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127th MAINE LEGISLATURE |
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LD 1280 |
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LR 1572(15) |
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An Act To Provide
Income Tax Relief by Expanding Gaming Opportunities |
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Fiscal Note for
Bill as Amended by Committee Amendment " " |
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Committee: Veterans and Legal Affairs |
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Fiscal Note Required: Yes |
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| Fiscal Note |
Contingent future biennium cost increase - General Fund
Contingent future biennium revenue decrease - General Fund
Contingent future biennium cost increase - Other Special Revenue
Funds
Contingent future biennium revenue increase - Other Special Revenue Funds |
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FY 2015-16 |
FY 2016-17 |
Projections FY 2017-18 |
Projections FY 2018-19 |
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Other Special Revenue Funds |
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$0 |
$500 |
$500 |
$500 |
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| Fiscal Detail
and Notes |
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If York and
Cumberland counties choose to hold referendums during the state primary
election in June 2017, the Department of Secretary of State would need a
General Fund appropriation of $45,812 for ballot printing costs and postage. If the counties choose to hold referendums
during the general election in November 2017, the Department of Secretary of
State would need a General Fund appropriation of $45,812 for ballot printing
costs and postage only if the questions require printing a separate ballot. |
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The bill
establishes the Fund to Reform Veterans Services in the Department of
Defense, Veterans and Emergency Services with a base Other Special Revenue
Funds (OSRF) allocation of $500 beginning in fiscal year 2016-17 in order to
allow the department to spend any monies received. |
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The bill creates a
commission to use a competitive bid process to award the privilege to apply
for a casino to a single applicant. Bidders will pay a $250,000 bidding fee
to win the right to be the applicant. The Gambling Control Board will accept
an application for a casino license in either York County or Cumberland
County from the winning bidder as long as the voters of the county where the
proposed casino will be located have voted to approve a casino. Only one
casino, in either York or Cumberland County, may be licensed. |
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The facility would
be taxed at the rate of 40% of net slot income and 16% of net table game
income. The bill requires a casino, beginning no sooner than 5 years after
operation of slot machines, to make annual capital improvements to the casino
using 3% to 4% of both net slot machine income and net table game income
generated during the previous year or direct those funds to the Gambling
Control Board. This fiscal note assumes the facility will not direct these
funds to the Gambling Control Board. This fiscal note assumes a total of
1,000 slot machines and 24 table games, generating an estimated annual
revenue of $27,635,877 in OSRF revenue and $1,257,931 in General Fund
revenue. |
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Each
non-refundable bid proposal will generate $250,000 in General Fund revenue.
The casino operator license is $55,000,000, with $5,000,000 going to the
General Fund and $50,000,000 going into an OSRF account within the Gambling
Control Board. $126,400 in annual OSRF revenue will be generated from
registration fees on slot machines and table games. The $50,000,000 will
remain in the OSRF account for 5 years after the new casino in York or
Cumberland County becomes operational and then be transferred to the
Department of Transportation, Highway and Bridge Capital Program if Oxford
Casino and Hollywood Casino continue to operate and provide revenue to host
municipalities and counties. If either ceases to operate, then distributions
will be made from the OSRF account to compensate certain municipalities and
counties, with the distributions lasting 5 years and any remaining monies
being transferred to the Highway and Bridge Capital Program. Annual state
costs associated with 5 inspectors, 1 auditor, 1 detective and 1 office
specialist and other related expenses are estimated to be $763,705. |
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Under current law,
if the Penobscot Nation and Passamaquoddy Tribe, the fund to supplement
harness racing purses or the Sire Stakes Fund receive funds from a casino
other than Oxford Casino or Hollywood Casino, then the recipient may not
receive funds from Oxford Casino. This would cause Oxford Casino's tax rate
on net slot revenue to be reduced to 40% from the current 46% rate, resulting
in an estimated annual OSRF revenue loss of $3,032,560 starting in the year
the new southern Maine casino becomes operational and makes distributions to
all three recipients. |
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WhiteSand Gaming's
market feasibility study on expanded gaming in Maine estimated a 20%
reduction in revenue to Oxford Casino if a new southern Maine casino were to
open. This fiscal note assumes the same 20% reduction, resulting in an
estimated annual General Fund revenue loss of $379,070 and OSRF revenue loss
of $5,134,388 when the southern Maine casino becomes operational. An
assessment of the impact on revenues generated by Hollywood Casino has not
been done at this time. |
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Under current law,
State revenue from both Oxford Casino and Hollywood Casino go to various
funds, but this bill directs all State revenue from these casinos to go to
the Gambling Control Board when the new southern Maine casino becomes
operational, until a new distribution of slot machine and table game revenue
is established in law. This results in an estimated annual General Fund
revenue decrease of $8,382,405 and an annual OSRF revenue increase of
$8,382,405. The bill requires the new distribution to be 40% of net slot
machine revenue and 16% of net table game revenue for both Oxford Casino and
Hollywood Casino, resulting in an estimated annual OSRF revenue loss of
$2,285,711 at the time the new tax rates become law. Due to the recipients of
future net slot machine and net table game distributions being unknown at
this time, there is no current estimate on the amount of net slot machine and
net table game revenue that would go to the General Fund and OSRF. |
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The additional
costs to the Office of the Attorney General are expected to be minor. |
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Annual |
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Summary of Casino Revenue |
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Estimate |
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Gross Slot Income (total value of money, tokens,
credits and other value used to play slots) |
$659,190,000 |
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Player Payback - Slot Income |
