The University of Maine student newspaper since 1875
Sunday, April 19, 11:08 p.m.

Slots support scholarships

System may hit jackpot if ballot questions pass

Whether Maine has benefited from the gambling industry over the last decade as many expected is in the eye of the beholder; however, one major player in the state’s industry, Hollywood Slots, has generated $147 million in tax revenue since 2005.

Approximately $55 million — 20 percent of those tax revenues — went back into Maine’s harness racing industry, according to Hollywood Slots.

Since 2005, the University of Maine System Scholarship Fund has received about $5.1 million from slots revenue paid to the state by Hollywood Slots, which amounts to about 2 percent of the total slots-related tax revenue. This amount fits the legislature’s requirement and builds a fund used to distribute need-based scholarships to students at any campus in the system.

Likewise, the Maine Community College System Scholarship Fund earned approximately $2.5 million, or about 1 percent of tax revenues, according to Maine’s Gambling Control Unit.

Since 2005, Hollywood Slots revenue has increased each year. The taxes collected by state and local government have gone from $19 million in 2006 to $30 million in 2010, according to the Maine Gambling Control Unit.

This November, Maine voters will decide on two ballot questions with the ability to generate new funding for both scholarship funds.

A yes vote on Question 2 would permit the construction of slot machine facilities at harness racing tracks in Biddeford and Washington County.

According to Crystal Canney, spokeswoman for the Yes on 2 campaign, such facilities would generate $3 million in new annual funding for higher education. She said those numbers are “transparent and credible” because they are provided in a fiscal note by the Maine Office of Fiscal and Program Review.

Also this November, voters in Penobscot County will decide if table games should be added at Hollywood Slots in Bangor. If voters give the go-ahead, it would mean nearly $500,000 in new annual funding for both the University of Maine System, the Maine Community College System and Maine Maritime Academy, according to a state fiscal note.

Proponents of the ballot questions say the revenue stream will only grow with new facilities — and maintain some money is better than none.

Hollywood Slots general manager John Osborne said adding table games would mean 89 new jobs, an additional $4 million in annual salaries and benefits to workers, and $1.4 million in additional annual tax revenue for the state. 

Dennis Bailey, executive director for CasinosNO!, a group dedicated to stopping the spread of casino gambling in Maine, said the public is being deceived by gaming-related campaigns that promise the state more tax revenues than it can actually receive. 

“[Tax revenues] are not allocated fairly, and the campaigns have confused the public,” Bailey said. “The problem is these campaign promises [that are made] when they’re trying to get a casino built. It’s a show game. They say the state will receive around 40 percent of the revenues, but in reality it’s something like 14 percent.”

Bailey said most of the tax revenues go to off-track betting parlors rather than worthy causes such as higher education or health care. 

“Is this the priority in our state?” he asked. “Off-track betting over community colleges and universities?”

But Dave Daigler, chief financial officer for the Maine Community College System, said every bit of scholarship money counts.

“We appreciate any additional funding we receive for scholarships,” Daigler said. “Whether or not the funding stream and allocations are fair isn’t a concern to us. We were able to give over 200 of our students $1,000 each from that fund over the last two years, and it’s a big boost, especially for those less fortunate.” 

An initiative underway to build a casino in Lewiston, according to the Maine Office of Fiscal and Program Review, would generate an additional $486,783 for capital improvements to University of Maine System campuses, Maine Maritime Academy and the state’s community colleges. 

Laurent Gilbert Sr., mayor of Lewiston, recently noted in a letter to The Maine Campus that a revenue-sharing component of the project would contribute funds to local municipalities and all 16 Maine counties. He also noted the cuts to state programs that could be filled by any new funding from the establishment of a casino in Lewiston. 

But proponents of expanding Maine’s gaming industry are at odds with opponents who say the whole funding process is flawed. They feel that Maine is missing an opportunity to better use gambling dollars.

Unlike other states, where lawmakers decide how to spend gaming revenue, Maine has turned that process over to the gaming industry itself. Chris O’Neil, spokesman for Mainers Against a Rotten Deal, a group opposing new gaming initiatives, told the Portland Press Herald in early October that casino developers are “sprinkling around the money in strategic places for political gain.”

But this point of view has proved difficult to explain, with tax revenue generated by Hollywood Slots in the last 10 years funding construction of a new civic center in Bangor.

Editor in Chief Michael Shepherd contributed to this report.