Economist calculates slots revenue Study: Racino would boost Calais economy

A study released Tuesday by a University of Maine economist estimates that the Calais racino proposed by the Passamaquoddy Tribe could generate between $11.9 million and $13 million in slot machine revenue annually.

“The projected impact in slot machine revenue is actually larger than the total sales generated by restaurants and hotels in the Calais area,” said Todd Gabe, author of the study and an associate professor in the UMaine School of Economics. Gabe is also a fellow in the UMaine Center for Tourism Research and Outreach.

By comparison, slot machine revenues at Hollywood Slots at Bangor are equivalent to less than 20 percent of total hospitality sales in the Bangor region.

“Relatively speaking, that’s a significantly larger impact in Calais,” Gabe said Tuesday. The report does not take a position on whether gaming is “good” or “bad” for the state of Maine.

He emphasized that the results of his study are intended to be just one piece of information to be considered along with other economic and noneconomic issues in the coming debates about the possible expansion of slot machine gaming into Down East Maine.

Maine voters will be asked in a November statewide referendum whether to allow the Passamaquoddy Tribe to develop a racino with up to 1,500 slot machines in Washington County.

Donald Soctomah, Passamaquoddy tribal representative to the Legislature, said Tuesday he was happy with the results of the study.

“It shows that a racino [a racetrack-casino operation] in the Calais area would be viable and that the revenue produced from that racino will benefit the Washington County businesses, the state taxes and also will benefit tribal economic development projects,” Soctomah said.

But Dennis Bailey, executive director of CasinosNo! of Portland, said Tuesday that more revenue would come from Mainers than from tourists.

“These casinos simply shuffle money around. They don’t bring new money into the economy. People shouldn’t get too blinded by the dollar figures,” Bailey said.

To arrive at his figures, Gabe said he examined the total market potential for casinos throughout Maine. He also examined other U.S. states with gambling facilities and the number of slot machines per 1,000 residents; the amount of revenue generated per slot machine; and national data on how many adults go to slot machines as well as how often and how much each one spends.

Gabe notes that he excluded Nevada, “because of Las Vegas’ extraordinary nature as the ‘gaming capital’ of the United States and the large number of worldwide visitors that it attracts.”

Gabe also considered the number of out-of-state tourists and Canadian visitors who come to Maine annually. His research assumes that a casino in Calais would attract people from within a 21/2-hour drive, including residents of New Brunswick.

In Maine, racinos have the potential to capture revenues of between $250 million and $280 million statewide, Gabe said. About 4 percent of that would be captured by the slot machines in Calais.

Gabe said that without a detailed survey of racino patrons, it is impossible to determine how much of the nearly $13 million in Calais would be new money to the region or cash that would have been spent there anyway on other goods and services.

The report is intended to give people an idea of the amount of revenue that a facility like the one proposed in Calais would generate if Mainers and Maine visitors gamble at the national average, Gabe said.

Some of the $11.9 million to $13 million generated by the proposed facility would be taxed by the state, kept by racino operators, and used to pay the wages and salaries of racino employees.

The study was conducted at the request of the Passamaquoddy Tribe, but Gabe received no compensation for the research. This project builds on his earlier work on casinos and, more broadly, the tourism industry, he said.