Racino plan finances spur questions

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CALAIS – A week before voters decide if Washington County can become home to a proposed racino and high-stakes bingo facility run by the Passamaquoddy Tribe, questions remain about the finances associated with the plan.

. As of Friday, the tribe has no developer for the project, estimated to cost $30 million.

. No estimate of how much money the high-stakes bingo portion of the facility would bring in has been made, and unlike the projected slot machine revenue, no provision for sharing the bingo money beyond normal taxes has been proposed.

But tribal officials say the financial picture will become clearer if and when the referendum is passed on Nov. 6.

“There is no backer, no contracts or agreement or anything like that,” Rick Phillips Doyle, governor of the Pleasant Point reservation, said earlier this week. “All we have right now is the tribe putting up the money for the campaign.”

In the 2003 referendum that resulted in Bangor’s racino being built, a developer had committed to the project and backed the successful campaign.

Phillips Doyle said that once voters approve Question 1 on the ballot, the tribal council will meet, and a search for a developer will begin, Phillips Doyle said, with the tribe announcing its eventual choice.

The partner the tribe chooses will have to jump through state regulatory hoops to be approved, state tribal Rep. Donald Soctomah added. “There are strict requirements [a prospective manager] has to fulfill,” he said.

The Passamaquoddy hope to build a complex on a 700-acre plot in Calais that would house 500 slot machines – that number to increase to 1,500 in the future – and include a harness racing track and a high-stakes bingo parlor.

Tribal officials dispute advertising opponents of the plan have aired that claim the legislation would enable the tribe to build more than one high-stakes bingo facilities around the county.

“That’s absurd,” Phillips Doyle said last week. “The state police regulates high stakes bingo. … What we are asking in this referendum is that we be allowed to take our own reservation high-stakes bingo license and consolidate it into the new facility. The host community has to agree to that. And the state police would have to allow that as well by issuing the license. We can’t open up anywhere we want.”

Phillips Doyle rejected opponents’ assertions that the city and state would not realize any money from bingo. He said the tribe would have to pay taxes on that business just like they would on any other.

The governor said the tribe was looking into the possibility of giving a percentage from the bingo operation directly to the city like the 1 percent slot machine payment.

Since the tribe has not operated a high-stakes bingo operation in years, he said, they don’t have a sense of how much profit they might make.

“We haven’t run those numbers yet,” Phillips Doyle said.

Soctomah said the bingo operation would employ about 50 people for 27 weekends, the time allotted to the tribe by the state. “We pay a state license fee, and we’re going to have to pay any taxes, both city and state, on that business,” he said.

Soctomah estimated the cost of building the multimillion-dollar Washington County casino, racetrack, bingo parlor, hotel and conference center at around $30 million.

That is good news for the city, Calais City Manager Diane Barnes said Thursday. At the current tax rate the city would receive around $748,000 in property taxes on the building.

“They will also have to pay personal property tax, a land tax, and water and sewer taxes,” she said. “I think between all of [the taxes] together you are looking at close to $1 million in taxes for the city.”

In addition, Barnes said, the city would receive 1 percent of the net revenue from the slot machines.

The City Council on Thursday night reaffirmed its support for a racino in Calais.

A market potential report by a University of Maine economist projected the slots profits at around $13 million a year in the beginning. Following the model of the nearly two-year-old Hollywood Slots facility in Bangor, a portion of the slots revenue will be diverted to several programs. To date, Hollywood Slots in Bangor has generated more than $21 million in tax revenues for state programs and for Bangor, its host. Penn National Gaming Inc. operates that facility.

Hollywood Slots is assessed a 1 percent tax on its total slots wager and a 39 percent tax on its net revenue, which has totaled almost $41.7 million so far. Nearly $7 million of that has been set aside to revive Maine’s harness racing industry and agricultural fairs. Another $6.2 million went to the state’s General Fund. Others receiving some of the tax revenue inlude the state’s university and community college systems, elderly and handicapped residents paying for prescription drugs, and the state itself, according to a Bangor Daily News story.

