Penn given permanent ’05 license Firm now can pursue Bangor racetrack casino

AUGUSTA – After receiving new information about Penn National Gaming Inc.’s finances, Maine Harness Racing Commission members on Tuesday changed the status of the company’s 2005 racing license from conditional to permanent.

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

Penn needs a permanent racing license and a permanent gaming license to pursue its plans to develop a $75 million racetrack casino at Bangor Raceway, the only venue in the state that received the needed 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. The facility is expected to provide 400 to 500 new jobs, most of them full-time and with benefits.

“We’re very pleased with the decision today,” Penn spokesman Eric Schippers said after the commission’s unanimous decision to issue a permanent license.

“As we said from the beginning, we want to provide the [racing commission] with every bit of information it seeks,” he said. With the racing license under its belt, Penn now plans to shift its focus to obtaining a permanent gaming license.

As it stands, Penn holds a conditional gaming license because state law regarding the racino does not protect the privacy of certain records Penn National does not want disclosed through the licensing process. That has prevented Penn from submitting a complete application.

Emergency legislation was submitted earlier this month to protect the privacy of those records, which include personal information relating to key executives and employees and their families, such as birth dates, Social Security numbers, home addresses and telephone numbers, marital and family relationships, criminal and civil litigation histories, health status and memberships, to name a few.

“We’ve heard from some people who are opposed to gaming and who feel the protections may be too broad, but, in reality, we’re seeking no more protection than we have in other jurisdictions,” Schippers said. “We hope it will move quickly because it’s one of our few remaining hurdles.”

The decision to grant a permanent license followed a report from a consultant hired by the state to help determine whether Penn has the financial wherewithal to operate races at Bangor Raceway.

During the racing commission’s Nov. 30 meeting, Penn was granted a conditional harness racing license until the company agreed to provide the board with additional financial information, namely corporate ledgers, tax returns and management letters from their auditor for 2001, 2002 and 2003.

Penn declined to hand over the documents because the state harness racing panel lacked the ability to keep them confidential.

Since then, the state consultant has reviewed the documents and records at issue.

On Tuesday, Christian Smith, the certified public accountant and fraud examiner hired to look at Penn’s financial track record, outlined the findings of his Dec. 16 visit to Penn’s corporate headquarters in Wyomissing, Pa.

Smith said that he examined the three years’ worth of financial records the state asked him to review, as well as Penn’s corporate tax filings with Pennsylvania.

Smith said he also used software designed to detect unusual financial transactions and anomalies on an electronic copy of Penn’s ledgers. He also spoke with several corporate officials and Penn’s auditor.

“To sum it up, I have no concerns regarding the financial capabilities of Penn National Gaming,” Smith said.

“There were no red flags whatsoever that jumped out at you?” asked George McHale of Orrington, chairman of the racing panel and the Maine Gambling Control Board.

“None at all,” Smith said.

After the meeting, McHale said that, despite Penn’s concerns that it was being held to higher standards than other racing license applicants, the state needed to review a relatively broad array of financial information because Penn has no track record in Maine.

“I think that Penn National has been extremely cooperative under some difficult circumstances,” he said.

In a related development, Bangor city councilors on Monday night unanimously adopted a resolve in support of the emergency legislation, calling the step “a fair and reasonable recognition of the privacy rights of individuals and the requirement to protect proprietary information from public release.”

Progress on the racino is being watched closely in Bangor, where local officials are looking forward to the economic benefits they believe the racino will bring.

Delays that affected various aspects of licensing have been frustrating, noted council Chairman Frank Farrington, who, along with City Solicitor Norman Heitmann, has attended most of the racino-related proceedings held in Augusta in recent months.

“People are scratching their heads, saying ‘What’s the problem?'” Farrington said after the racing commission meeting.