BND: Maine lawmakers push for more casinos

By Nick McCrea:

A study commissioned by the Legislature and released last year has prompted lawmakers to propose several bills that would allow more casinos to join those in Bangor and Oxford, despite opposition from officials representing the two existing facilities.

LD 1346, An Act to Establish a Comprehensive Gaming Policy, proposed by Rep. Diane Russell, D-Portland, would allow the state to issue two new casino licenses, one in York or Cumberland county, and a second in Penobscot, Washington or Aroostook county. That bill was up for a public hearing on Monday, along with seven others that propose casino or gambling expansion in Maine.

The bill responds to a $150,000 report released in the summer of 2014 by WhiteSand Gaming, which argued that Maine could support two more casinos — one in the south and a smaller one in the north. The report also suggested the state decrease taxes on existing casinos if more casinos enter the market to reduce the hit to their budgets.

That news was applauded by some state lawmakers, who see gaming expansion as an opportunity to boost state revenue through fees and taxes on winnings from more casinos.

Multiple Bangor- and Oxford-area officials spoke out against the gaming expansion proposals, arguing that expansion should be up to local and regional voters, as theirs were, and further gaming could cut into their casinos’ success, stunting continued development in their communities and putting badly needed jobs at risk.

“We have real concerns about how fragile and how saturated the gaming industry is in Maine and in New England in general,” said Mike Mahoney, representing Hollywood Casino. He said several proposals to open new casinos in Massachusettsand New Hampshire could further limit Maine’s casino traffic.

Hollywood, the state’s first casino, recently asked Bangor for a nearly $37 million reduction in its property valuation because of a decrease in business and increased competition from Oxford Casino, which opened in 2012.

If LD 1346 were approved, the state would seek bids to build and operate two casinos in the state, requiring a minimum capital investment of $250 million for a southern Maine casino and $25 million for one in northern Maine. In addition, the state would enter a $5 million, five-year license agreement with the southern Maine casino and a $1 million, five-year license term for a northern one. The bill also sets application, investigation and renewal fees for any potential developers.

Lawmakers say they want more control over who starts Maine’s next casino, where and how.

Current Maine law stipulates that no casino may be built within 100 road miles of an existing casino, which would exclude most potential southern Maine casino locations because of the proximity to Oxford.

A nearly identical bill, LD 1357, An Act to Implement the Findings of the WhiteSand Gaming Study, was proposed by Rep. Jonathan Kinney, R-Limington.

Opponents to gaming expansion in Maine point to a study by Clyde Barrow, former director of the Center for Policy Analysis at the University of Massachusetts Dartmouth, which explored the cannibalization effects of further casino development in the region. That report was commissioned by Churchill Downs, which acquired the Oxford Casino earlier that year.

The Barrow study focused on how casinos proposed in Massachusetts and New Hampshire would affect Maine’s existing casinos — again, Oxford Casino would take the hardest hit, with Bangor’s casino seeing cannibalization to a lesser degree. Other states’ casinos threaten to “destabilize Maine’s gaming market,” Barrow wrote, and his study was completed with only two existing Maine casinos in mind.

Oxford and Barrow have projected that a southern Maine casino would reduce revenue in Oxford by 50 percent and by nearly 30 percent in Bangor.

Jack Sours, general manager of the Churchill Downs-owned Oxford Casino, said his customers come largely from southern Maine and New Hampshire. Any other southern Maine casino would take directly from Oxford’s traffic, he said.

“Oxford County is slowly starting to rebound as a result of the economic opportunity Oxford Casino has created,” Sours said, citing planned hotel development and infrastructure investments in the area around the casino. “Casino expansion will put an end to this success.”

Other bills up for public hearings on Monday react to the WhiteSand report and approach gaming expansion in their own ways.

LD 1283 proposes splitting the state into five regions. For each region in which a casino doesn’t exist, or in which an existing casino shuts down, the state would be required to seek competitive bids to operate a casino in that region.

LD 1280 seeks to solicit bids for a “destination resort gaming facility with harness racing, slot machines and table games and a resort that includes a hotel, spa, pool, multiple dining options, entertainment venue and retail space” in Cumberland or York county. The casino development would be subject to a countywide vote. The bill also establishes an Income Tax Relief Fund, which would be fed by 50 percent of the state’s share of slot machine and table game revenues.

LD 1066 would allow the Houlton Band of Maliseets to apply to open a casino in Houlton, subject to approval by Aroostook County voters.

LD 762 would allow the Penobscot Nation to operate electronic high-stakes bingo machines at its Indian Island bingo facility. Gaming on Indian Island has been the same for more than 30 years, and the tribe wants to modernize its offerings, using machines to complement on-paper bingo. Opponents argue that the machines proposed are actually slot machines, and thus should be subject to different regulations. The tribe disagrees, arguing that they are in fact Class II rather than Class III machines. Similar bills have been rejected six times in the past.

LD 620 would allow veterans groups in the state to own and operate slot machines to help finance their operations. The Legislature has rejected similar bills several times in recent years.

During future meetings, the Veterans and Legal Affairs Committee will hold work sessions on each of these bills, where it’s expected to recommend approval or rejection of each when they go before the full Legislature.