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Let the Games Begin: Maine tribes ride into racino race

Last Election day Maine voters soundly rejected a proposed Indian casino resort, opting instead for a state-regulated racino at the Bangor Raceway. Although the sting of that defeat must still be fresh, the Passamaquoddy Nation and Penobscot Tribe, with financial backing from the Mashantucket Pequots of Connecticut, now propose a plan of their own for the harness track.

The tribal plan matches the November referendum in allocating 25 percent of the slot machine win to the state, but goes a significant step further in earmarking another 5 percent for Bangor (as host city) plus another 10 percent for a regional economic development fund. That's 40 percent, off the top, for the racino operating rights.

On Jan. 21, according to the Bangor News, Penobscot and Passamaquoddy leaders asked that state legislators amend Governor John Balducci's recently-proposed legislation to include an open selection process to determine the racino operator.

Penn National Gaming Inc. last month completed its acquisition of the Bangor harness track and is in the process of securing rights to operate slots there. Based in Wyomissing, Penn. the company is publicly owned; it operates casinos and horse tracks in several states and in Canada.

After the crushing defeat of the joint tribal casino plan last Nov. 4, Balducci, who campaigned against the casino, claimed an interest in discussing other avenues of economic development with the two Maine tribes. Well, here's his chance. The joint-tribal plan is good for the following: the state treasury, the two tribal governments and their members, the City of Bangor, and of course the citizens of the area. New jobs and potential new investment in the area through the economic development fund will help the region as a whole.

Penn National would certainly employ a number of Mainers if it were to run the racino, and would pay a gaming tax to the state. But corporate profits would end up in Pennsylvania, not Maine. And the tribes would, of course and again, get nothing.

Balducci is clearly interested in maintaining strong state oversight. Does he know that state regulators have an important role - albeit not a final one - in Indian gaming? Perhaps the governor might speak with Indian gaming regulators in other states or at NIGC, the federal regulator. He would learn that Indian gaming in the U.S. is no joke. As we've said here numerous times, it's a closely regulated and generally well-run business, upon which the livelihoods of dozens of tribes and their members (not to mention tens of thousands of neighboring non-Indians) depend. It is in the tribal interest to keep things clean and by the book.

The tribes are willing to share money. Is the governor willing to share oversight?

New England gaming dynamics

If a new study by a Massachusetts university is correct, Connecticut's state government owes a debt of gratitude to its counterparts in neighboring Rhode Island and Massachusetts. Because Providence and Boston do not permit casino gaming, Hartford is reaping the benefits.

According to "New England Casino Gaming: A Foxwoods Resort & Mohegan Sun, 2004 Update," released this month by the University of Massachusetts - Darmouth's Center for Policy Analysis, out-of-state gamblers from Connecticut' two New England neighbors indirectly contributed an estimated total of $158 million to the Nutmeg state's treasury in 2003.

The study analyzes the "New England patron origin and fiscal impact" of Connecticut's two Indian casinos by applying patron origin ratios from the center's 1999 study to calendar year 2003 financial data derived primarily from the Connecticut Division of Special Revenue and the federal Securities and Exchange Commission.

Of note: The study estimates that Massachusetts residents spent approximately $829 million at the Connecticut casinos in 2003, versus to $620 million in 1998. This translates into an indirect contribution of approximately $116 million to the Connecticut treasury.

Rhode Islanders are estimated to have spent approximately $301 million at Connecticut's two casinos in 2003 compared to $226 million in 1998, resulting in an indirect contribution of approximately $42 million to Hartford.

In 2003, Foxwoods paid $197,930,067 to Connecticut, as compared to $170,033,845 in 1998. Mohegan Sun paid $198,468,407 to Connecticut in 2003, versus $106,154,735 in 1998.

To be sure, the first two sets of numbers above are estimates. But, scholars at Harvard University's John F. Kennedy School of Government conclude that the study's numbers may be conservative since out-of-state casino patrons tend to stay longer than in-state visitors, possibly spending even more money, according to a footnote at the end of the document.

Legislators in Massachusetts failed to pass gaming legislation in 2003, but the effort is likely to be revived. Officials in Rhode Island, however, remain staunch and steadfast in their opposition to anything that even smells like an assertion of tribal sovereignty.

Watching potential revenue bleed across state borders has got to be painful for state and local politicians. Indian gaming is a viable, well-regulated solution that can recapture some of that lost money for the benefit not only of the tribe or tribes involved, but for state taxpayers and local job seekers as well.

Established in 1985, the Center for Policy Analysis at the University of Massachusetts Dartmouth is a "multidisciplinary research unit dedicated to the creation and dissemination of knowledge that facilitates economic, social and political development." The study, authored by center Director Clyde W. Barrow Ph.D., is available at: www.umassd.edu/cfpa/casino.pdf.