After five years in permanent home, city says Hollywood Casino boosted Bangor growth

People play slot machines at the Hollywood Casino in Bangor.
Gabor Degre | BDN
People play slot machines at the Hollywood Casino in Bangor. Buy Photo
By Nick McCrea, BDN Staff
Posted July 13, 2013, at 5:44 a.m.

BANGOR, Maine — Five years ago, Hollywood Casino moved its slot machines from the site of a former restaurant to its brand new $132 million gaming and hotel complex on Main Street.

As the casino celebrates the anniversary of its modern edifice this month with giveaways and promotions, city officials say the venue has been a catalyst for development in Bangor. Opponents of casino gaming in Maine, citing economic pitfalls for individuals and fears of increased crime, decry its presence.

When the celebration hoopla is over, Hollywood Casino will continue to face a competitive gambling industry in Maine, with newcomer Oxford Casino to the south having surpassed the Bangor casino’s revenue totals in its first months.

Impact on Bangor

In the closing months of 2005, what was then Hollywood Slots opened its doors along Main Street in the building that’s now home to Seasons Grille and Lounge. In its first full year, 2006, the facility brought in about $37.5 million in revenue.

In July 2008, the business moved into the $132 million facility complete with a seven-story hotel that dramatically changed Bangor’s skyline and, some say, perceptions of and aspirations for the city.

Five years later, the casino, owned by Penn National Gaming, is coming off its best financial year yet after adding table games to its offerings, netting $62.6 million at the slots and tables in 2012.

The city has drawn “significant revenue” from Hollywood Casino through taxes and fees, according to Debbie Cyr, the city’s finance director. The casino pays monthly rent equal to 3 percent of net slot revenues — about $8.7 million for the city over the past five years. The city also receives 1 percent of the 39 percent the state takes from net slot revenues at the casino — this brought Bangor about $2.56 million in the past five years. Bangor also has collected about $200,000 from the casino’s revenue from table games since they debuted in March 2012. Simulcast wagering on horses is a separate revenue category for the casino not included in the payouts to the city.

In 2012, the state’s Gambling Control Board took nearly $20 million of the casino’s slots winnings, which was divided up to support the harness racing industry, community colleges and universities, agricultural fairs and the state’s general fund. The state also received more than $1 million from table games operations in the nine months after table games debuted. Most went toward administrative expenses for the board, but some went to Bangor and some went to the Veteran’s Assistance Grant Fund.

Casino money also has played a large part in funding the $68.7 million Cross Insurance Center across the street, which is preparing to hold a grand opening later this year, according to Cyr. The facility replaces the former Bangor Auditorium, which has been torn down.

“When the decision was made to move forward with a new arena, there was no funding mechanism readily available without dipping into the tax base,” Bangor City Council Chairman Nelson Durgin said.

Durgin said city officials wanted to replace the 1950s-era facility for more than a decade, but had no way of paying for such a large project. With the casino, a funding opportunity surfaced.

Councilors worked out a deal in which $12.2 million in construction costs would be covered by the casino’s operations and the remaining $56.5 million in bonds paid through annual debt-service payments just under $3 million over a 30-year period. Those payments, the council decided, would be covered through the revenue the city receives from taxes on Hollywood’s gaming revenue and some downtown tax increment funding money.

The casino employs about 400 area residents, and Eastern Maine Community College has started courses to train dealers for table games, a valuable resource for those seeking to jump into a new industry, Durgin said.

“Hollywood Casino has clearly been a catalyst in Bangor,” said Tanya Emery, Bangor’s economic development specialist. “The presence of this facility has made Main Street an even more compelling destination for locals and visitors, which has, in turn, helped us garner substantially more interest on the economic development front.”

Casino General Manager John Osborne credited Bangor’s leaders with their stewardship of the city in recent years. Extensive work on the waterfront made Bangor a more attractive place for potential developers, as well as events such as the Waterfront Concerts and American Folk Festival, as well as the casino, he said.

Competing for gamblers

As Hollywood Casino has evolved, so has the gaming landscape in Maine and beyond. Oxford Casino opened its doors in June 2012. Churchill Downs Incorporated Properties, the parent company of Churchill Downs Racetrack, home to the Kentucky Derby, plans to purchase the young casino for $160 million. A development firm recently announced plans to build a hotel across the street.

With two casinos emerging in a five-year span in a state with little past exposure to the industry, lawmakers have placed a moratorium on future casino development to consider the effects of casino gaming in Maine.

