More gambling in Maine would ‘cannibalize’ fledgling industry, casinos tell lawmakers

Rep. Henry John Bear, who represents the Houlton Band of Maliseet Indians, speaks in favor of LD 1111 in front of the Legislature's Veterans and Legal Affairs Committee Wednesday in Augusta.
Troy R. Bennett | BDN
Rep. Henry John Bear, who represents the Houlton Band of Maliseet Indians, speaks in favor of LD 1111 in front of the Legislature's Veterans and Legal Affairs Committee Wednesday in Augusta. Buy Photo
By Nick McCrea, BDN Staff
Posted Jan. 08, 2014, at 6:35 p.m.

BANGOR, Maine — Leaders of Maine’s two casinos told members of a legislative committee Wednesday that the state has reached its saturation point with gambling and opposed a series of bills seeking to expand the industry.

Representatives of some of the groups behind the proposals, which include two of the state’s Indian tribes, told members of the Joint Standing Committee on Veterans and Legal Affairs that expanding gambling could help them survive and prevent financial collapse.

One of the more controversial bills, LD 1111, would allow Scarborough Downs horse raceway to operate slot machines, creating a racino. An effort to create a racino near Scarborough Downs failed in a 2011 statewide referendum by a vote of 215,115 to 176,718. The proposal failed in Cumberland County, falling more than 9,000 votes shy of passage.

Scarborough Downs track owner Sharon Terry told the committee that the track is looking for “a level playing field” against Hollywood Casino in Bangor and Oxford Casino, a much closer competitor located just 45 minutes to the north.

Scarborough Downs has hit hard financial times, according to Terry. She blames that, in large part, to the arrival of Oxford Casino in June 2012 and Hollywood Casino, which has a companion racino. Terry said Downs revenue has dropped 21.8 percent since slots went into operation in Bangor, and that trend has only become more severe since Oxford opened nearby.

“The Downs cannot survive under the current laws,” she said.

Terry also claimed that if the track doesn’t get slot machines, the future of Maine horse racing could be in jeopardy, as it’s responsible for 101 race days per year, whereas Bangor’s track is required to have 25. The bill has support from Maine’s Harness Racing industry.

A portion of Hollywood Casino’s slot revenues supports Maine’s harness racing industry — 10 percent goes toward harness purses, 3 percent toward the Maine Sire Stakes races, and another 4 percent goes toward a fund to encourage racing at Maine’s commercial tracks, according to the state’s Gambling Control Board.

Oxford Casino puts 1 percent of its slots takes each toward harness purses and the Sire Stakes.

The casinos have about 900 slot machines each. Oxford brought in $58 million in slots net revenue in 2013. Hollywood Casino brought in $47 million for that same period.

John Osborne, Hollywood’s general manager; Jack Sours, general manager at Oxford; Bangor City Manager Cathy Conlow; and several business owners from the Oxford area were among those who spoke out against the Downs’ proposal. And they opposed every other gambling bill before the committee on Wednesday because the proposals would put existing casinos at risk.

Other bills included:

LD 31, which would allow charitable nonprofits and veterans’ organizations to operate up to five slot machines at their headquarters to help fund their missions.

LD 1298, an effort by the Houlton Band of Maliseets to operate slots and table games in Houlton.

LD 1520, which would allow the Passamaquoddy Tribe to apply to operate table games and slots at the tribe’s high-stakes beano facility in Washington County.

Each of these proposals would add gambling opportunities in a state that is already saturated and struggling to find customers, Sours and Osborne argued.

Osborne said allowing expanded gambling in Maine at this stage might “cannibalize the industry” because Maine has too few gamblers with too few dollars to sustain more facilities.

“Should further facilities open or expand, we would see further erosion of our customer base,” Osborne said, adding that his casino’s revenues have dropped more than 16 percent since Oxford Casino opened.

Casinos planned in New Hampshire and Massachusetts also could draw Mainers across the border to gamble elsewhere and keep New Englanders from venturing to Maine to risk their money.

“New casinos or racinos in Maine will simply move money from one casino to another and serve no benefit to the state,” Sours told the lawmakers.

Sours said Oxford Casino, now owned by Churchill Downs, has been a hugely important boost for Western Maine, providing badly needed jobs and economic development.

“Expansion will put an end to that success,” he said. Having more locations with slots or table games would hurt existing facilities, cost jobs and stagnate economies in Bangor, Oxford and the surrounding areas, he added.

For Bangor, Hollywood Casino’s potential fiscal struggles would be bad news, according to Conlow, as the city uses all of the casino revenue it receives from gambling operations to pay off the debt it took on in building the Cross Insurance Center.

http://bangordailynews.com/2014/01/08/politics/state-house/more-gambling-in-maine-would-cannibalize-fledgling-industry-casinos-tell-lawmakers/ printed on October 21, 2014