State committee passes casino work to next Legislature

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AUGUSTA — An issue that state lawmakers have wrestled with for more than 20 years will again be on the agenda in 2015.

But all bets are off as to whether the Legislature will actually pass any bill that would expand gambling in Maine in 2015.

On Monday, outgoing members of the Legislature’s Veterans and Legal Affairs Committee agreed to pass along the results of their most recent research and a new study that suggests Maine’s economy could sustain up to two more casinos. 

But so far state lawmakers have failed to authorize any casinos for Maine, instead the state’s only casinos — one in Oxford and one in Bangor — have been approved by voters in statewide ballot initiatives.

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In 2014, lawmakers rejected at least five different bills that would have expanded casino gambling in Maine, instead settling on legislation that authorized an economic feasibility study that ended up showing the state could only sustain two more casinos — one in southern Maine and one in far northern Maine near the Canadian border.

The study, completed by the industry management and advisory firm WhiteSand Gaming, has been in the committee’s hands since October. It focuses on the idea that any expansion of gambling in Maine needs to be pursued based on a competitive bidding process. The study also suggests that an expansion of gambling in southern Maine — the study recommends it be near the state’s southern beaches tourism region — would likely eat into or “cannibalize” the profits of the state’s existing casinos.

On Monday, the committee members received answers to some of the questions they had about the study, including whether the two additional casinos could be turned into three casinos instead.

The answer from WhiteSand was “yes,” but only if the facilities in northern Maine were small enough and far enough apart and the overall number of slot machines and table games would also have to be increased.

Committee members, some of whom may return to the committee in 2015, also weighed in on what they hoped any bill that may come forward would include. Some also voiced concern that the original intent of allowing casino gambling in Maine — to help save the state’s struggling harness-racing industry — had been forgotten.

Recent attempts both at the ballot box statewide and in the Legislature to add a casino that would also include an upgraded harness-racing facility in southern Maine have all failed. But state Rep. Diane Russell, D-Portland, said support for expanding casinos should only come if the next casinos are required to help both the state’s agricultural fairs and the harness-racing industry.

“I appreciate the consultant is coming to this from a perspective that is very industry-orientated, but we still have an obligation to be focused on Maine itself,” Russell said. “And if there’s no requirement for a harness-racing track in southern Maine, then there’s really no reason to introduce a casino in southern Maine.”

Russell said the only reason the issue was before the committee in the first place was because the harness-racing industry, horse breeders and farm owners came to the Legislature looking for help.

“The only reason we are even considering this is because of the direct impact on the harness-racing industry,” Russell said.

The committee seemed to agree that any bill that would come from the Legislature should require those wanting casino licenses in Maine to bid for it and those that included provisions to help the horse-racing industry would be given preference. The committee also seemed to agree any entity bidding for a northern Maine casino would receive higher preference if it included provisions that would aid the state’s American Indian tribes as well.

State Sen. John Patrick, D-Rumford, reiterated his concern that an expansion of gambling for one part of the state would damage the industry in another part of the state. Patrick said based on WhiteSand’s report Oxford Casino in Oxford would lose 20 percent of its revenue stream with the addition of a southern Maine casino.

Patrick said the actual revenue loss for the Oxford Casino and the surrounding communities could be even higher. “It may be 30 or 40 percent,” Patrick said. “Nobody really knows because this is a projection based on facts and figures that (WhiteSand) put in.”

The report suggests the state also needs to equalize and create conformity for its casino industry, including making tax rates and license fees standardized based on the number of slot machines and table games any operator would have.

WhiteSand recommends the state charge a licensing fee that is equal to about $100,000 per slot machine and a tax rate that would see 35 percent of a casino’s profits returned to the government.

Both of the state’s current casinos operate under separate tax and fee structures, and the revenue they generate for the state flows to a variety of different entities but not always the same entities.

Patrick said the report was geared toward what would be best for the industry and not necessarily what would be best for the state. 

“We’ve got to decide do we want to have more casinos that are actually going to bring in marginally more revenue to the state or what we want,” Patrick said. 

He said many nonprofit entities, including service organizations like the American Legion and VFW posts, were seeing decreases in the amounts they can raise from bingo because people were spending their money at the casinos instead.

Rep. Wayne Mitchell, D-Penobscot Nation, said his tribe’s high-stake bingo game was also losing money to the casinos, especially Hollywood Casino in Bangor.

Mitchell, who sits on a committee but is a non-voting tribal representative in the Legislature, said he would do all he could to fight against any proposal in 2015 that did not include a way to authorize casino gambling for the state’s American Indian tribes and in particular the Penobscot Nation.

Mitchell said the loss of revenue has cost his tribe important programs, including education and youth leadership development programs. 

“We were trying to build our future with that money,” Mitchell said.

He said revenue from the high-stakes bingo also helped the tribe to pay for its assisted-living center, which was built to help the more vulnerable elderly members of the Penobscot Nation.

He said a 30-mile restriction from any existing casino for any new casino in northern Maine that’s recommended in the report had “sweetened it for Hollywood (Casino) disgustingly.”

“I’ll do what I have to do,” Mitchell said. He said he had two years left in the Legislature before he retired. “But I’ve got enough fight left in me for the next two years.”

Meanwhile, Republican Gov. Paul LePage has consistently said that expanding casino gambling in Maine should be left to the voters. LePage also said that he doesn’t believe expanding gambling is the best way to grow the state’s economy.

sthistle@sunjournal.com

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