Wicked battle over a possible third casino in Maine

For gambling maven Shawn Scott, Maine looks like a good bet. “I believe in the project. It’s worth a shot,” Scott said Wednesday.

Though opponents call his bid to secure a casino license through a public referendum “wicked shady,” it’s possible that voters Nov. 7 will agree with Scott that adding a third casino to the state will provide more money for popular government programs without adding to Maine’s tax burden.

After all, it sounds good. Promoters promise that revenue from the new casino would provide extra cash for veterans, schools, college students, Native Americans and more, all at no cost to taxpayers.

“There’s no downside to the people of Maine,” Scott said Wednesday. “There’s only upside.”

Gov. Paul LePage, who vehemently opposes Question 1, said in a radio address Wednesday that contrary to supporters’ claims, the referendum is not about funding schools, creating jobs or lowering taxes.

“It is about gambling. Period,” he said.

LePage said Maine’s gambling market is already saturated — the state has casinos in Oxford and Bangor — and the proposed new one in York County would merely siphon business away from them.

Sen. Nate Libby, D-Lewiston, said Scott is “pretty much the sole driver” behind the referendum, investing at least $9 million to try to get voter approval for a new casino for which he would hold the license.

Given that a license for a new casino might be worth $200 million, Libby said, it could prove “a heck of an investment.”

LePage called on voters to remember that “in gambling, the house always wins — and the house owns Question 1.”

Scott, who lives on the tiny island of Saipan in the middle of the Pacific Ocean, has a different take. He said that Maine’s been losing “tens of millions of dollars” to casinos in Connecticut and elsewhere that could be spent within the state if it had the gaming facilities commensurate with its population.

Scott warned that  without a new casino south of Portland “a huge amount of Maine money” and jobs would be lost when the much larger and upscale Wynn Boston Harbor opens in 2019.

The ballot measure would increase the number of slot machines allowed in Maine from 3,000 to 4,500. Supporters said the new casino would provide more than 2,000 permanent jobs and contribute almost $250 million in taxes during its first five years of operation.

There may be grounds for believing Maine has room for another successful casino. A 2014 state report by gaming experts endorsed the idea.

Scott said reading the report helped spur his decision to try to win permission for a new gaming resort.

But what makes Question 1 so unusual isn’t that it would allow a new gaming venue. It’s that it would allow only Scott to apply for the $5 million state license to build the casino.

The measure reads that the state’s Gambling Control Board can only accept applications for a license for the new casino “from an entity that owned in 2003 at least 51% of an entity licensed to operate a commercial track in Penobscot County that conducted harness horse racing with parimutuel wagering on more than 25 days in 2002.”

Attorney General Janet Mills’ office looked into it and determined that Capital Seven LLC, a limited liability company formed in Nevada and owned by Scott, is “the only entity eligible to apply for a slot machine or casino license in York County under this initiative.”

What that means in practical terms is only Scott can apply for the license.

Scott said that everyone is free to seek a referendum.

“No one’s excluded from that option,” he said. “This was our idea.”

If it prevails at the polls, he said, there’s nothing to stop someone else from putting another measure on the ballot to open a casino next door to his.

Scott, a gambling kingpin who has operated internationally, secured a referendum win in 2003 to allow slot machines to boost the horse track in Bangor. He quickly sold his stake to Penn National for $51 million, turning a big profit on the deal, and left Maine.

He also sold the rights to a Louisiana casino that he convinced voters there to approve.

This time around, though, Scott said that backers have no intention of cashing out and leaving. He said he’s in it for the long haul.

“I love Maine,” Scott said, and he has no intention of going anywhere if voters give him a green light for the $200 million facility he envisions.

There is nothing in the measure, however, to stop him from changing his mind.

Libby said that if a casino ought to be added, it should arise out of a competitive bidding that would ensure Maine got the best possible deal, not one earmarked for one person to make a bundle.

Scott said that in Maine, the only way casinos have ever been allowed is through ballot questions.

One of the many oddities of the casino referendum is that given the near-unanimous opposition to the proposal from legislators and political leaders, there’s at least a good chance they’d quickly amend the terms of the deal if the measure wins over voters.

As last year’s ballot questions showed, winning on Election Day is no guarantee the Legislature and governor will meekly go along with a proposition they don’t like.

The casino proposal would require the operator to hand over 1 percent of its gross slot machine income to the state for the gambling board’s administrative costs.

It would fork over another 39 percent, allocated among a dozen accounts, including 10 percent to supplement harness racing purses, 3 percent for the support of agricultural fairs, 10 percent for education, 2 percent for scholarships  at the University of Maine and Maine Maritime Academy, 3 percent for municipalities to reduce property taxes, 1 percent for the Penobscot Nation and the Passamaquoddy Tribe and 1 percent for drug education efforts.

Those supporting the referendum blame some of the opposition to it on lobbying by competing gambling interests.

They point out that LePage and a number of other critics “have received tens of thousands of dollars from Kentucky-based Churchill Downs and its lobbying arm in Maine” that wants to block a new casino to protect existing interests in the state.

Churchill Downs owns the Oxford casino, which would likely lose a portion of its business if a new casino opens in southern Maine.

So far, Scott and other proponents have spent nearly $10 million pushing the ballot question. Churchill Downs has plunked down at least $700,000 to fight it.

David Wilson, a partner in the project with Scott, said voters shouldn’t lose sight of the benefits it will bring. He said opponents are relying on “total lies” and character assassination of Scott because they’ll lose if voters focus solely on the merits of the proposal.

Voters have a mixed record on ballot questions involving casinos. They approved the Oxford Casino in 2010, but the following year they shot down a proposal to allow one in Lewiston. They also refused to put slot machines in Biddeford and in Washington County in 2011.

The casino question is one of four on the ballot. The only other controversial one is Question 2, a proposal to expand Medicaid in Maine.

Reprinted with permission of The Sun Journal