CHANGING HORSES

After professing his company’s commitment to Maine and its horsemen, Shawn Scott has sold his interest in Bangor’s horse racing track during contentious hearings about his capability to run the track and to install slot machines there. Mr. Scott has proven that he is a shrewd, if not entirely organized, businessman. Well before he came to Maine, he purchased a down-and-out racetrack in Louisiana for $10 million and sold it for $130 million after helping with a campaign to legalize slot machines at racetracks there.

The trick now for state and local officials is to turn Mr. Scott’s gain into their gain. There are signs this is already happening. While Mr. Scott’s company, Capital Seven, chafed at the governor’s attempts to strengthen the state’s oversight of racinos, the new owners, Penn National Gaming, have already embraced the call for stricter rules.

“As someone who is licensed to operate in seven of the most stringent regulatory environments in the country, we embrace a strong regulatory environment,” Eric Schippers, a spokesman for Penn National, told Maine Public Radio. “A strong regulatory environment can help build and solidify the integrity of the industry in this state.” Tough regulations, he added, keep out questionable players. It could be argued that this is exactly what Maine, albeit in a roundabout way, was trying to do.

Voters statewide and in Bangor approved the installation of slot machines at harness racing tracks in referendum votes in November and June. However, the rules that governed such operations were drafted by Capital Seven and were weak. Gov. Baldacci has tried to strengthen elements that were unlikely to have been anticipated by voters, such as the fact that there was no limit on the number of slot machines that could be installed and that state expenses to oversee the racinos and deal with problems such as traffic and gambling addiction would far exceed the slot revenue allocated to the state. The governor set about fixing these problems with a lengthy set of regulations now before state lawmakers.

One day after officials from his company criticized the governor’s proposed rules at a public hearing, Mr. Scott announced he has sold his interest in Bangor’s racino, along with another one in New York. He did so, he said, because he had become “a lightning rod” for negative attention, attention that was making it hard for him to attain a necessary license from the Maine Harness Racing Commission, which was set to resume its deliberations when the sale was announced.

The governor’s legislation is not just about rules, it is also about money. So although Penn National has embraced tougher regulations, the company has not yet said whether it is willing to agree to a better deal for the state.

For example, the old rules provided no funds to the state to cover the cost of racino regulation and only $250,000 at most for gambling-addiction treatment. The new rules would include a $200,000 licensing fee and requires that a percentage of gross income be given to the state to compensate it for all the administrative, regulatory and economic costs associated with racino operations. Under the governor’s bill, the percentage would be set by the commissioner of administration and financial services. Mr. Schippers said his company wants a “stable business environment” and that any additional costs assessed by the state not be a disincentive for his company to invest in Maine.

These desires need not conflict with the governor’s quest for tighter regulation and more compensation from the state.