Racino earns $775,000 for beneficiaries Gambling board’s report covers Bangor slots take in first 5 weeks

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BANGOR – The financial benefits promised by proponents of the state slots law approved by Maine voters in 2003 are taking shape.

A financial report released this week by the Maine Gambling Control Board shows that the 475 slot machines that went on line last month at Hollywood Slots at Bangor have generated a total of $775,000 for the 10 beneficiaries set out in the law.

Robert Welch, control board executive director, said the report spans the first five weeks of operations at Hollywood Slots at Bangor, which opened on Nov. 4.

During a statewide campaign in 2003, slots were touted as a possible salvation for the state’s struggling harness racing industry. Backers, however, also promised financial benefits to a range of other social, cultural and educational needs.

The report suggests those promises will be fulfilled, though to what extent remains unclear at this early juncture.

Under the state slots law, Hollywood Slots must pay 1 percent of the total wager at its Main Street facility to the state. Of the money that is left, 89 percent goes back to players in the form of winnings.

Of what’s left after that, 39 percent goes to the state for distribution among 10 beneficiaries.

While the state’s harness racing industry will get a large chunk of the proceeds – 10 percent to supplement purses and another 3 percent for the Sire Stakes – nonracing programs will get a share as well.

The list of other groups and programs that stand to benefit from slots include: the Fund for a Healthy Maine, which will help pay for drugs for elderly and disabled Mainers, among other things; state agricultural fairs; scholarships for the state university and community college systems; and the city of Bangor, the racino’s host.

Information about the effect on the university system wasn’t available Friday.

Off-track betting parlors also get a cut, with that money intended to offset anticipated losses because of the arrival of slots.

Henry Jackson, Maine Harness Racing Commission executive director, said Friday that the 10 percent aimed at supplementing harness racing purses should roughly double the pot for purses, or winnings, which are divided among the first five finishers.

In 2004, Jackson said, the state had access to $1.3 million from its pari-mutuel wagering handle to use for purses.

“If the present trend occurring at Hollywood Slots were to continue [for a full year], we would have a purse structure of $2.1 million,” he predicted.

The average purse in 2004 was $1,200, with the first-place finisher receiving 50 percent, second place getting 25 percent, third place getting 12 percent, fourth place getting 8 percent and fifth place taking 5 percent.

Jackson said it is too early to determine what the purses will be because the state’s racetracks, including Bangor Raceway and Scarborough Downs, have been authorized to run more races in 2006.

The Sires Stakes, which will get a 3 percent cut, will see the same number of races

The Sires Stakes is limited to Maine-bred horses as a way to encourage in-state breeding. The average purse last year was $5,000, he said. If Hollywood Slots’ earning trend continues, he said, purses will increase by “half as much again,” or by 50 percent.

As it stands, about 300 mares are “exposed” or inseminated, each year, Jackson said.

“I didn’t see any elevated interest this year, but I would anticipate an increased number in 2006,” he said. “I also would anticipate an increased value for yearlings” sold in the fall.

He also said the continuing threat of a repeal of the law that authorized slots has been a black cloud on the horizon.

Despite claims by gambling foes that slots “snuck in under the radar” because the public’s focus was on the larger tribal casino proposal that went before voters the same year, Jackson thought voters knew what they were doing.

“I sincerely believe that the people of Maine knew what they were approving when they voted [to authorize] slots,” he said, adding that many voters “saw it as an opportunity to restore an amazing economic industry.”

Another beneficiary is Bangor, Hollywood Slots’ host city.

“When we did our early projections, we tried to be conservative,” City Manager Edward Barrett said Friday.

“Based on what we’re seeing, it looks like [revenues] will probably be a little higher than we expected,” he said.

In addition to its 1 percent of the 39 percent share, which so far amounts to nearly $20,000, the city also will receive another 3 percent of Penn’s portion of the profits, an amount intended to cover Penn’s lease of Bangor Raceway, the city’s harness racing facility at Bass Park, and the former Miller’s Restaurant, which by state law must be owned by the city. That figure was not available Friday.

Penn National paid $3.8 million for the former restaurant and then conveyed it to the city, which leased it back to Penn, Barrett said.