Hollywood Slots: How the Maine Media Get it Wrong

When an industry that is built on deceiving its customers issues a press release, you'd think that the Maine news media would view it with some skepticism or at least ask a few pointed questions.

Not so when Hollywood Slots, the big casino in Bangor, releases its monthly revenue figures. The Bangor Daily News once again showed its tendency to shill for the casino recently by reprinting the casino's latest press release practically verbatim.

According to the article, the casino had its second best month ever since opening in November 2005. The article compares the July 09 revenues with revenues from July 08, the first month at the permanent facility when the grand opening drove revenues to $75 million. A year later, the July revenues show a decline - to $70.5 million. When housing sales decline year to year, headline writers usually use words like "slump." But according to the BDN, when the casino's revenues decline from a year ago, that rates a headline that says, Hollywood Slots Take in July Tops All Months But 1.

The article says that last month's revenues were boosted by heavy promotions and giveaways, and noted that the rainy weather was on its side. But it fails to mention that in 2009 the casino also expanded its hours to include Sunday mornings (the casino used to open at noon on Sunday's, now it's open at 8 a.m.). So comparing 2009 revenue figures with the previous year is like apples and oranges since the casino has an additional 16 hours a month to rake in the nickels and quarters. It would have been nice for reporters to ask the casino how the new Sunday morning operating hours affected the monthly take, but nobody did.

But probably the most inaccurate and oft repeated statement comes in this line: "A significant portion of net revenue from Hollywood Slots, about 50 percent, goes back to the state in some fashion." Oh really? Again, this is Hollywood Slots putting more spin on their press releases than they put on the reels of their slot machines.

In truth, the state imposes a 39% tax on the casino's net revenues. But to say that money goes to the state is misleading. In fact, only 13% goes to what could honestly be considered state needs (the Fund for a Healthy Maine, 10%; University of Maine scholarships 2%; Community College scholarships 1%).

The rest of the dough, 26%, technically goes to the state, but then does a U-turn and goes back into the hands of gambling interests to subsidize their businesses: 10% goes to boost harness racing purses at racetracks. Four percent goes to something called "The Fund to Encourage Racing at Maine Commercial Harness Racing Tracks." (Nobody knows, not even the Harness Racing Commission, where this money really goes because the Legislature unwisely placed no strings on the money. Does it benefit horsemen in Maine or is it just pocketed by the track owners? Who knows because there is no accountability.) Two percent goes to support the state's off-track-betting parlors, a scandal that the Maine news media continue to overlook. Why are we spending state resources to subsidize privately owned off-track-betting parlors, one of which is owned by a multi-national corporation with annual revenues of over $1 billion? Another is co-owned by the owner of Scarborough Downs, meaning the owner gets a double dip from the state - from the "Fund to Encourage Racing" and from the OTB fund. Another 3% of the slots revenues go to the Agricultural Fair Support Fund, but even Scarborough Downs and Bangor Raceway gets a cut of that action.

So to say that the state gets anything close to 50% of the net take at Hollywood Slots is a miscalculation by at least a factor of three. But hey, who's counting?