BANGOR — The slot parlor opened to much celebration, and racked up huge revenue at first. The new casino era looked bright, and a state that had long debated whether casinos were a good idea appeared to have locked in a steady stream of tax dollars.
But then business fell off, and before long, the owner of the casino was lobbying for a substantial tax break.
This is the tale that is playing out in Bangor, where Hollywood Casino has demanded that $850,000 be slashed from its annual property taxes, a reduction of almost 40 percent, and by far the largest tax abatement ever requested in this city of about 35,000 residents.And some casino observers are saying that what’s happening in Maine could be a harbinger of what could happen in Massachusetts if its first casino continues to see a decline in its revenue, especially with as many as four more casinos possibly opening in the state over the next few years.Casino operators, facing fierce competition, will likely argue that they will go out of business without tax relief from state and local governments, said the Rev. Richard McGowan, a Boston College professor and specialist in casinos. “I can’t imagine the casinos in Massachusetts not asking for tax breaks after they’re up and running,” he said.Another casino specialist, Denis P. Rudd, a Robert Morris University professor, pointed to online gambling as a growing threat to casinos, especially daily fantasy sports websites like FanDuel and DraftKings.“Online gambling is eroding the customer base of casinos,” Rudd said. “There are only so many customers to go around.”That was the case an attorney for Hollywood Casino made when he asked Bangor tax assessors for a break on Aug. 5, citing the opening in 2012 of a second casino in Maine.“It’s not good times for the casino industry,” Jonathan A. Block said at the hearing, according to a videotaped recording posted on the city’s website. “The bottom line is that the supply of casinos is exceeding the demand.”New casinos are opening in the Northeast “at a very rapid pace,” he said, driving down the value of existing ones, like the 10-year-old Hollywood.When Hollywood first opened in a temporary facility, following years of debate and a contentious statewide election, it had a monopoly on Las Vegas-style slot machines for hundreds of miles in any direction. Joel Page for the Boston Globe/file 2005 Patrons filed into Hollywood Slots.Hollywood could not expand fast enough, as gamblers came from near and far, quickly growing to include 1,000 slot machines, dozens of tables offering games like blackjack, poker, and craps, a 148-room hotel, and a multilevel parking garage.
Hollywood’s revenue began sliding in 2011, and took a big hit a year later when a rival casino opened in Oxford, about 130 miles away in the western part of the state, according to revenue figures posted online by the Maine Gambling Control Board.
In the last five years, Hollywood has lost about $240 million in annual slots revenue, while Oxford has picked up about $60 million, a net loss statewide of about $180 million.
Maine lawmakers are considering adding another casino in the southern part of the state.
Hollywood Casino is paying more than $2 million a year in local property taxes, based on a $100 million assessment of the value of its land and buildings. Block, however, told Bangor’s assessors that its property is worth about $60 million.
Hollywood also pays a percentage of its revenue to the state, but the casino operator is not challenging that tax.
Plainridge Park Casino, in Plainville, Mass., pays about $1.5 million a year in local property taxes. The slots-only operation enjoyed an overwhelming response from the public in its first week, making it, briefly, one of the most lucrative casinos in the country. But after Plainridge’s gala opening in June, its revenues slipped significantly in each of the next three months.
Those numbers have generated considerable uncertainty about whether Plainridge can hit the $200 million in annual revenue that was projected by the state Gaming Commission before its opening. Plainridge competes in an already crowded market, with three much larger casinos in Rhode Island and Connecticut within a 90-minute drive.
Plainridge is owned by Penn National, one of the top casinos companies in the country. Penn National also owns Hollywood. A Penn National spokesman declined comment.
Andrea Soucy, a member of Plainville’s Board of Selectmen, said Penn National has not brought up a tax reduction for Plainridge.
“Right now, they’re holding up their end of the bargain,” she said.
In Bangor, the board of assessors voted 5-0 to deny Hollywood’s tax abatement, but the case is on appeal before a state board in Augusta.
People interviewed in Bangor said they support the local board’s decision.
“I don’t think a tax break is appropriate for the casino,” said Shelley Miller, a local schoolteacher. “It’s a business, subject to market corrections.”
Even at the casino, patrons expressed reservations.
“When my 401(k) takes a tumble nobody’s there to make up my losses,” said Ronalda Sinclair, visiting from New Brunswick, Canada.
Sean P. Murphy can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .Follow him on Twitter @spmurphyboston.
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