BANGOR, Maine — Hollywood Casino is asking the city for a $36.8 million property valuation reduction, arguing the assessment of its gambling complex exceeds fair market value.

If approved, the requested property tax abatement would force the city to refund a total of $876,840 to the property-holding companies of Hollywood Casino Hotel & Raceway Bangor.

City records show the 2014 assessed real property value for the casino and racetrack was $98.2 million, up $3.4 million or 3.6 percent from the prior tax year. The casino’s requested valuation would reduce that by 37.5 percent to $61.4 million.

The casino is not disputing $21.9 million in assessed value of personal property such as gambling machines and furniture.

News of the gambling operation’s abatement request — filed Jan. 9 — emerged Wednesday when City Assessor Phil Drew requested approval from the City Council’s Finance Committee to hire outside legal counsel to represent the city’s interest in the dispute.

“I feel comfortable that the assessment is fair and equitable, so we’d like to move toward a vigorous defense of this assessment,” Drew told the committee.

A casino official on Friday said the abatement request stemmed from a reduction in customers and increased competition in the state’s gambling marketplace.

“The gaming landscape in Maine has changed considerably since the time our property tax was first established,” said Jose Flores, general manager of the casino. “We’re asking that our property tax be revised to reflect the current reduction in our business volumes as a result of continued competitive pressures from Oxford Casino and general softness in the economy.”

According to records maintained by the Maine Gambling Control Board, net gambling income at the Bangor casino has fallen 13.1 percent since hitting its peak in 2012, dropping from $62.7 million that year to $54.4 million in 2014.

The peak coincides with the introduction of table games, which accounted for 10.3 percent of the casino’s total net gambling income. It also coincides with the opening of Oxford Casino, operated by competing Churchill Downs Inc. approximately 124 miles away.

The net gambling income does not include percentages automatically paid to the state or to special accounts such as the University of Maine Scholarship Fund or gambling addiction support services.

During Wednesday’s meeting, Drew proposed hiring Portland attorney William Dale, at an estimated cost of $20,000 to the city, in order to fight the abatement request.

According to city officials, Dale worked with the city previously when Bangor Gas filed an appeal. He is assisting Rockland in a tax dispute with Wal-Mart, they said.

The committee approved Drew’s request without dissent, moving the item forward for consideration by the full City Council on Monday.

“This is a big abatement they want. This isn’t pocket change for any of us,” City Councilor Pat Blanchette said.

Drew has until May 9 to issue a decision on the abatement request. If the casino disagrees with his ruling, it can appeal to the city’s Board of Assessment Review.

If the casino gets the requested abatement, the refund owed by the city could prove difficult to pay.

According to Tax Collector David Little, the city sets aside money each year to cover tax abatements and assessment changes. The city budgeted approximately $342,000 for that purpose this year.

As of Friday it had about $177,000 remaining, but with the City Council expected to take possession on Monday of two properties with about $51,000 in back taxes owed, the account total will likely fall to about $126,000.

That would only cover about 14 percent of the $876,840 property tax abatement being sought.

City records show the casino’s total real property taxes of $2.1 million for 2014 were paid primarily by the holding company Gaming and Leisure Properties Inc., a real estate investment trust formed in 2013 as a corporate spinoff of Pennsylvania-based Penn National Gaming Inc.

Hollywood Casino Bangor LLC, a related company that leases the racetrack site from the city and owns the casino’s personal property, paid the remaining amount.

Penn National operates 32 gaming operations in 16 states as well as one in Canada.

The abatement request was filed on behalf of Penn National and its holding companies by Cleveland-based Ernst & Young LLP, part of London-based Ernst & Young Global Limited, the third largest auditing firm in the world.

Follow Evan Belanger on Twitter at @evanbelanger.