Maine has room for one or two more casinos, study suggests

People play Texas Hold'em at the Hollywood Casino in Bangor last year.
Gabor Degre | BDN
People play Texas Hold'em at the Hollywood Casino in Bangor last year. Buy Photo
Posted Sept. 02, 2014, at 7:19 p.m.

AUGUSTA, Maine — A new study commissioned by the Legislature suggests the state could sustain another casino or two depending on the size and location.

The study released Aug. 30 shows the state’s economy easily could handle one more casino as long as it is in southern Maine, which likely would be in direct competition with Maine’s largest casino in Oxford.

The study also suggests another smaller casino in northern Maine, in either Washington or Aroostook county and close to the Canadian border, would work if it were limited to 100 slot machines and no more than 10 table games.

Members of the Legislature’s Veterans and Legal Affairs Committee are expected to review the study Sept. 10.

A special task force of lawmakers and others formed in 2013 to study the issue of expanded casino gambling in Maine. The task force was unable to complete its work and broke down in controversy, prompting the committee to seek an independent consultant to study the economic viability of additional casinos.

The study, issued by WhiteSand Gaming, based in Atlantic City, New Jersey, shows for another casino to make it in Maine, it would have to be in the south, close to Interstate 95 and popular summer tourist attractions.

“Southern Maine includes not only substantial Maine population but is positioned to draw upon important demographics in New Hampshire and Massachusetts,” according to a summary of the study.

The $110,000 study was meant to give lawmakers a clean slate for developing workable policy proposals that weren’t based on a particular set of constituents’ desires, state Sen. Garrett Mason, R-Lisbon, said.

Mason, the lead Republican on the committee, said Tuesday that he had begun to review the 138-page study and was encouraged it would give lawmakers a fact-based document to work from.

“There’s been a question about every study that’s come along in the past because it’s been connected to a group of people or a group that is looking to get a casino,” Mason said. “This study is unbiased and focused on what’s best for Maine and what’s best for the state going forward with gambling.”

Mason said he believed the study could be trusted and that it was commissioned in an honest and open process.

“What we’ve seen in the past is basically legislators doing what’s best for a particular constituency and not taking a look at the policy as a whole,” Mason said. As Maine already has legalized casino gambling in two places by referendum, the state must take an objective look at a fair casino policy for the future, he said.

“We have to deal with what we have now, as it pertains to gambling, and this will give us a good road map going forward,” Mason said. “I’m hopeful this will allow us to develop soundly crafted policy.”

Among other things, the study suggests what the state should charge in license fees and what the minimum investment for a casino developer in southern Maine should be.

The study suggests the five-year license fee be set at $5 million. That fee is in addition to more than $300,000 in application fees as well as an annual fee of $100 per slot machine for any new casino. The study also suggests any new casino be required to make annual capital improvements equal to 3 percent to 4 percent of its annual profits and that it make an initial development investment of $250 million.

The study suggests that any new casino license for southern Maine be awarded based on a competitive bid process and that a similar process would be required for a northern Maine casino. The study also suggests the Legislature could limit eligible bidders for a northern Maine casino to allow the state’s American Indian tribes a competitive advantage.

Among other details, the study shows that Oxford Casino took in more net revenue from both slots and table games in 2013 than the state’s more established facility, Hollywood Casino in Bangor.

Oxford Casino took in $58.4 million in slots revenue and about $13.3 million in revenue from its table games in 2013. Hollywood Casino took in $47.3 million in slot machine revenue and about $7.4 million in table game revenue.

Both casinos have revenue-sharing agreements in state law and both contribute to the state’s coffers in significant fashion. The study suggests that any new casino in Maine would follow similar contribution levels.

Both Maine casinos were approved by voter referendum, while voters have on at least three other occasions rejected casino proposals, including casinos in Lewiston and Washington County in 2011.

Lawmakers also rejected a host of bills seeking to expand casino gambling in Maine, including measures that would have allowed Indian tribes to host casinos on their land.

The study’s release coincides with news on the national level that casinos in Atlantic City are closing — largely because of competition from other facilities in the nearby states of Pennsylvania and Maryland that have sprung up in recent years.

 

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