UMaine Economist Assesses Oxford County Slots Revenue Potential
Contact: Todd Gabe, (207) 581-3307; George Manlove, (207) 581-3756
ORONO — New research by a University of Maine economist shows that a casino being proposed in Oxford County by Evergreen Mountain Enterprises could generate between $89.3 million and $99.8 million a year in slot machine revenue.
Todd Gabe, associate professor in the UMaine School of Economics and a fellow in the Center for Tourism Research and Outreach, says that without a detailed survey of casino patrons, however, it is impossible to determine how much of the nearly $100 million would be new money to the region or cash that would have been spent there anyways on other goods and services.
“The projection of $89 million to $100 million is a little more than double what Hollywood Slots generated from their slots in 2007,” Gabe says.
Voters will be asked in a statewide November referendum whether to allow Evergreen Mountain Enterprises to develop the state’s first casino in Oxford County. While the resort would include games like black jack, craps and roulette, Gabe says slot machines alone typically generate in excess of 80 percent of a casino’s total gaming revenue.
A casino would have a substantial economic impact on the local hospitality industry, Gabe says. The projected impact of $89 million to $100 million in slot machine revenue is more than double the $37.5 million in total sales generated in 2006 by restaurants and hotels in the Rumford Economic Summary Area.
By comparison, slot machine revenue generated at Hollywood Slots in Bangor in 2006 was equivalent to about a fifth of the total hospitality sales in the Bangor Economic Summary Area, Gabe says.
Gabe’s research assumes that a casino in Western Maine would attract Maine residents and visitors to the state staying within a two-and-a-half-hour drive of the proposed resort.
“Some of these areas are within the market area of Foxwoods and Mohegan Sun, so I had to account for the money that would be lost to these casinos in Connecticut,” Gabe noted. The analysis shows that Foxwoods and Mohegan Sun would capture $22.9 million to $33.4 million of the money that would otherwise be spent at the proposed Oxford County facility.
Gabe emphasizes that the results of his study are intended to be just part of the information to be considered, along with other economic and non-economic issues, in the decision about the expansion of casino gaming into Western Maine. His report also does not take a position on whether a casino in Maine is good or bad, and he received no compensation for the analysis.
Gabe’s estimates are based on analyses of other states and casinos, including Hollywood Slots, and it assumes visitors to a casino in Oxford County would gamble at the national average. Gabe notes that he excluded Nevada in his study, “because of Las Vegas’ extraordinary nature as the ‘gaming capital’ of the United States and the large number of worldwide visitors that it attracts.”
The Western Maine casino study continues to build on Gabe’s earlier work on casinos and, more broadly, the tourism industry, he says.
For further details, Gabe can be reached at the University of Maine, School of Economics at (207) 581-3307.