Maine Tribal Casino Opposed by Commercial Gaming Operators, Business Groups

Posted on: March 28, 2019, 02:15h. 

Last updated on: March 28, 2019, 02:15h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

Maine is once again considering proposals to open the state’s first tribal casino, but the idea is getting an icy reception this week in the legislature, as worries surface about a saturated gaming market.

Representatives from the state’s two existing commercial casinos, as well as the local business community, have both opposed the initiative.

The Passamaquoddy tribal representative to the legislature, Rena Newell, urged members of the Veterans and Legal Affairs Committee — where the bills are currently being reviewed — to open a casino, and reduce friction between the tribes and state officials.

One option is to let multiple tribes offer table games and slot machines at an as yet unnamed location at least 50 miles away from Maine’s two existing commercial competitors: the Hollywood Casino in Bangor and the Oxford Casino & Hotel in Oxford.

Besides the Passamaquoddy, participating tribes could include the Penobscot Nation, the Aroostook Band of Micmacs, and the Houlton Band of Maliseet Indians.

Another bill would let the Passamaquoddy operate 50 slot machines at a Washington County gambling hall where beano — the forerunner to bingo — is played. Some 25 percent of net slot machine income would go into the state’s General Fund.

Avoiding Saturated Gaming Market in Maine

When testifying on Monday against the two bills, Jack Sours, vice president and general manager of the Oxford, noted how that casino ultimately led to a new hotel, restaurants, and opportunities for other businesses.

Casino expansion will put an end to this success,” Sours said. “Expanding gaming in Maine, like has occurred in other jurisdictions to the point of saturation, will hurt the existing facilities, cost jobs, and stagnate their development. If you choose to expand gaming at this time, you will kill this successful economic engine for Oxford County.”

He explained that another Maine casino also will “move dollars from one … to another with little or no benefit to the state … After years of growth, the Maine gaming market has simply stopped growing.”

Sours also cited a study by Clyde Barrow, a professor at the University of Texas, who several years ago predicted a casino in southern Maine would reduce the gross gaming revenue of the Oxford Casino by over 50 percent and reduce the revenue of Hollywood Casino by close to 30 percent.

It was also estimated that 95.5 percent of any new casino’s gross gaming revenue would be from displacement and cannibalization of existing Maine casino revenues. With the Encore Boston Harbor set to open in June and current gaming market conditions, that number could be closer to 100 percent, Sours predicted.

Competitive Challenges

Miles Theeman, a member of the Bangor Initiative Economic Development Collaboration, called upon Maine to undertake an economic study on increased casino gambling’s impact on Oxford and Bangor, and the potential for disruption from the Encore casino.

“Then, and only then, should a referendum vote be offered to the people of Maine,” Theeman testified.

Last November, the Maine Supreme Court chose not to weigh in on letting the Houlton Band of Maliseet Indians have gambling on their reservation without first getting permission from the state.

A 2017 proposal to open a commercial casino in York County, located in the southern part of the state, was rejected by voters. Despite over $8 million being spent on a supportive campaign, 83 percent of voters were against the plan.