Against odds, tribes seek racino bid

BANGOR – Though the two Maine Indian tribes seeking a chance to operate what might be Maine’s only racino have approached the city with a strong hand, it remains to be seen whether they’ll be allowed to get into the game.

Last week, representatives of the Penobscot Indian Nation and the Passamaquoddy Tribe petitioned the Maine Harness Racing Commission to grant them intervenor status.

Intervenors have the right to present testimony and cross-examine witnesses, among other things. They’re also privy to all relevant communication.

Tribal representatives said that if the commission agrees to grant them legal standing, they will work to stop the commission from issuing a conditional license to Capital Seven, the Las Vegas-based company owned by entrepreneur Shawn Scott, or his apparent heir, Penn National Gaming of Pennsylvania.

Penobscot and Passamaquoddy leaders said that, ultimately, they want to compete for the chance to develop and operate the racetrack casino proposed for Bangor Raceway.

Although a recent proposal from the tribes could mean millions more in revenue for the city and a new development fund for the region, Bangor officials are unable to pursue it because of the city’s existing agreement with Capital Seven.

That could change, however. As it is written, Bangor’s agreement with the racino developer could expire if the commission does not grant a racing license for the Bangor track within the next two weeks, or 90 days before the start of the 2004 meeting.

Capital Seven’s development rights are transferable to Penn and the city cannot unreasonably withhold its consent to that end, city officials observed earlier.

Under the existing agreement, the city would receive an estimated $420,000 in base rent and a minimum $1 million in “percentage rent,” or a percentage of the gross slot revenue. The actual amount remains to be determined. Under the plan, the developer would share with the city between 3 percent and 6 percent of the facility’s slot-machine gross revenue, or income after payoff to players, based on a sliding scale.

In dollars, the city could gain between $1 million and $3.8 million, according to a letter of intent outlining some of the deal’s key points.

As representatives of the two tribes see it, at least 85 percent of the racino’s income, projected at more than $80 million a year, is expected to come from Maine customers.

In written descriptions of their plan, they say that allowing them to run the racino would “resolve the contentious issue of tribal gaming in Maine.”

Penobscot Chief Barry Dana said last month that the two tribes began seeking new economic development opportunities after their bid to develop a $650 million tribal casino in southern Maine failed at statewide polls on Nov. 4.

He noted last week that the Bangor racino would lie just eight miles from Sockalexis Bingo Palace – home of Penobscot High Stakes Bingo, the oldest Indian bingo in the nation. He is concerned that the racino might cut into the tribe’s revenue stream.

Following are some of the highlights of the tribes’ proposal:

. They would offer the city 5 percent of the gross revenue from slots. That, they say, would amount to about $4 million a year. They also guaranteed the city a minimum payment of $3 million a year.

. The two tribes also would earmark 10 percent of the gross revenues, or $8 million a year, for a regional economic development fund. That money would be invested in new or struggling businesses in northern and eastern Maine. The fund would be established by the city, state and other regional development interests.

. Under the city’s current development deal, an estimated $35 million to $40 million a year in net profits would flow out of state to Penn National – a total of $1.7 billion to $2 billion over the up-to-50-year term of its lease with the city, representatives of the two tribes involved said. Tribal officials said that under their offer, at least $460 million of that total would go to Bangor and the economic development fund for depressed regions of the state.

. Foxwoods Resort Casino in Ledyard, Conn., the world’s largest casino resort, would provide management and marketing services for the racino.

Foxwoods is owned by the Mashantucket Pequot Tribe of Connecticut, which has collaborated with the Penobscots on gaming for 20 years. The Penobscots and Passamaquoddys would own 70 percent of the joint venture and the Pequots would own 30 percent. The Passamaquoddys and Penobscots said their share would be reinvested and spent in Maine.

. As far a racing goes, the tribes note that Maine horsemen have all the expertise needed to operate the racetrack and that the tribes intend to rely on that expertise as well as their own horse-racing heritage.

Despite all the confusion and legal wrangling surrounding the racino issue, Bangor City Council Chairman Dan Tremble took steps late last week to assure the harness racing community and the public that racing would indeed be conducted here – regardless of what happens with the racino effort.

The city last year filed its own license application to ensure racing in the event neither Penn National nor Capital Seven is licensed in time.

“We know there’s the city’s application,” Tremble said. “There shouldn’t be a concern. Racing will go on in Bangor this year.”