The tribe has agreed to pony up 41 percent of its net slot profits for some of the same programs – 10 percent for the Fund for a Healthy Maine, 1 percent each for Career and Technical Education centers in Washington County, Washington County Community College, and more.

But opponents say only a fraction of the money will go to state, county and community programs.

CasinosNO! executive director Dennis Bailey maintains that 61 percent of the diverted money goes to gambling interests such as the Fund to Stabilize Off-track Betting and the Fund to Encourage Racing at Maine Commercial Harness Racing Tracks.

Tribal leaders agreed money is going to those funds, but not exclusively. “If [Bailey] doesn’t like harness racing in Maine, he should say he doesn’t like harness racing in Maine cause that’s what the fund supports,” Phillips Doyle said.

Bailey said Friday he was not against harness racing. “Ask the Harness Racing Commission where the money goes and what it is used for. They don’t know,” he said. “We don’t know if that money goes in the pocket of owners. We don’t know if it helps a single horse. I am not against helping the harness racing industry. It’s just that we don’t have a clue as to what that money is used for.”

Henry Jackson of the Maine Harness Racing Commission was unavailable for comment.

But the Maine Harness Horsemen’s Association in a letter to Bailey on Friday charged his group’s ads have been “deceptive and misleading” because they have lumped agriculture and horse breeding into “gambling interests.”

“In actuality, the 61 percent cited in your misleading chart includes allocation of money to the Maine Agricultural Fair Support Fund, which supports agricultural fairs, exhibits, horse racing, harness pulling, livestock competitions, tractor pulling and more,” Gerald “Butch” MacKenzie, president of the association, wrote. “It also includes allocations to the Maine Sire Stakes Fund to encourage horse breeding in the state of Maine, the Fund to Encourage Racing at Maine’s Commercial Tracks, the Fund to Stabilize Off-tracking Betting Facilities, the Gambling Control Board and the Supplement to Harness Racing Purses.”

MacKenzie noted that the entities were “government established funds, commissions and boards that were created under acts by the Maine Legislature and signed into law.”

If the referendum is approved, MacKenzie said, it would help the harness racing industry. “A new facility will strengthen that tradition as well as support the thousands of acres of open land and family farms depending on Maine’s harness racing industry, many of which are right here in central Maine.”

But Bailey was unbending.

“Thirty-four percent of the money that is in that Agriculture Fair Support Fund actually goes to racetracks and fairs and Bangor Raceway and Scarborough Downs,” he said.

Another financial question that remains unanswered is the effect of Canadians on the facility’s revenue. A University of Maine economist predicted Canadian gamblers could spend as much as $2.4 million a year.

Opponents say Canadians won’t gamble Down East because they have casinos at home. But New Brunswick has no casinos, and the closest racino is on Prince Edward Island, about a four-hour drive from the Maine-New Brunswick border. The closest casino is in Halifax, Nova Scotia, a nearly six-hour drive from Calais.

Assuming that the gambling habits of Charlotte County residents in New Brunswick are similar to those in the U.S., UM economist Todd Gabe said in his report, about 26 percent of Canadian adults will visit a casino and those who visit will do so about 6.6 times a year.

Right now the Canadian dollar is being accepted at par at businesses in Calais, and Canadians travel to Calais to shop at Marden’s Surplus and Salvage on Main Street and Wal-Mart on South Street.

While opponents are pointing at numbers, Phillips Doyle said that what people need to focus on is jobs for people in Washington County. Once built the racino would sit between the two Passamaquoddy reservations – the one at Pleasant Point near Eastport and the other at Indian Township near Princeton. The tribe projects hundreds of jobs during the construction phase and another nearly 200 jobs once the facility is up and running.

“It upsets me that our opponents are out there misinforming about this project because Maine deserves to have the truth,” Phillips Doyle said. “We know this is not going to be a Las Vegas or an Atlantic City. This is going to be developed by the first inhabitants of this land, and we are going to be sensitive that it fits into the community without disrupting it.”