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$591,293,430 |
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Net Slot Income |
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$67,896,570 |
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Share of Net Slot Income for Distribution - 40% |
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$27,158,628 |
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Operator Share of Net Slot Income - 60% |
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$40,737,942 |
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Net Table Game Income |
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$10,844,880 |
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Share of Net Table Game Income for Distribution
- 16% |
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$1,735,181 |
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Operator Share of Net Table Game Income - 84% |
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$9,109,699 |
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State Revenues by Fund |
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Annual |
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General Fund |
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Estimate |
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General Fund for Southern Maine Casino |
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$1,257,931 |
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Oxford Casino revenue reduced from Southern
Maine Casino |
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($379,070) |
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Oxford Casino revenue was GF, now OSRF |
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($1,516,280) |
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Hollywood Casino revenue was GF, now OSRF |
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($6,866,125) |
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Total General
Fund Revenue |
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($7,503,544) |
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Casino Operator License - 1st year Only, Renewed
After 20 Years |
$5,000,000 |
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Bidding Fee - assumes 2 bidders |
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$500,000 (one-time) |
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Other Special Revenue Funds |
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Gambling Control Board - Annual Registration
Fees |
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$126,400 |
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Department of Transportation Highway and Bridge
Capital Program |
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$5,092,243 |
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Fund to Supplement Harness Racing Purses |
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$3,734,311 |
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Fund to Reform Veterans Services |
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$5,808,975 |
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County Where Slot Machines are Located |
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$678,966 |
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Gambling Addiction Prevention and Treatment Fund |
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$100,000 |
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Sire Stakes Fund |
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$1,018,449 |
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Agricultural Fair Support Fund |
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$1,018,449 |
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Fund to Stabilize Off-track Betting Facilities |
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$678,966 |
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Municipality Where Slot Machines are Located |
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$678,966 |
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Abutting Municipalities |
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$678,966 |
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Oxford County |
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$509,224 |
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Penobscot County |
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$509,224 |
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City of Bangor |
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$339,483 |
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Town of Oxford |
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$339,483 |
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Department of Education |
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$3,055,346 |
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University of Maine Scholarship System and Maine
Maritime Academy Scholarships |
$1,018,449 |
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Maine Community College System Scholarships |
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$1,018,449 |
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Penobscot Nation, Passamaquoddy Tribe, Houlton
Band of Maliseet Indians and |
$1,106,714 |
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Aroostook Band of Micmacs |
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Fund for a Healthy Maine |
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$210,479 |
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Maine Milk Pool |
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$40,738 |
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Oxford Casino Revenue Reduced |
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($8,166,948) |
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Hollywood Casino Revenue Reduced |
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($2,285,711) |
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Oxford Casino Revenue was GF, now OSRF |
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$1,516,280 |
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Hollywood Casino Revenue was GF, now OSRF |
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$6,866,125 |
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Total Other Special Revenue Funds Revenue |
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$25,692,023 |
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Casino Operator License - 1st Year Only, Renewed
After 20 Years |
$50,000,000 |
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Total Revenue - All Funds |
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$18,188,480 |
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Summary of Expenditure Impacts to the State |
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Other Special Revenue Funds |
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-- Public
Safety |
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$126,400 |
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General Fund |
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-- Public
Safety |
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$637,305 |
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Total Expenditure Impacts to the State |
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$763,705 |
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