Maine’s recently released draft sports-betting regulations have caused television stations and gaming tribes to push back on proposed strict limits on ads outside live sporting events and bans on advertising of promotions and bonuses.
According to the draft sports-betting regulations released earlier this month, television advertising may only take place during an event and only on the channel that the event is being telecast when wagers on that event are offered by a licensed operator in Maine.
All television advertising could also not include any mention of promotions or bonuses.
Tim Moore, president and CEO of the Maine Association of Broadcasters, expressed his concern that several of the proposed rules would severely limit the ability of local broadcasters to exercise their free-speech rights under the First Amendment to the U.S. Constitution to advertise that will soon be legal sports wagering in the state.
“The proposed advertising restrictions also single out advertising on television, which is unreasonable and inequitable because they do not apply to competing media, including all online media,” Moore said during a public hearing on Tuesday (January 31) hosted by the Maine Gambling Control Unit.
In addition, Moore said, one of the proposed rules would disrupt business agreements that local television stations already have with their networks.
Other proposed regulations would require operators to provide electronic copies of all advertising, marketing, and promotional materials developed by or on behalf of the operator to the control unit’s director ten business days prior to publication or airing.
Promotion or advertising of sports betting in or on any Maine colleges or universities through the use of physical media would also be banned, while flyers, handouts, or in-person account sign-ups would be prohibited.
Maine is also proposing to require a record of all promotional or bonus wagering offers to be limited to websites and apps and maintained in an electronic file that is readily available to the director or their designee.
“As an overview, the First Amendment provides significant protection to commercial speech … including advertising on broadcast stations,” Moore said.
Moore cited the case of the Greater New Orleans Broadcasting Association v. U.S., in which the U.S. Supreme Court ruled more than 20 years ago that a federal law restricting broadcast advertising of casino gambling could not constitutionally be applied to radio or TV stations located in states where casino gambling was legal.
“Because sports wagering will soon be legal in the state of Maine, the truthful, non-misleading advertising of sports betting will receive First Amendment protection, and courts would likely strike down rules substantially restricting that advertising,” he added.
Moore was joined in his opposition to the proposed advertising and promotions regulations by William Nicholas Sr., chief of the Passamaquoddy Tribe at Indian Township.
“Marketing and advertising are extremely important to the success of any business,” Nichols said. “However, such efforts are even more important when a business has no brick-and-mortar location or when it does not sell a tangible item that serves as vehicles for promotion.”
In accordance with state legislation passed last year, the Passamaquoddy tribe’s business will be entirely mobile and it must be able to effectively promote itself in order to succeed, Nichols told the Maine Gambling Control Unit during his testimony on Tuesday.
“Yet the draft Chapter 64 would place absurd limits on the ability of our business to market itself,” he added, referencing the proposed advertising restrictions. “These limits will hamper our ability to generate revenue, which will in turn hamper tax income to the state.”
Estimates on how much tax revenue sports betting would generate for state coffers have varied from $3.8m to $6.9m. Milton Champion, executive director of the state’s Gambling Control Unit, said previously that looking at how well sports betting has done in New Hampshire, Maine should be close to $5m annually.
“We can all agree that certain forms of marketing should be prohibited,” Nichols said. “Marketing should not be directed to people under 21 or to those with gambling problems. But these rules make it practically impossible to market in any meaningful way, to anyone.”
Moore added that there was significant concern among commercial broadcasters regarding the regulations in Chapter 64, titled Advertising and Promotions.
“The state should be under no illusion that Maine broadcasters would not be willing to vigorously advocate for the First Amendment,” Moore said. “We intend to be resolute in our determination to be treated legally, reasonably and equitably with regard to sports wagering in Maine.”
Chapman did not respond to the concerns Moore or Nichols expressed during their testimony, except to thank everyone for their participation in the public hearing.
Once the rules are finalized, they will be sent to the state attorney general, who will have 120 days to sign off on the regulations before they are forwarded to the secretary of state for final approval. That means should they finalize the proposed regulations with only minimal revisions, the first sports-betting licenses in Maine could be issued as soon as April.
Nicholas also testified that authorizing the federally-recognized tribes in the state to conduct mobile sports betting is “fair and equitable” because those tribes previously have been excluded from conducting most forms of gaming in the state.
“Yet, for some reason, the draft rules … do not mention tribes in connection with mobile sports wagering despite our exclusive right to operate in this arena,” he said. “In no way do the draft rules account for the fact that we are sovereign nations with a special political and economic status with the state of Maine.”