Board opens gaming application review Penn National presents plan to state gambling board for Bangor Raceway

AUGUSTA – Members of the Maine Gambling Control Board began their review Thursday of an application for the state’s first gaming license, an application that came with a $200,000 nonrefundable application fee.

They also completed plans to bring their new executive director on board and amended their request for proposals for a central site-monitoring system to allow the primary system to be located outside of Maine.

Penn National Gaming Inc. submitted an application for a slots operator’s license shortly after it received a permanent harness racing license from the Maine Harness Racing Commission on Oct. 14.

The application review began with a report from state police who did background checks on the company and from two financial consultants. Board members also met in executive session with their legal counsel from the state Attorney General’s Office to discuss their options with regard to the application.

The review will resume during a meeting set for Nov. 4.

Receiving the racing license was a milestone in Penn’s plans for Maine because it gave the Pennsylvania-based gaming and racing company the legal standing needed to apply for a state slots operator license.

Penn needs both licenses in order to pursue its plans to develop a $75 million racetrack casino at Bangor Raceway, the only venue in the state that received the necessary local and state voter approval. The company’s plans call for the construction of a 90,000 to 100,000 square foot gaming facility and an attached multilevel parking garage.

During Thursday’s meeting at the Department of Public Safety’s Augusta headquarters, the five-member racing panel grappled with a confidentiality roadblock similar to the one that plagued the state harness racing panel earlier this month.

At issue is a loophole in the state’s slots law that prevents state gaming authorities from keeping sensitive corporate information about Penn and personal information about key corporate officials out of the hands of the general public.

To that end, Penn submitted a redacted corporate application containing only information it deemed public, noted George McHale of Orrington, who heads both the Harness Racing Commission and the Gambling Control Board.

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 legislative leaders.

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

For now, the company is holding off on submitting information it considers private, sensitive and proprietary until the state can offer confidentiality, as is the case in all of the other jurisdictions in which Penn does business.

Steven Snyder, Penn’s senior vice president for corporate development, noted that Lt. Timothy Doyle and Detective Rick Fowler of the Maine State Police reviewed the information missing from the Maine license applications during visits with gaming authorities in Colorado and the Canadian province of Ontario as part of their background investigations for the gambling board and racing commission.

Doyle said that Maine investigators found no issues of concern, though he did point out a decade-old infraction involving “yield burning” on the part of Snyder. Snyder 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.

They also heard reports regarding Penn’s financial capacity from Christian Smith, a certified public accountant and fraud examiner hired to look at Penn’s financial track record, and Robert Strong, a University of Maine finance professor, hired to conduct an independent assessment.

Neither expert found serious issues; however, both expressed concerns about Penn’s debt load.

Snyder later said the company’s pending sale of its Pocono Downs and related properties would provide net profits of $175 million that would be used to reduce debt.

In other business, the board heard a report on the state police’s background check of Robert Welch of Bangor, who was offered the board’s executive director position during a meeting earlier this month.

Lt. Thomas Kelly said the investigation uncovered no issues of concern regarding Welch, who retired a few years ago as Bangor’s deputy police chief.

Kelly said Welch turned out to be “squeaky-clean” after an extensive investigation.

Welch, originally slated to start work on Nov. 29, will instead assume his new position on Nov. 8. Board members wanted to get him on board quickly because of the gambling control unit’s heavy workload.