INDIAN ISLAND – The Penobscot Nation chief says his tribe’s loss of high stakes bingo revenue to the Hollywood Slots racino in nearby Bangor is making it difficult to provide essential services to tribal members.

As a result, the tribe is trying through legislation to get the state to waive its $50,000 bingo fee and allow the tribe to offer slot machines at the Indian Island facility to attract and retain players.

Bingo revenues are important to the tribe, supporting community infrastructure such as its fire and police departments as well as a senior meals program.

“It really affects direct services to people,” Penobscot Nation Chief Kirk Francis said in an interview Monday.

The tribe has trimmed a number of programs and has cut its game wardens from five to two.

“Really, this is about creating a healthy tribal economy to address those essential services for our people,” Francis said.

Legislators are scheduled to hold a work session on the slot machine request today in Augusta.

“We believe we can make it a viable opportunity here in our community, so we don’t lose a 30-year business that has proven supportive to our community,” Francis said. “Our dependence on the federal budget is no longer an option.”

Before Hollywood Slots opened in Bangor more than a year ago, Penobscot Bingo had the largest pull-tab ticket sales in the country. In 2004, the tribe’s pull-tab sales were $886,000, with a net profit of $221,000. In 2006, those numbers dropped to $775,000 in sales and $189,000 in net profit. A pull-tab is a two-sided gambling ticket.

Waiving the $50,000 fee “would really give us the breathing room to continue to operate,” Francis said. “If we don’t get some help in this restructuring, that $50,000’s not going to be there anyway.”

In 2004, the Penobscots’ high stakes revenue was about $1.4 million. In 2005 and 2006, that number decreased by about $100,000 each year.

The decline in revenue resulted in the tribe seeing $150,000 in profits for its general fund from bingo a couple of years ago to just $3,800 last year, Francis said.

He also stressed in an interview that it’s not just the tribe that would suffer if the facility were forced to close.

The tribe holds seven games each year, pumping roughly the following amounts annually into the area economy:

. $420,000 to Bangor-area hotels.

. $168,000 in restaurants and meals.

. $140,000 in shopping.

. $105,000 to bingo suppliers in Bangor and Lewiston.

. $45,000 to area printers.

Most of the tribe’s gambling revenue comes from out of state. Only 15 percent of the players at Indian Island’s facility come from Maine. An average game of 1,500 people sees only about 250 Mainers, Francis said.

One of the arguments from legislators in Augusta is that the Penobscots need to market their game more aggressively.

Francis said the problem is that Indian Island’s bingo operation is a standalone facility – the only one left in the country – and has been losing income, not people. He said players come to play bingo but are saving some of their money to play at Hollywood Slots once the Indian Island game is over.

“Attendance wise, we’re staying at the same level,” Francis said. “The problem is where they’re spending their money. Nobody’s spending here because they’re waiting to go to Hollywood Slots when the game closes.”

For each of the seven weekends that bingo operates, the tribe books anywhere from 400 to 700 hotel rooms and operates 25 to 30 buses.

“It’s difficult to put that together every weekend,” Francis said.

There aren’t hard numbers demonstrating that Hollywood Slots is seeing an increase in players during the high stakes bingo weekends at Indian Island.

On average, Hollywood Slots grosses $2 million on a Saturday and $1 million on an average Sunday.

Its numbers were slightly above the norm during high stakes bingo weekends, but fluctuated throughout the year on bingo dates.

“The influx of people that they see assists many different companies in the area,” said Amy Kenney, Hollywood Slots marketing and public relations manager, on Tuesday. “It’s great for the area what they’re doing.”

Kenney said that Hollywood Slots has 479 slot machines at its temporary location on Main Street in Bangor and intends to open its permanent facility in 2008 with 1,000 machines.

Penobscot Nation Rep. Donna Loring is sponsoring the high-stakes bingo-related bills, asking lawmakers to assign 400 of the 1,500 slot machines allowed at Hollywood Slots to the Indian Island facility.

“We’re opening with 1,000 with the ability to go to 1,500 if and when business demands it,” Kenney said.

Under the state law, Hollywood Slots is allowed to have 1,500 machines for the area within 2,000 feet of the race track at the nearby Civic Center.

Francis argues that the slots are supposed to be a supplement to the bingo games and players, not a 24-hour, seven-day-a-week operation.

“It’s not about having a big facility,” he said. “It’s about the right to having the ability to economically develop on our land as we see fit.”

It’s also a way to relieve the pressure of wondering and fighting about where funding is going to come from. That way, the tribe can continue with other economic development efforts in its effort to become more self-sustainable.

“We’ve recognized that we have to be diversified and not focused on gaming,” Francis said. “Gaming needs to be a supporter of the tribal economy, not an answer.”

He explained that the tribe isn’t asking to be waived from any reporting or accountability requirements with the state.

If racinos, the Maine State Lottery and casinos are an acceptable practice in the state, the tribes shouldn’t be denied the right to participate, Francis said.

“We just feel like we can’t compete without slots here,” Francis said.