121st Maine Legislature
		Office of Fiscal and Program Review
		LD 1371
		An Act to Allow Slot Machines at Commercial Horse Racing Tracks
		LR 2024(01)
		Fiscal Note for Original Bill
		Initiated Bill
		Fiscal Note Required: Yes
Fiscal Note
					Projections	Projections
			2003-04	2004-05	2005-06	2006-07
Net Cost (Savings)
	General Fund		$925,677	$9,778,168	$15,470,064	$17,176,778
	Fund For Healthy Maine		($530,160)	($5,589,045)	($8,958,510)	($9,968,400)
Appropriations/Allocations ( Requested but not in bill)
	General Fund		$406,387	$2,581,800	$3,929,586	$4,333,542
	Other Special Revenue Funds		$882,414	$8,962,941	$14,325,107	$15,932,246
Revenue
	General Fund		($519,290)	($7,196,368)	($11,540,478)	($12,843,236)
	Fund For Healthy Maine		$530,160	$5,589,045	$8,958,510	$9,968,400
	Other Special Revenue Funds		$882,414	$8,962,941	$14,325,107	$15,932,246
Correctional and Judicial Impact Statements
	Establishes new Class C and D crimes; increases correctional and judicial costs
Fiscal Detail and Notes
	This initiative was approved by the voters on November 4, 2003.  There are still some unknown potential fiscal impacts contingent on the results of votes that may be taken in municipalities in the southern Maine region.  The estimates in this fiscal note assume only one licensed slot machine owner.  If a second licensed slot machine owner is approved before December 31, 2003 the General Fund cost for two is estimated to be in excess of $25,000,000 annually beginning in FY 2004-05.  A second owner will also increase the amount of revenue accruing as dedicated revenue to the Fund for a Healthy Maine and other dedicated accounts to in excess of $35,000,000 annually.
	Using current industry standards, it is expected that 90% of the total slot revenue will be returned to the players. The remaining 10% of revenue collected by licensed slot machine operators will be distributed as follows: 75% is kept by the licensee; 10% goes to the Fund for Healthy Maine; 7% goes for pari-mutuel purse supplements; 3% goes to the Agricultural Fair Support Fund; 2% goes to FAME; 1% goes to the Sire Stakes Fund; 1% goes to the Maine Community College System; and 1% is reserved for administrative costs.
	As stated previously, the bill specifies that 1% of the gross slot income will be reserved for the administrative costs of state agencies.  The estimated revenues that will be generated for this purpose are $53,016 and $558,905 in fiscal years 2003-04 and 2004-05, respectively. The total administrative and enforcement costs that will be incurred by state agencies are $459,403 and $3,140,705 in fiscal years 2003-04 and 2004-05, respectively.  The difference between the amounts reserved for administrative costs and the actual costs of state agencies is $406,387 and $2,581,800 in fiscal years 2003-04 and 2004-05, respectively, and will require appropriations from the General Fund.
	The shift of consumer dollars from Lottery ticket sales and Pari-mutuel wagering to slot machines will reduce both General Fund and dedicated revenue from these sources.
	There will be a one-time revenue effect to the General Fund from reimbursements for the cost of background checks for licensed slot machine operators.
	Presented below is an estimate of the potential revenue and subsequent distribution that may be generated by licensed slot machine operators assuming that there will be one licensed slot machine operator and that by the end of fiscal year 2006-07, there will be a total of 1,500 slot machines authorized by the provisions of this bill. This table also includes a breakdown of the General Fund and Other Special Revenue Funds impacts.
