AUGUSTA, Maine — The economy is affecting gambling revenues for the state with members of Maine’s Revenue Forecasting Committee this week tentatively projecting lower revenues from both Hollywood Slots and the Maine State Lottery.
“It’s pretty clear that the economy is having an effect on racino revenues,” Grant Pennoyer, director of the Legislature’s Office of Fiscal and Program Review, said Wednesday. He is one of the six members of the committee.
“There is a very pronounced drop in revenues from the first few weeks of when they opened the new facility,” Pennoyer said, referring to Hollywood Slots Hotel and Raceway, which opened its new location in Bangor on July 1. “They had a big start, but it has come down a lot.”
Pennoyer said the panel, which meets periodically, is charged with estimating current budget year state revenues and revenues over the next two-year budget cycle. He said committee members used actual data on how much is being bet on average at each slot machine at Hollywood Slots to project revenues.
“They nearly reached $3,500 a machine in that first week. That was phenomenal,” he said. “We are now seeing that in the $1,800 [per] machine area.”
Pennoyer said it is clear that revenues need to be reprojected down for the racino, but by how much is not clear. The panel has drafted a first estimate that revenues from the racino will be down $3.6 million this year and that revenues for the two- year budget cycle should be reduced by about $4.5 million a year. The panel meets again next month and will review their adjustment.
“I hope we can get [Hollywood Slots General Manager] Jon Johnson here for that meeting so we can have a further discussion about our assumptions,” Pennoyer said.
Gambling Control Board Executive Director Robert Welch said he is convinced the economic downturn in general and the high price of gasoline in particular has had an impact on Hollywood Slots. He said that less disposable income means less gambling.
“Discretionary spending is being taken up by high fuel prices,” Welch said. “We know that a gallon of gas has come down obviously in the last couple of weeks. I think you will see better figures in October because people have a few extra dollars in their pocket after filling up.”
Johnson of Hollywood Slots said Wednesday that he could not get into specifics regarding proprietary matters, such as patron counts and revenues.
He did, however, offer a general observation. “The recession is affecting everybody — retailers, hoteliers, restaurateurs. We’re no exception,” Johnson said.
Welch said that while there is no comprehensive data available, there is clear anecdotal information that casinos across the country are being hurt by the economy.
“Mohegan Sun [in Connecticut] has stopped construction on a new hotel,” he said. “Foxwoods [in Connecticut] laid off 700 people just a few weeks ago. Everyone is pointing to the economy as the reason.”
Pennoyer said that other organizations and agencies that share in the revenues from Hollywood Slots will also be affected by the re-projections. He estimated the Fund for a Healthy Maine, for instance, would lose more than $1 million a year.
A reduction in Hollywood Slots revenue also affects scholarship funds for the University of Maine and the Maine Community College System and support for the harness racing industry and agricultural fairs. The city of Bangor will also get less than expected for its 1 percent share as the host community for the racino.
The panel on Tuesday heard that Maine State Lottery revenues are also failing to meet projections. Lottery Director Dan Gwadosky said both instant ticket and online game revenues are not meeting original estimates.
As of Oct. 25, instant lottery tickets were down 8 percent, he said. “Online sales are down 9.7 percent. I am not as concerned about online sales because they fluctuate rather dramatically based on the size of the jackpot.”
Gwadosky recommended the panel reduce revenue expectations from the Lottery by $500,000 this budget year and in each year of the next two year budget.
But he brought the panel some good budget news too. He recommended that revenue from liquor sales be increased by $500,000 a year for each of the three years. He said there has been a slow but steady increase in the purchase of liquor, and that increase shows no sign of slowing down.
The committee expects to finalize its revenue numbers next month so Gov. John Baldacci can complete work on his proposed emergency budget to bring the current budget into balance and on his proposed spending plan for the next two year budget cycle.
On 10/30/08 at 5:26 AM,
Dallas2244 wrote:
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IT'S TOO BAD WE HAVE TO RELY ON GAMBELING DEVICES TO HELP BALANCE OUR STATE BUDGET.
On 10/30/08 at 6:05 AM,
mrclam wrote:
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It looks like it's time to expand into prostitution to help with the state's cash flow.
On 10/30/08 at 7:00 AM,
miserahe wrote:
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Finally, Good News--if people can't afford to gamble--they drink more. Great!!
