Managing Editor
Last week, the federal court for Maine approved a motion by the Wabanaki Nations to interevene in a lawsuit challenging the state’s new online casinos. Under that law, which passed in January, the four tribes comprising the Wabanaki Nations will hold the exclusive rights to conduct iGaming, with terms similar to the state’s existing online sports betting model.
Many had expected Gov. Janet Mills to start the year by vetoing the bill, which had carried over from the previous legislative session. Instead, she abstained from action, allowing it to become law without her signature, after having been persuaded of its economic importance to the tribes. One of the state’s two casinos — the Oxford Casino in Bangor — filed suit a few weeks later.
The lawsuit targets Milton Champion as the defendant, in his official capacity as the Executive Director of the Maine Gambling Control Unit. It claims that the law violates both the Maine and U.S. Constitutions. Specifically, it focuses on the “race-based” aspect of the tribal gaming monopoly, which it argues is discriminatory and violates constitutional equal-protection clauses.
Oxford Casino’s interest lies more in protecting its retail business than in a desire to participate in the market. In the complaint, it states that it believes that “no entities should be allowed to offer iGaming in the State of Maine,” but that, given the law has passed, it would apply for a license if able to do so. Its parent company, Churchill Downs, already had an iGaming product at one time, but found it economically unviable. After changing the name from BetAmerica to TwinSpires, it shut down its online casino and sportsbook in 2022, leaving only a parimutuel racebook.
Maine Tribes Will Not Seek to Quash Suit
Similar cases have arisen in other states and have not generally proven successful. However, the situation in Maine is unique, due to the Maine Indian Claims Settlement Act of 1980. Most federally-recognized tribes have sovereign status and interact with state governments only through compacts. However, the Wabanaki Nations agreed to a more limited degree of sovereignty to settle a long-running land dispute and are subject to state law.
The unique position of the Wabanaki Nations may explain why they’re intervening as full parties to the case, rather than seeking to quash it.
In other, otherwise similar situations, tribal sovereign immunity has allowed tribes to prevent cases from proceeding at all, using a sort of legal Catch-22. The most notable of these was the Shoalwater Bay tribe’s successful intervention in Maverick Gaming v. United States et al.
That case saw Maverick — a Washington cardroom operator — suing a number of state and federal officials over the decision to allow a tribal monopoly on sports betting.
Shoalwater argued successfully that the government officials could not adequately represent its interests in the case, which could therefore not proceed without its participation. However, it declined to waive its sovereign immunity, so it could also not be dragged into the case by Maverick. That meant the case could neither proceed with nor without the tribe, and had to be dismissed.
It’s possible that the limited sovereignty of Maine tribes would have interfered with that strategy. It’s a moot point, however, as the Wabanaki Nations have promised not to take that tack. The motion to intervene states that Oxford Casino has agreed not to oppose the motion on certain conditions, one of which is that the tribe will not seek dismissal using the Federal Rules of Procedure pertaining to “required parties” for a case.
Lawsuit Could Delay Market Launch
The Maine online casino market was originally expected to open sometime this summer or early fall. That timeline may still be possible from a technical and regulatory standpoint.
However, it is quite likely that one of Oxford Casino’s first moves in the case will be to request a preliminary injunction to block the launch of the market until the case is resolved.
That, in itself, could be a process that drags out for several months if appeals are involved. The underlying case, if not quickly dismissed, could go on for years.
That said, it is far from a given that a preliminary injunction would be granted. Whether it is or isn’t also provides a strong indicator of how the case itself will go. In order to grant such an injunction, a court must find that the requesting party has a “reasonable” chance of success. In other words, refusal to grant the injunction would imply that Oxford Casino is likely to lose the case, while granting one would indicate that the court sees merit in its arguments.