	Summary of Slot Machine Revenue		2003-04	2004-05	2005-06	2006-07
	Total Slot Machine Revenue		$53,016,000	$558,904,500	$895,851,000	$996,840,000
	90% Payback		$47,714,400	$503,014,050	$806,265,900	$897,156,000
	Gross Slot Income		$5,301,600	$55,890,450	$89,585,100	$99,684,000
	75% of Gross Slot Income to Licensee		$3,976,200	$41,917,838	$67,188,825	$74,763,000
	25% of Gross Slot Income to State		$1,325,400	$13,972,613	$22,396,275	$24,921,000
	Required Distribution of Gross Slot Income (25% State Share)
	Fund For Healthy Maine		$530,160	$5,589,045	$8,958,510	$9,968,400
	Purse Supplements		$371,112	$3,912,332	$6,270,957	$6,977,880
	Agricultural Fair Support Fund		$159,048	$1,676,714	$2,687,553	$2,990,520
	FAME		$106,032	$1,117,809	$1,791,702	$1,993,680
	Sire Stakes Fund		$53,016	$558,905	$895,851	$996,840
	Maine Community College System		$53,016	$558,905	$895,851	$996,840
	Administrative Costs		$53,016	$558,905	$895,851	$996,840
	Other Revenue Impacts:
	License fees to the General Fund		$3,500	$13,500	$16,000	$16,000
	Reimbursements to the General Fund		$161,116	$0	$0	$0
	Impact on Lottery - Diverted "Gaming/Gambling" Revenue to Slot Machines
	5% of Gross Revenue		$2,650,800	$27,945,225	$44,792,550	$49,842,000
	25% General Fund Transfer		($662,700)	($6,986,306)	($11,198,138)	($12,460,500)
	Impact on Harness Racing - Diverted "Gaming/Gambling" Revenue to Slot Machines
	2% of Gross Revenue		$1,060,320	$11,178,090	$17,917,020	$19,936,800
	Loss of Revenue from diverted revenue by Fund/Account:
	General Fund		($21,206)	($223,562)	($358,340)	($398,736)
	Subtotal General Fund Revenue		($683,906)	($7,209,868)	($11,556,478)	($12,859,236)
	Other Special Revenue Funds
	- Purse Supplements		($19,086)	($201,206)	($322,506)	($358,862)
	- Sire Stakes Fund		($10,497)	($110,663)	($177,378)	($197,374)
	- Agricultural Fair Support Fund		($12,194)	($128,548)	($206,046)	($229,273)
	- Commercial Racetracks		($13,148)	($138,608)	($222,171)	($247,216)
	- Promotional Board		($2,651)	($27,945)	($44,793)	($49,842)
	Subtotal Dedicated Revenue		($57,576)	($606,970)	($972,894)	($1,082,567)
	Summary of Expenditure Impacts
	General Fund:
	- Agriculture, Food and Rural Resources		$406,387	$2,581,800	$3,929,586	$4,333,542
	General Fund Total		$406,387	$2,581,800	$3,929,586	$4,333,542
	Other Special Revenue Funds:
	- Agriculture, Food and Rural Resources		$684,649	$7,217,693	$11,569,020	$12,873,192
	- Attorney General		$38,717	$68,534	$68,534	$68,534
	- FAME		$106,032	$1,117,809	$1,791,702	$1,993,680
	- Maine Community College System		$53,016	$558,905	$895,851	$996,840
	Other Special Revenue Total		$882,414	$8,962,941	$14,325,107	$15,932,246
	Summary of Revenue Impacts
	General Fund:
	- Reimbursements		$161,116	$0	$0	$0
	- License fees to the General Fund		$3,500	$13,500	$16,000	$16,000
	- Diverted Lottery Revenue		($662,700)	($6,986,306)	($11,198,138)	($12,460,500)
	- Diverted Pari-mutuel Revenue		($21,206)	($223,562)	($358,340)	($398,736)
	General Fund Total		($519,290)	($7,196,368)	($11,540,478)	($12,843,236)
	Fund for Healthy Maine:
	- Proceeds From Slot Machines		$530,160	$5,589,045	$8,958,510	$9,968,400
	Fund for Healthy Maine - Total		$530,160	$5,589,045	$8,958,510	$9,968,400
	Other Special Revenue Funds:
	- Agriculture, Food and Rural Resources		$631,633	$6,658,788	$10,673,169	$11,876,352
	- Attorney General		$38,717	$68,534	$68,534	$68,534
	- FAME		$106,032	$1,117,809	$1,791,702	$1,993,680
	- Maine Community College System		$53,016	$558,905	$895,851	$996,840
	Other Special Revenue Total		$829,398	$8,404,036	$13,429,256	$14,935,406