seton Hall University's Stillman School of Business found that 15% of the U.S. population plans to bet on events at the Paris Olympics. To put that in context: 20% of Americans planned to bet on February's Super Bowl, according to a similar poll by Seton Hall.
“The [2024] Olympics open up a lot of possibilities,” said Kevin Hennessy, a spokesman for Fanatics Sportsbook, in an interview last week with trade publisher Front Office Sports. “Patriotism, nontraditional sports, and star-studded teams, especially in basketball, lend itself to an exciting couple of weeks.”
The Games also come at a time of year when sports gambling is usually at its slowest. Will they be enough to help Maine's market get through the summer doldrums?
Champion is hedging his bets.
"Will it be an offset? I'm not sure. That remains to be seen," he said. Sports bettors don't have the same interest in Olympic teams as in the NFL or the NBA, he explained.
"Personally, I have no clue who the participants [in the Olympics] are, so I think it's going to be interesting to see how they play out."
Another expert is more pessimistic.
"I don't think the Olympics will boost gambling very much," said Jay Zagorsky, a professor at Boston University's Questrom School of Business who has studied sports betting extensively.
He cited the reasons in an email to Mainebiz. Timing is part of the problem, he explained. People prefer to bet on games while they're in progress, and the Olympics don't offer much real-time opportunity. And like Champion, he feels Team USA's unfamiliarity to bettors will deter them from wagering.
Zagorsky also pointed to "great betting statistics" from England showing there was no change in gambling tax receipts there during the past 10 Summer Olympics — a period of 40 years.
"In general," he told Mainebiz, "I expect the Olympics to make a big impact on the hearts and minds of millions of fans, but have little impact on the gambling industry's bottom line."
Meanwhile, both DraftKings and Caesars are taking bets on the Games. According to the latest odds, Team USA is the -2,000 favorite to win the most medals and -550 to bring home the most golds.
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