Maine officials weigh Indian casino

Glenn Adams

Wednesday, Oct. 2, 2002 | 9:48 a.m.

AUGUSTA, Maine -- A proposed Indian casino would create 4,740 jobs, and more than twice that total when spinoff jobs are added on, a consultant hired by casino backers told a legislative study panel.

In addition, the casino would generate $124 million in total wages at its start and state revenues equivalent to 5.4 percent of the general fund budget of two years ago, James Klas of KlasRobinson QED told the casino task force Monday.

But some of those who stand to be affected by a gambling resort proposed by two Maine Indian tribes raised other issues, such as where all the new workers would live and whether the new complex would cripple the existing hospitality industry.

"In this case the competitor is a state-sanctioned monopoly," said Richard Grotton, executive vice president of the Maine Restaurant Association.

Local resorts could not compete by bringing in slot machines and offering gambling, Grotton added. "What do they do? Is the only alternative to close?" he asked.

Legislative approval would be needed before the casino could be built by the Penobscot and Passamaquoddy tribes.

Klas, founder of the Minneapolis consulting firm, told the task force that on a balance, "There is a positive economic impact to a casino."

Klas acknowledged that crime rates are higher in areas in other states where casinos have been built, but said the increases are no higher than in areas that have other kinds of tourist attractions.

He said additional public costs of traffic, roads, emergency services and gambling addiction associated with casinos could add up to a few million dollars a year, but that is only a tiny fraction of totals that would be generated by the new complex.

A summary prepared by Klas said the casino would generate $550 million in gaming tax revenues during its first five years. The complex would also include an 875-room hotel and 2,000-seat theater and would cost $650 million to build, the summary says.

While the casino would create 4,740 jobs, it would create more than that number providing goods and services related to the new complex, for a total of 9,870 jobs, Klas said.

Charles Colgan, an economist at the University of Southern Maine who was hired by the tribes to review Klas' study, said the bulk of workers would be York and Cumberland county residents, adding, "Some of the impact will be in New Hampshire."

Other impacts legalized gambling might have in Maine are less clear.

Speaking to the task force through a conference call from Washington, D.C., Keith Whyte of the National Association for Problem Gamblers said pathological gambling is no worse in regions where gambling is legalized than where it is illegal.

Whyte also noted that 65 percent of the total population gambled in some way last year, leading to a conclusion that "gambling today is normal activity for individuals," Whyte said.

But he said the state should be prepared to treat problem gamblers, noting that the disorder is often more difficult to overcome than problem drinking.

Maine State Lottery Director Eben Marsh said the state has done no study on the impact of a casino on Maine's lottery games.

But studies looking at the impacts in other states show a connection between lottery sales and revenues around the time casino gambling was allowed, but in no case was the decline substantial. Marsh added that state revenue losses have been more than made up by new revenues generated by casinos.

Marsh said players spent $158 million on Maine lottery games during the past 12-month budget period. The lottery provides about $48 million a year in state revenues. By comparison, the casino would generate $130 million in state revenue in its third year of operation, Klas said.