November 07, 2024
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Gaming firm may alter plan for racino Penn lobbyist blames amended slots bill

AUGUSTA – A regulation and profit distribution plan approved Thursday for the state’s first track-and-casino franchise got a gloomy reception from a lobbyist for the gaming company that hopes to install slot machines at Bangor Raceway.

Penn National, which holds an agreement with the city of Bangor to develop a proposed $30 million slots parlor at the track, had hoped to receive 63 percent of the gambling machines’ proceeds in the amended version of LD 1820. When lawmakers on the Legal and Veterans Affairs Committee voted 10-3 to approve the bill, the revenue distribution system returned only 61 percent to the slots developer.

Chris Howard, a Pierce Atwood consultant representing Penn National, said after the lawmakers’ vote that the 2 percent decrease from the company’s original target would have a dramatic impact on its business plans for Bangor. The so-called “racino” was originally advanced as a $30 million facility that would serve as the centerpiece of the city’s revitalized Bass Park complex.

“The question now is what are the economics required to build the project Penn would like to build in Bangor?” Howard said. “Under this bill, those economics don’t exist, so they’re going to have to re-evaluate. Whether that means no project or a different project remains unknown, because they’re waiting to see what the end result is.”

In addition to a smaller cut, the legislation requires the company to include a higher percentage of average payback for each machine, a factor Howard said would also influence Penn’s profit margin. The bill could be taken up as early as next week in the House where the lobbyist said there was still some hope for further amendments. Three dissenting Republicans on the panel plan to offer a minority report for floor consideration that, among other things, would give Penn 63 percent.

“Quite frankly this legislation isn’t final yet,” Howard said. “When the legislation is final and the governor ultimately decides what he’s going to do, then Penn will decide whether, and how much, it will invest.”

Working from a 48-page analysis of the bill, the lawmakers’ approval of the amended version Thursday received a round of applause from race horse owners, off-track betting parlor managers, and others associated with the industry. Scarborough Downs, which had sought an extension of its timetable to find a host community for its racino plan, was the big loser of the day. The southern Maine track will have to wait until at least next year before advancing a new proposal to the Legislature.

Key discussion points in the amended bill presented by Sen. Arthur Mayo, R-Bath, focused exclusively on the distribution of gaming proceeds. The bill provides 61 percent of slot machine revenues to the racino and 39 percent to the state. According to state estimates based on 1,500 slot machines, 1 percent of revenues would be about $830,000.

The state’s 39 percent share would be allotted as follows: state administrative costs, including addiction counseling services, 3 percent; harness racing purse supplements, 10 percent; sire stakes fund, 3 percent; agricultural fairs, 3 percent; Fund for a Healthy Maine, 10 percent; University of Maine scholarships, 2 percent; community college scholarships, 1 percent; commercial tracks, 4 percent; Bangor, the host community, 1 percent; and off-track betting parlors, 2 percent for the first 48 months and then 1 percent thereafter, with the extra percent going toward state administrative costs.

The bill also includes a long list of restrictions and permissions to regulate racino activities and creates a Gambling Control Board as an oversight panel to ensure compliance. Public Safety Commissioner Michael Cantara said he was satisfied with the regulatory provisions of the bill, although he expressed some disappointment in the panel’s decision to exclude employees not directly involved with gambling activities from criminal background checks.

Speaking for Gov. John E. Baldacci, who had opposed the racino venture, Lee Umphrey said the administration was supportive of the amended bill that he said met the standard for “the governor’s focus for honoring the will of the people who voted for the Bangor facility.”


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