Oxford Casino: Another casino in southern Maine would be ‘disastrous’

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YES OR NO — Signs for and against expansion of casinos into southern Maine, such as these placed at the entrance into Walmart in Oxford on Route 26, have cropped up.

OXFORD — Local officials say a second southern Maine casino would be “disastrous” to the financial future of the town of Oxford.

As the contentious campaigns for and against a Nov. 7 referendum to approve a second casino in southern Maine get into high gear, local officials say they can’t support another casino in southern Maine because it would spell financial doom for Oxford.

If approved by voters statewide on Tuesday, Nov. 7,  the Question 1 initiative would grant U.S. Virgin Islands developer Shawn Scott or his company the right to build the casino in any York County community that agrees to host it. The local approval must be OK’d by a town or city council, town meeting or municipal referendum vote.

In 2003, Scott won a statewide ballot question allowing slot machines at Hollywood Casino (then Hollywood Slots), which he soon sold to a national company. He knows the gambling industry’s political clout, so once again he bypassed lawmakers and put the southern Maine casino question directly to voters on the statewide ballot.

Proponents say a new southern Maine casino will bring 2,100 permanent new jobs and as many as 2,700 seasonal construction jobs to Maine and generate $248 million during its first five years in operation.

Opponents say it’s a “wicked shady deal.”

Local officials just call the plan’s impact “disastrous.”

“I’m definitely against another casino,” Oxford Selectboard Chairman Pete Lavderiere told fellow board members and residents at the Oct. 19 Board of Selectmen meeting when asked by resident Samantha Hewey for the board’s opinion. “It would be disastrous.”

His opinion was echoed by fellow selectmen Floyd Thayer, Ed Knightly and Scott Hunter who each said they oppose the third casino because of the local economic impact. Selectmen say their opposition is based on the draw down effect another southern Maine casino might have on attracting businesses to Oxford.

Maine voters have been asked seven times to approve casinos in statewide ballot questions over the past two decades, but have approved only two – Hollywood Slots (now Hollywood Casino) in Bangor in 2003 and the Oxford Casino in Oxford, which voters approved in 2010 by only 4,723 votes.

Not surprisingly, Oxford Casino officials have registered a PAC called A Bad Deal for Maine and with its parent company, Churchill Downs, have spent hundreds of thousands of dollars in an attempt to persuade voters to just say no.

Campaign finance reports to the Maine Ethics Commission show three contributions totaling $700,000 in the month of October from BB Development LLC, (Black Bear Development, the owners of Oxford Casino). That amount accounts for almost all the cash contributions to the political action committee.

CDI (Churchill Downs Inc.) contributed $26,965 to the PAC in late September.

The pro-casino political action committee Progress for Maine received $2.5 million from Scott’s Capital Seven LLC in early October and another $200,000 on Oct. 26, according to financial contribution records filed with the Maine Ethics Commission. Several other million dollars in contributions primarily from two other contributors have been reported as well.

The pro-casino group has spent about $3.8 million, according to 11-day pre-election campaign financial disclosures reported on Oct. 27, while the anti-casino group has only spent roughly $600,000, according its 11-day pre-election campaign financial disclosures reported on Oct. 26.

‘Devastating’ effect

“Devastating,” is the word Jack Sours, general manager and vice president of the Oxford Casino, uses when the Advertiser Democrat asked what effect a second southern Maine casino would have on the Oxford Casino.

IMPACT — Oxford Casino General Manager Jack Sours, middle, listens with SAD 17 Board of Directors Chairman Ron Kugell, left, to a discussion about the impact of a second southern Maine casino at the Oct. 19 Board of Selectmen meeting.

The Oxford Casino draws the majority of its patronage from southern Maine, according to Casino officials. Approximately 60 percent of its tracked revenues come from southern Maine and another 15 percent comes from New Hampshire, said Jane McClay Hoyt, advertising & public relations coordinator for the Oxford Casino and Churchill Downs Inc.

With Oxford Casino customers coming largely from those two areas, the development of any other southern Maine casino would take directly from Oxford’s traffic, Sours said.

“We oppose a referendum for a second southern casino. It would be devastating to the Oxford Casino, its employees and the families of employees. We would lose a significant amount of business,” he said.

Further supporting his claim is a report by Clyde Barrow, former director of the Center for Policy Analysis at the University of Massachusetts Dartmouth (commissioned by Churchill Downs, Inc.) to explore the cannibalization effects of further casino development in the region.

The report projected that a southern Maine casino would reduce revenue in Oxford by 50 percent and by nearly 30 percent in Bangor.

Sours said there is a finite amount of demand for a casino.

“We’re satisfying the demand,” he said.

Promises made

In 2010, voters across the state approved the expansion of gambling in Maine and in summer 2012, the Oxford Casino on Route 26 in Oxford opened. At that time Oxford and surrounding Oxford County had among the highest unemployment rates in the state – just above 10 percent. Voters appeared ready for any economic development.