On 10/30/08 at 8:47 AM,
Lilyfan wrote:
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I find it very interesting that Dan Gwadosky is happy that Mainers are drinking more liquor.. This will likely result in more problems for the state police and our court systems but I guess he thinks that the answer is more money through liquor.
On 10/30/08 at 8:57 AM,
Diana22 wrote:
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HA HA,...i hope Hollywood Slots closes. i give it five years.
On 10/30/08 at 9:09 AM,
Deschain wrote:
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I hope so Diana.
What i don't understand is why the Indians can't have a casino yet we are again being asked to support another gambling proposal?
On 10/30/08 at 9:49 AM,
pjramsay wrote:
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Are Mainer's drinking more or are we just not driving to New Hampshire as much to make purchases? If the gas prices were forcing you to purchase locally that would explain the increase. Mr. Gwadosky may have to amend his prediction as the price of gas stabilizes.
And since the price of gas is down, the tax the state collects is down as well. So the solution is that every time you fill the tank you get a free lottery ticket. And if you buy $20 of lottery tickets you get a free six-pack of beer. Incentives Mr. Gwadosky, is what makes people spend more. Or maybe we could actually start the Megabucks drawing a one million since you admit that the sales are predicated on size of the jackpot.
Just a thought........
On 10/30/08 at 9:55 AM,
Cherry wrote:
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I thought people gambled more when the economy was down.....more desperate. TO Deschain: there is too much racism to allow the "indians" to have a casino, christ, there was so much racism, it didn't pass even though the majority of folks in Washington county, indian and white alike wanted the casino. Can't let them indians have anything, I mean, we took their land to begin with, can't change now...
On 10/30/08 at 10:06 AM,
Philster wrote:
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When the state leased the liquor business they received $125 million for 10 year lease which is $12.5 million PER YEAR. Profit sharing is also included which was only $5.5 million for 2007 according to the Bureau Of Alcoholic Beverages. This money goes to the general fund.
When the state had liquor stores the average money that went into the general fund from 1986-2004 was $28.8 million PER YEAR. It was $1,713,348 in 2005 and $25,653 << not a misprint in 2006.
And you wonder was the state has no money.
On 10/30/08 at 11:06 AM,
SteveyDee wrote:
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That's because the Indians could't even run a yard sale with out somehow screwing it up.
On 10/30/08 at 11:29 AM,
tdanella wrote:
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Why don't you rely on state officials to do their jobs and balance our budget? And of course casino revenue is down, read the headlines today-"The economy is shrinking." Miserahe, you must think only poor people gamble.
On 10/30/08 at 12:28 PM,
ChrisM wrote:
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When you rely on gambling and alcohol to fund your budget, you've got a problem. Maine is one of the highest taxed and lowest income States, and the government you all elected thinks that we should boost the State budget with gambling and drinking? What is your problem? We need leaders that are going to lower taxes and bring in businesses that produce jobs...not jobs that TAKE AWAY our money, but jobs that PRODUCE income. Of course there is going to be a drop in income from gambling. You need money to gamble!!!! And now they want to increase the gambling in Maine. Will we never wake up? Mainers need to start taking care of business on our own in our own communities and not expect the government to take care of us.
On 10/30/08 at 8:18 PM,
HotLotto4Maine wrote:
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The New Hampshire Lottery, since before ME joined Powerball, has had the larger (than T-S Megabucks) MUSL game "Hot Lotto", whose jackpot has climbed to nearly $10 million. The Hot Lotto game, like PB, has its own multipler (HL's is called "Sizzler".) Maine needs to realize that numbers players want to win millions of dollars; T-S Megabucks begins at 500k. The Maine State Lottery needs to seriously consider joining Hot Lotto, which has grown from 6 members in 2002 to 12 states and D.C. today. With Arkansas expected to approve a lottery next week, Arkansas may very well join Hot Lotto as well as PB.
On 10/31/08 at 8:53 AM,
belowmymeans wrote:
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If Vegas is hurting and Foxwoods is too, why on Earth are we being pushed to open a casino in Maine? Good timing on the story. Thank goodness it didn't appear after voting day. I really don't see how it'll help anyone in the state in the long run. Us locals already have enough things to spend money on in the state...oil, gas, food and shelter. I've been on-line on various sites and have asked quite a few people and NONE of them could see themselves coming to Maine for gambling.
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