Bending to a new formula for slot machine taxation would cost taxpayers millions

In November, Maine voters again spoke to the issue of gambling, and defeated a racino in Washington County. Anti-racino folks, including me, successfully argued that slot machines aren’t economic development.

We also pointed out the groups receiving the “benefit” dollars Maine people lose in these rigged computer programs – slot machines – are not accountable. I was a member of Maine’s Gambling Control Board, and can testify firsthand the board is forced to tax slot income and give these funds to beneficiaries with no questions asked.

Two outrageous examples of this misguided statute are off-track betting parlors and commercial racetracks. These two private groups will gather nearly $25 million over the next two years.

The money will not benefit horsemen’s purses, agricultural fairs or the Maine sires stakes program. It will not be used for prescription drug relief for the elderly, or college scholarships for Maine students – as voted for in 2003.

Instead, the money will be passed onto these people to be used as their personal income. They can use the funds to buy a new car; to buy a castle in Spain, or to hire more lobbyists to ensure their newfound tax money is protected.

Maine people often ask me how we got into this position. It is simple.

The folks who want to pick Maine people’s pockets with their new computer software learned they couldn’t win at the ballot box without a clever campaign. A campaign of deceit and disguise was designed, and this campaign was “slicked” by Maine voters in 2003. It flew under the radar while Casinos No! was busy fighting the casino proposal in Sanford. The casino lost handily, but the quiet little racino slipped through. The right for a racino in Bangor was born.

The group holding the rights sold their interests to another company. This new company apparently recognized before it could proceed down a smooth path to guaranteed riches, it needed help from the Legislature.

A coalition of beneficiaries was formed to this end, and the coalition was promised the crumbs of wealth into perpetuity for their help. A powerful lobby in Augusta was hired by this coalition, and by the new racino owner, and was turned loose on our Legislature. Every financial wish of the coalition was granted. Maine lost.

How can the people of Maine regain part of what they lost? Again, the answer is simple.

The governor and Legislature must revisit the law, and find the courage to make meaningful changes. First, under no circumstances should legislators be duped into eliminating the one percent tax on gross slot revenue that currently exists, in return for a 12.9 percent tax on the net revenue, as recently proposed by a slot taxation committee report.

This would put the racino in charge, and again compromise Maine interests and tax dollars.

Particular attention should be paid to the minority report prepared by Rep. Linda Valentino, D-Saco, and former state senator and current gambling control board member Peter Danton. They have taken a courageous stand against overwhelming odds, and their report is right on the money. Second, we must eliminate off-track betting parlors and racetracks as gambling revenue beneficiaries.

Maine is facing a $200 million deficit in this two-year budget. These two private entities will receive $25 million over this same budget period. Before we cut services to the mentally ill or infirm, do we have an obligation to look at this law? Before Maine taxpayers are asked for another dime, do we have an obligation to correct this blatant misuse of tax revenue? I think we do, and the Appropriations Committee should take note.

I am opposed to the racino in Bangor, and I’m opposed to adding more casinos or racinos in our state. Maine will never be a gambling destination, and because of this, gambling will not succeed as economic development.

However, the racino in Bangor exists, and while it exists, public officials are obligated to safeguard and maximize the tax money collected, and to make certain this tax money is used in the best interest of Maine people.

The governor in 2003 said the people of Maine have spoken. He was correct. Many legislators have pointed out the same thing to me in the last few years. They were correct. Well, the people spoke again in 2007.

Against all odds, they again spoke loud and clear. Gov. Baldacci and legislators, did you hear them?

Will you listen?

Michael Peters is a former member of Maine’s Gambling Control Board. He lives in Dixfield.