Just prior to the voter approval of the referendum ballot, Rob Lally, co-owner of Mt. Abram ski resort in Greenwood and an investor in the Oxford Casino’s developer Black Bear Entertainment, told about 150 people gathered at the Oxford Hills Comprehensive High School Forum that the casino would bring in new jobs, lots of new jobs.

“The most exciting thing about this is the jobs,” he said.

He projected there would be 1,700 permanent, year-round new jobs with an annual payroll of more than $80 million, he asserted.

“These are all jobs we’re committed to going to the people of Oxford, the people of Maine,” Lally said. “Whenever possible,” Maine companies will be hired for construction and other jobs, he added.

“We will create jobs now,” he said.

Five years later, the promises are tempered by economic reality and the sale of the resort by its local developers less than a year later to the parent company of Churchill Downs Racetrack, home of the Kentucky Derby, for $160 million cash.

While the majority of the jobs are filled by Maine people, five years after the Oxford Casino opened for business, the number of jobs is far lower than projected in 2010.

To date, the Casino has 420 employees, almost all full-time, Sours told the Advertiser Democrat in late October. A new hotel about to open at the Casino is expected to bring in another 60 jobs. The number of employees is the same number officials quoted in March 2013 when it was sold to Churchill Downs.

Lally told voters in 2010 that the Casino would generate $60 million in tax revenue, of which $1 million will go directly to Oxford County, and a large percentage into the state’s education funds.

The Casino generated more than $65 million in net revenues in its first year of operation, topping its original projections, as well as the revenues of the state’s more-established casino in Bangor.

Revenues continued to climb and the Oxford Casino has continually bitten into Bangor’s Hollywood Casino’s bottom line since opening in June 2012.

But despite the promises of financial gains, the new casino and its promises came with some investment costs for the town of Oxford, including the development of a $28 million sewer system and water system upgrades to support the Casino, its possible future expansion, plus expected related business growth in town.

The multi-million dollar wastewater treatment plant customer base is today still far short of the projections made at the beginning of the project.

Some in town worry that the local investments have not paid off.

“There’s frustration on our end,” Hewey told the selectmen at the Oct. 19 board meeting. “Our taxes go up, property values go down.”

Hewey said the Oxford Casino has been in place for five years and she believes the promises that were made have not been delivered.

Promises take time

Despite those concerns, many local officials say the Casino money has been crucial to the financial success of the town of Oxford and Oxford County not only to offset direct impacts from the Casino, but also as a way to reduce the tax burden on property owners.

The town of Oxford and Oxford County received a combined $2.4 million in net revenues from the Oxford Casino in 2016, according to figures released recently by the Maine Gambling Control Board. The town got $1.6 million and Oxford County got $804,942.

Some $1 million in Casino money is used annually to offset Oxford property taxes.

The Casino was then, and is still, seen as the largest economic catalyst in the region – creating jobs, expanding existing businesses and opening new ones. This includes the construction of a $15 million Hampton Inn directly across the street and now construction of the soon-to-be-opened $25 million, 107-room  hotel on the Casino premises.

As a result of the Casino’s construction in Oxford, Sours said nationwide companies such as Applebees and Dunkin Donuts have located in Oxford.

Additionally, a number of small businesses have come to Route 26, including flea markets, restaurants, a fireworks store, antiques stores, and more in the past five years.

“We’ve definitely seen growth,” Sours said.

Construction of a second casino in southern Maine would bring a halt to that expansion, according to Sours.

Code Enforcement Officer Joelle Corey-Whitman said inquiries have been brisk since she was hired by the town of Oxford earlier this year.

“I have many inquiries about what it allowed in the Mixed Use Zone on Route 26.  But just since I’ve been in Oxford an antiques shop, manufactured home business, expansion (of) a local eatery, a new eatery and a Site Location Development Application from Department of Environmental Protection has been done up near the Casino for another new restaurant/retail business,” she said.

Town Manager Butch Asselin who came to Oxford two months ago from Houlton, which is located about 100 miles north of Maine’s first casino Hollywood Slots in Bangor, said he believes more businesses will begin to relocate and open along the Route 26 business strip.

“I believe things are going to happen, but things do take time,” said Asselin.

Phil Richardson, an Oxford resident who moved from Connecticut, home to two of the largest casinos in the country – Foxwoods and Mohegan Sun – cautioned other residents at the recent Board of Selectmen’s meeting the ramifications of quick growth.

“It has to be a long-term expectation of return. There has to be a bit of a plan in place for economic development,” said Richardson.

And Richardson said that locals are hoping for even bigger returns.

“Everyone’s holding out for the big pay day,” he said.

Construction of a second casino in southern Maine would bring a halt to that hope, Sours contends.

Sours said he hears from investors almost daily and they are all asking what will happen if a second southern Maine casino locates in the state.

“They’re still waiting,” he said of the result of the Nov. 7 referendum question.

Until then, all bets are off.

ldixon@sunmediagroup.net