One of Maine’s two casinos is arguing the state “blessed a race-based monopoly” by granting the Wabanaki Nations the exclusive right to operate online casino games.

The Oxford Casino Hotel and its corporate owners are suing the director of the state’s gambling control unit to halt the implementation of a new law that legalized “iGaming” in Maine, arguing it could cost the casino millions of dollars.

Gov. Janet Mills allowed LD 1164 to become law without her signature this month, in a move that drew exalting praise from Wabanaki chiefs.

The law opens a new revenue pathway as Maine is poised to become the eighth state to legalize online gambling. It also grants the tribes long-sought entry into the gambling business.

Oxford Casino is challenging that decision in Maine’s U.S. District Court, accusing the state of unlawfully granting a monopoly for online casino gaming.

“Promoting iGaming through race-based preferences deals a gut-wrenching blow to Maine businesses like Oxford Casino that have heavily invested in the state and its people,” the lawsuit, which was filed Friday, reads.

The casino is accusing the state of violating the Equal Protection Clauses of both the United States and Maine constitutions, which prohibit against discrimination based on race, according to the lawsuit.

Oxford Casino employs 364 people, according to the filing. It references a study commissioned by the National Association Against iGaming that found that the introduction of iGaming could indirectly cost Maine 378 lost jobs, $22 million in lost labor income and $60 million in lost value added throughout the economy.

A $200-million-per-year industry could be at stake for the tribes, according to one Wall Street analyst.

Wabanaki Nations won a victory in 2023, when the state granted them the exclusive right to operate sports betting in Maine. The enterprise brought in $66 million in profits last year, which the tribes split with the platform operators.

Mills’ decision this month to allow the iGaming legislation to take effect drew adulation from all five Wabanaki chiefs, despite past skirmishes between the governor and tribal officials. The legislation appeared as though it might break the stranglehold Maine’s only two casinos have on the table-games market.

Passamaquoddy and Penobscot leaders have for decades clashed with the state over their desire to build a casino. The exclusive right to operate internet gaming is not a sanctioned monopoly, they say. Rather, it addresses an existing monopoly on gambling held by the two operating casinos.

“Wabanaki Tribes have been closed out of this market until Governor Mills initially supported the Tribes in Sports Betting and now IGaming,” William Nicholas, chief of the Passamaquoddy Tribe at Motahkomikuk (Indian Township), said in a written statement. “For years out-of-state interests have been enriched in their monopoly and now are attacking Mainers who are here to support and keep Maine economics in Maine.”

QUESTIONING A MONOPOLY

Federally recognized tribes in other states secured the right to operate casinos on tribal land in the 1988 Indian Gaming Regulatory Act. But that law does not apply in Maine, where the state in most cases subjects the tribes to its authority under the terms of the 1980 land claims settlement.

Repeated efforts by the tribes to gain state approval for a casino have failed, dating at least to a 1994 proposal for a casino in Calais.

In 2003, the Passamaquoddy and Penobscot tribes took the matter to voters, and asked to build a $650 million casino in southern Maine. Voters overwhelmingly rejected the proposal.

Yet on the same ballot, they cleared a legal pathway for a “racino,” by granting approval to the addition of slot machines at the Bangor Harness Racing track. That approval launched gambling in Maine onto a slippery slope; within a decade, that “racino” became a full-blown casino with table games. 

In 2010, voters narrowly approved the construction of the Oxford Casino.

To some tribal officials, the whole thing stank of racism. It still sits poorly with them today.

“I think it’s very hypocritical,” Rep. Aaron Dana, who represents the Passamaquoddy Tribe in the Legislature, said of the allegations in the suit.

Dana said the tribe’s exclusive right to operate iGaming is no different than the exclusive rights of the Oxford and Hollywood casinos to operate. And the language is only “race-based” insofar as anything that impacts Wabanaki Nations must name the tribes, he said.

Casino operators have consistently opposed any expansion to tribal gaming in the state, including this latest attempt, on the basis that it will harm them and the economy.

“A new casino in Maine will merely move dollars from one casino to another with little or no benefit to the state,” Jack Sours, then the general manager of the Oxford Casino, told lawmakers in 2019 in testimony to a bill that would have allowed the Passamaquoddy Tribe to operate 50 slot machines.

He submitted the same language in opposition to a slate of similar bills in 2015.

“I think that’s called greed,” said Fred Moore, who represented the Passamaquoddy Tribe in the Legislature from 1995-98, and again from 2003-06.

An attorney representing the casino declined to comment. The governor’s office does not discuss pending litigation, a spokesperson said. A spokesperson for Department of Public Safety, which oversees the gambling control unit, echoed that policy, and added that the department had not received notice of the lawsuit.

Reuben M. Schafir is a Report for America corps member who writes about Indigenous communities for the Portland Press Herald.