From its opening month through May 2013, the Oxford facility netted about $65.4 million in slots and table games revenue. In that same time period, Hollywood Casino took in about $57.85 million.

A recent UMass Dartmouth study of casino trends found that gamblers in the Northeast, and across the country, were hesitant to spend what discretionary income they had on gambling in the wake of one of the worst recessions in U.S. history in 2008.

Recovery from that collapse has been slow, but the study argued that people’s hesitancy to gamble in New England was “likely a temporary setback that is reversible once the economy enters a new growth phase and unemployment rates start to decline in the region.”

Osborne said Hollywood Casino continues to work to draw more patrons and is focusing north in its efforts to do so. Oxford Casino draws mostly from the large populations in southern Maine and other New England states. Hollywood Casino is focusing on drawing people who live north of Augusta, including the Canadian Maritime Provinces, according to Osborne.

The casino has partnered with the Bangor Mall, which is used heavily by Canadian shoppers who visit by the busload, to market the gambling opportunity a few miles away through signs and leaflets at the information booth, Osborne said.

The casino also works with Canadian tourism groups. In years past, Canadian visitors accounted for 3 percent or 4 percent of casino revenue, according to Osborne; in 2012, however, they represented more than 10 percent.

In a couple of major changes aimed at drawing gamblers to the facility, Hollywood Casino in 2011 moved its horse betting operations into the casino and premiered table games in March 2012.

In the next few years, Osborne said he expects the casino will draw more patrons from visitors to shows on the Bangor Waterfront and events and conferences at the new arena. This influx, he added, should lead to development of an “entertainment corridor” along the waterfront.

“It’s been a very positive addition to our community,” Durgin said of the casino, adding that the economic and tourism benefits for the city have outweighed concerns “naysayers” had about increases in crime and addiction.

Some opposition remains

As Durgin pointed out, not everyone is celebrating the casino’s anniversary. Some groups continue to decry the casino industry.

Dennis Bailey, who led efforts to keep casino gaming out of Maine as executive director of Casinos No! said Friday that his views on casinos haven’t changed. Bailey owns a public relations firm in Portland.

“You have to look at what Hollywood Slots promised in its campaign to win over the voters: Money for the state, jobs, economic development and a revival of harness racing. It’s really done none of those things.” Bailey said, calling the casino a “total scam.”

Bailey argued that Hollywood Casino, and casinos in general, don’t actually generate much economic benefit for the community or state, but rather result in a transfer of money from the pockets of Mainers into the coffers of the casino.

“It doesn’t enlarge the pie, it just slices it differently,” he said.

The Christian Civic League of Maine also opposed gambling as lawmakers and voters considered whether to allow casino development and growth in Maine, and years later the group has “absolutely not” changed its mind, said Executive Director Carroll Conley Jr.

“I’ve always been concerned about predatory gambling,” said Conley, who served as music director at Bangor Baptist Church in 2008 when Hollywood Casino moved into its permanent facility.

“Our position has always been that it’s indisputable that there always will be casualties [of gambling],” from divorces and bankruptcies to increases in crime, he said.

Both Conley and Bailey cited the case of Tammy Barker of Holden, who was sentenced to 3½ years in prison in 2011 for stealing more than $300,000 to feed her gambling addiction at what was then Hollywood Slots.

Even if only a few families are affected, that’s too many, Conley said. He called gambling an “unethical, greedy, corrupt” industry where people take advantage of the vulnerabilities of others.

“We don’t feel there is an acceptable rate of attrition,” he said.

In recent years, Bangor has seen upticks in thefts, property crimes and violent crimes, but those increases largely have been attributed to drug use. Sgt. Paul Edwards, Bangor police spokesman, said recently the department does not attribute any increase in crime to the casino.

Bailey doubts that the casino doesn’t bear responsibility for some of those crimes. He argued that if someone loses all their money at the casino and then goes to the grocery store and steals a can of tuna fish, that goes in the books as shoplifting.

“The comments you hear about the city’s development or crime is is all anecdotal,” Bailey said. “Who’s to say if the development and hotel construction wouldn’t have happened if the casino wasn’t there?”

City officials said that the casino has given developers and investors confidence that the city can sustain businesses. Osborne of Hollywood Casino agrees.

“We think Bangor has really started to gain some traction in the past five years,” Osborne said. “We anticipate some secondary development along the waterfront — more hotels, more restaurants, the new arena — and we look forward to being a part of that.”

http://bangordailynews.com/2013/07/13/news/bangor/after-five-years-in-permanent-home-city-says-hollywood-casino-boosted-bangor-growth-spurt/ printed on September 21, 2014