Penn National gets racing license

AUGUSTA – Despite a confidentiality problem that kept some key documents out of its hands, the Maine Harness Racing Commission agreed Thursday to grant a permanent racing license to Bangor Historic Track’s parent company.

The harness racing license is one of two licenses Penn National Gaming Inc. needs to carry out its plans for Bangor Raceway, which call for the construction of a gaming facility that would house 1,500 slot machines and a multilevel parking garage.

Before any slot machines can be installed in Bangor, however, Penn also must obtain a gambling license. The state’s current inability to grant confidentiality for financial and personal information about Penn and key corporate officials still could prevent the racino from moving forward, officials said.

George McHale, who heads both the Harness Racing Commission and the Gambling Control Board, noted during Thursday’s proceedings at the State House Office Building that the Penn probe was the most exhaustive he’d seen to date and that the confidentiality issue was a problem that should have been detected earlier in the process.

“I can only say I can’t understand how it got by everyone,” he said.

In their deliberations, four of the racing panel’s five members – McHale of Orrington, Norman Trask of Easton, James Tracy of Farmingdale and Stanley Kuklinksi of Farmington – said they believed they had ample information to determine Penn’s financial responsibility and good moral character without having to review the contested information. The state police’s investigation yielded seven volumes of documents and data.

“Everything I’ve heard is the evidence that I’ve been looking for,” Kuklinksi said. “I haven’t seen one red flag through this entire hearing.”

“How much information is enough is a decision we have to make,” Trask said.

The exception was member Ann Jordan, an attorney from South Portland, who said that without having access to the disputed information, she could not determine if Penn met the criteria and, as such, could not agree to issue an unconditioned racing license.

Before the vote, Lt. Timothy Doyle outlined an investigation by state police personnel that turned up no financial problems or character issues in several other states in which Penn does business, as well as the Canadian province of Ontario.

However, Doyle did bring to the commissioners’ attention a decade-old matter involving “yield burning,” defined by the Web site investorwords.com as an illegal practice in which an underwriter places excessive markups on bonds used to complete some types of municipal bond offerings. By marking up the price, the yield will fall, which is known as “burning” the yield.

Steven Snyder, a senior vice president with Penn, paid a fine concerning the episode but did not admit to guilt. The incident did not prevent him from being licensed in several other states and Canada.

Snyder, who attended Thursday’s hearing, outlined Penn’s corporate history and plans for Bangor Raceway. He also listed $50,000 in charitable contributions the company has made to organizations and events in the Bangor area.

Christian Smith, a certified public accountant hired to look at Penn’s financial track record, noted no major problems. He noted, however, that Bangor Historic Track had operated at a loss for several years, with shortfalls in the $200,000 range in the two most recent years. The losses were connected to a declining wagering handle at the track. Expenses remained more or less stable.

Penn spokesman Eric Schippers and Penn’s legal counsel, Christopher Howard of Portland, said the company’s next step will be to file an application for a gaming license.

As it stands, the gambling control board lacks the legal authority to grant the confidentiality that Penn and potential vendors are seeking.

That will require the intervention of the Legislature, McHale said. The gambling panel has asked Public Safety Commissioner Michael Cantara to address the matter with the appropriate state officials.

It is not yet clear exactly how the problem will be addressed.