Racino bill change sought by horsemen Group says tax could derail Bangor project

AUGUSTA – Maine horsemen gathered at the State House Thursday, pushing lawmakers to reject a proposed multimillion-dollar state tax on slot machines that some fear will derail efforts to open a racetrack casino in Bangor.

“There’s frustration and a lot of consternation, but we think the problem is solvable,” said Denise McNitt of the Maine Harness Horseman’s Association, about two dozen members of which gathered in the Hall of Flags. “We need to open the door of negotiations back up.

“The horsemen cannot afford to wait for a brighter day,” she added, noting the financial struggles the industry has faced in recent years.

The tax – which could net the state more than $8 million a year once the facility reaches its capacity of 1,500 slot machines – has become a sticking point in LD 1820, which received initial approval in both the House and Senate this week.

Any attempt to revisit the bill would be difficult at this late stage in the session, said Sen. Kenneth Gagnon, the Waterville Democrat who helped craft the bill designed to impose strict regulations on the new industry.

“My experience with [Penn National Gaming] is that one day they say give us a nickel, and the next day they want a dime,” Gagnon said, referring to the Pennsylvania-based company poised to run slots at the Bangor track. “At this stage, I don’t think there’s a sentiment to come back to give Penn more money.”

Penn officials have publicly voiced their dismay over the new tax, which they say could make the $30 million Bangor project unworkable.

The tax comes in addition to the 39 percent state share of slots revenue already in the bill. The tax was added as a way to cover state administrative costs that are estimated at $3 million.

Despite House and Senate agreement on the legislation – as well as the Baldacci administration’s expressed willingness to sign it into law – some of the bill’s major players continued to refine the language in the waning days of the session.

In response to Penn’s public doubts about the Bangor project, one such amendment proposed Thursday would require Penn to install slots at the track by January 2005 or lose its gaming license. The Senate has yet to consider the matter.

But under Penn’s agreement with the city, which owns the track, the company must operate slots there by November 2005.

Under Penn’s agreement with Capital Seven, the company from which it bought the rights to operate slots in Bangor for an undisclosed amount, Penn could pull out of the deal, but must do so by January 2005.

If Penn pulls out, the rights – including the $30 million investment deal with the city – most likely would be sold at auction.

In the event of an auction, Capital Seven, whose owner, Shawn Scott, stirred controversy during the debate over slots in Maine, would be prohibited from bidding. Any companies associated with Scott also would be prohibited.

Bangor officials, who stand to make at least $2 million a year from a so-called “racino” at Bass Park, said they preferred that the facility, which has undergone nearly $700,000 in renovations, open as soon as possible.

“The sooner the better,” said Bangor Mayor Dan Tremble, who reserved judgment on Penn’s rumblings of pulling out of the deal.

“Who knows what the truth is in this whole thing?” he said. “We’re just going to wait and see what happens.”