Baldacci slots bill slowed by lawmakers

AUGUSTA – The Baldacci administration’s bill to rein in slot machine operations at the state’s harness racing tracks found itself on the slow road Wednesday, with lawmakers raising concerns about some of its attempts to regulate the fledgling industry.

“There has been so much rush, rush to this issue that we need to slow this down a little bit,” said Sen. Ken Gagnon, D-Waterville, who promised his Legal and Veterans Affairs Committee would hold at least two more work sessions on the emergency bill. “We have one shot at doing this right.”

The bill, LD 1820, would establish a gambling regulatory board designed to place strict controls on the introduction of slots to Maine, where voters at a November referendum approved the new form of gambling for the state’s two harness racing tracks in Bangor and Scarborough.

Baldacci’s bill would repeal much of the voter approved legislation, which limited the state’s share of the gambling revenue to 25 percent. Under the new bill, the state could claim millions of dollars in additional taxes and fees to help offset administrative costs and losses to the state lottery, among other things.

It was clear some committee members were inclined to jettison what they considered the bill’s “nebulous” fee structure and replace it with a simple percentage. Gagnon and the committee’s House chairman Rep. Joseph Clark, D-Millinocket, recommended that the state take between 45 and 50 percent of the slots revenue.

Such a percentage would put Maine second among states that allow “racinos,” in terms of how much it taxes the industry, according to figures provided by Christiansen Capital Advisors, LLC, a New Gloucester firm that studies the gambling industry.

In 2002, Rhode Island collected $158 million in taxes from the state’s racinos, or 53 percent of their total revenue. For comparison, West Virginia collected 36 percent; Delaware, 35; Louisiana, 33; Iowa, 26; and New Mexico, 25.

David Nealley, an official with Capital Seven LLC, the original developer of the racetrack casino in Bangor, took issue with the hefty tax suggested by the committee’s chairmen.

“They can’t dig too deep or they’ll kill the project,” said Nealley, adding that while a higher tax might be workable for a racino in a more lucrative southern Maine market, it could make the Bangor project unprofitable.

Thus far, Bangor Raceway is the only race track eligible for slot machines, with Scarborough Downs failing to win the needed local approval by the Dec. 31, 2003, deadline imposed by the referendum legislation.

Among the many issues raised at Wednesday’s work session was giving the Scarborough track more time to find a host community in southern Maine. The governor’s office, against any gambling expansion, opposes the idea. The committee, by contrast, appears split, based on earlier interviews.

The committee will hold another work session at 1 p.m. on Jan. 21, when it is expected to debate some of the issues raised Wednesday.

Nealley said during a break in Wednesday’s work session that the committee should keep in mind the will of the voters before accepting drastic changes proposed by the Baldacci administration or enacting any of its own.

“The further they drift from Question 2, the more you tell voters their votes don’t count,” he said, echoing the sentiments of several audience members who wore buttons reading “Support Our Vote.”

Voters might get another stab at the racino question, with the committee expected to consider a proposal that any new legislation pertaining to the industry go back to voters for approval.

The potential for several such proposed amendments to the governor’s bill, combined with Gagnon’s promise to proceed slowly, raised questions as to whether the new regulations would be in place before late February, when the referendum legislation is set to take effect.

The prospect of the referendum’s weaker regulations taking effect caused concern in the governor’s office.

“The governor still has a sense of urgency to get this done,” said Baldacci spokesman Lee Umphrey. “Oversight in this area is necessary.”