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Slots Revenue Allocation in Maine Reviewed

Posted on August 20th, 2010

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Voters in the state of Maine may have approved a referendum to make way for slots facilities to be installed near horse racing tracks, but up to now, certain concerns on how the revenue the government earns from these gambling facilities are still in question. Now, lawmakers of the state are scrutinizing how the state’s earnings in gambling revenue from Hollywood Slots in Bangor is being spent, and if it is spent the way Maine residents intended them. If the results of the ballot of November 2003 were to be followed to the letter, a portion of the revenues from the slots should be utilized, to quote the referendum, to “lower prescription drug costs for the elderly and disabled, and for scholarships to the state universities and technical colleges.”

Gambling onlookers of the state have acknowledged the fact that there have been indeed millions of dollars funneled from slots revenues to these projects since the start of slots operations. However, many have observed that, in accordance to a complex method of allocation approved by the Legislature after the vote was approved in 2003, millions have also been invested to other gambling mediums in the state, such as its off-track betting stations, harness racing facilities, and the city of Bangor itself. A number of meetings to have the allocation formula reviewed have been set by the Legal and Veterans Affairs Committee of the Legislature to suggest any improvements, the first meeting done last Tuesday. Members of the committee were quick to recognize that because of discussions on certain budget cuts that were made last winter, a lot has been revealed to them with regard to where millions of dollars in revenue collected from the slot machines have gone after the state has collected the money. Thus, the Appropriations and Financial Affairs Committee of the legislature, after approving the budget, also proposed that the formula allocating the revenue to be reviewed every year. This comes in light of a new referendum to be decided on by the voters on the state this coming November.

Rep. Pamela Jabar Trinward (D-Waterville), who also happens to be the co-chairman of the Legal and Veterans Affairs Committee said that it was obvious to them that the citizens of the state want their legislators to be more involved and be more transparent in dealing with the revenue generated from slots. After all, she said that there is a huge amount of money involved in this operation every year and the public doesn’t have an idea of where the money is being allocated to. Sen. Nancy Sullivan (D-Biddeford), the other co-chairman adds that they will have the opportunity to alter what needs to be changed through the meetings but they have first to evaluate the reports to be presented in the meetings. The “cascade,” which refers to the allocation formula of the revenue generated from Hollywood Slots, is actually public knowledge. Although everybody has access to the formula, understanding it may prove to be another concern. What is clear is that the law of the state has a requirement for the racino in Bangor to allocate 39 percent of the revenue from the slot machines to the initiatives mentioned earlier.

To site an example, according to figures submitted to the committee in the first meeting last Tuesday, last year’s revenue, provided $5.2 million (equal to 10 percent of net revenue from the slots) to the Fund for a Healthy Maine. Health programs, such as lowering the costs of prescription drugs for the elderly and disabled, improving nutrition in schools and decreasing youth smoking incidences are the thrust of that group. Among other recipients of the slot revenue were scholarship programs at public colleges and universities in the state ($1.6 million), Bangor, the host city of the racinos ($523,000), horse track racing subsidies to supplement their purses ($5.2 million) and a separate allocation to promote track racing ($2.1 million). Based on these figures, a total of $11.4 million in slots revenues were given to the support of horse racing and agricultural initiatives of the state.

Since majority of the committee members were actually part of the Legislature when the “cascade” was formulated in 2005, most of them do not have sufficient knowledge of the inner workings of the formula. They are now asking the representatives of the racing industry to give them a more detailed report on how slots revenue allocated to them was spent. The next committee meeting is scheduled on Sept. 27.