121st Maine Legislature
		Office of Fiscal and Program Review
		LD 1820
		An Act To Establish the Gambling Control Board To License and Regulate Slot Machines at Commercial Harness Racing Tracks
		LR 2664(04)
		Fiscal Note for Bill As Amended by Committee Amendment " "
		Committee: Legal and Veterans Affairs
		Fiscal Note Required: Yes
		Minority Report
Fiscal Note
					Projections	Projections
			2003-04	2004-05	2005-06	2006-07
Net Cost (Savings)
	General Fund		$161,116	$323,185	$710,760	$182,799
	Fund For Healthy Maine		$0	$425,832	($1,303,056)	($3,322,800)
Appropriations/Allocations
	General Fund		$0	$1,781,824	$2,088,894	$3,630,776
	Other Special Revenue Funds		$0	$3,025,142	$6,196,338	$15,761,947
Revenue
	General Fund		($161,116)	$1,458,639	$1,378,134	$3,447,977
	Fund For Healthy Maine		$0	($425,832)	$1,303,056	$3,322,800
	Other Special Revenue Funds		($38,717)	($991,813)	$1,294,900	$3,369,480
Fiscal Detail and Notes
	This bill effectively amends certain provisions of IB 2003, c.1 (LD 1371) which authorized slot machines to be located at commercial horse racing tracks.  The revenue impacts of IB 2003, c.1 were factored into budgeted revenue estimates.  The revenue impacts identified above for the General Fund and the Fund for a Healthy Maine reflect the net (incremental) revenue impacts of amending the Inititiated Bill.  However, because the Initiated Bill could not be amended by the Legislature to include the necessary appropriations and allocations it needed, the appropriations and allocations section included in this bill reflects the full costs of enacting this bill (LD 1820).
Revenue Summary of General Fund,  Fund for Healthy Maine and Other Special Revenue
Baseline Revenue from IB 2003, c.1 (LD 1371)
					Projections	Projections
			2003-04	2004-05	2005-06	2006-07
	General Fund
	Baseline Revenue for IB 2003, c.1; LD 1371		$161,116	($337,327)	($414,236)	($1,055,603)
	Revenue Generated by LD 1820		$0	$1,121,312	$963,898	$2,392,374
	Net General Fund Revenue Effect		($161,116)	$1,458,639	$1,378,134	$3,447,977
	Fund for Healthy Maine
	Baseline revenue for IB 2003, c.1; LD 1371		$0	$2,661,450	$3,257,640	$8,307,000
	Revenue Generated by LD 1820		$0	$2,235,618	$4,560,696	$11,629,800
	Net Fund For Healthy Maine Revenue Effect		$0	($425,832)	$1,303,056	$3,322,800
	Other Special Revenue Funds
	Baseline revenue for IB 2003, c.1; LD 1371		$38,717	$4,016,955	$4,901,438	$12,392,467
	Revenue Generated by LD 1820		$0	$3,025,142	$6,196,338	$15,761,947
	Net Other Special Revenue Funds Effect		($38,717)	($991,813)	$1,294,900	$3,369,480
	This bill is different from the initiated bill in several respects:
	First, because of the delay in implementation since the initiated bill became law (effective date of January 4, 2004), the fiscal impacts for fiscal year 2003-04 identified in the initiated bill are no longer applicable.
	Second, this bill replaces the State Harness Racing Commission as the agency charged with the regulatory responsibility for overseeing the use of slot machines at race tracks with a new Gambling Control Board which will be part of the Department of Public Safety.  The use of a different regulatory agency results in different enforcement costs.
	Third, the distribution of proceeds from gross slot income has been significantly changed, including a reduction in the distribution for the owner of the racetrack and new distributions for certain functions of state and municipal government.  A number of distributions to state government remain unchanged.
	Finally, the method by which the regulatory costs of state government are paid has been changed. The Initiated Bill reserved 1% of gross slot income as Other Special Revenue for the costs that would be incurred by Maine State Government to provide administrative and regulatory oversight over the operation of the authorized slot machine facilities.  Because this was not adequate to cover the costs of state government, the fiscal note for the Initiated Bill reflected a significant General Fund cost.  The provisions of this bill, as amended, specify that 4% of gross slot income is to be deposited into the General Fund.  As in the initiated bill, the percentage of gross slot income that has been reserved for regulatory and enforcement purposes in this bill is not adequate to cover those costs and will have to be supplemented by additional General Fund resources.
	Presented below is an estimate of the potential revenue and subsequent distribution that may be generated assuming one licensed slot machine operator with a total of 1,500 slot machines by the end of fiscal year 2006-07.  This table includes a breakdown of the General Fund and Other Special Revenue Funds impacts.
	Summary of Slot Machine Revenue			2004-05	2005-06	2006-07
	Total Slot Machine Revenue			$159,687,000	$325,764,000	$830,700,000
	90% Payback			$143,718,300	$293,187,600	$747,630,000
	Gross Slot Income			$15,968,700	$32,576,400	$83,070,000
	63% of Gross Slot Income to Licensee			$10,060,281	$20,523,132	$52,334,100
	37% of Gross Slot Income to State & Host Municipality			$5,908,419	$12,053,268	$30,735,900
	Required Distribution of Gross Slot Income (37% State & Host Municipality Share)
	General Fund  (4%)			$638,748	$1,303,056	$3,322,800
	Fund For Healthy Maine (14%)			$2,235,618	$4,560,696	$11,629,800
	Purse Supplements  (7%)			$1,117,809	$2,280,348	$5,814,900
	Agricultural Fair Support Fund  (3%)			$479,061	$977,292	$2,492,100
	FAME (4%)			$638,748	$1,303,056	$3,322,800
	Sire Stakes Fund  (1%)			$159,687	$325,764	$830,700
	Maine Community College System  (4%)			$638,748	$1,303,056	$3,322,800
	Other Revenue Impacts:
	License fees to the General Fund			$524,250	$74,563	$124,563
	Reimbursements to the General Fund			$161,116	$0	$0
	Impact on Lottery - Diverted "Gaming/Gambling" Revenue to Slot Machines
	5% of Gross Slot Income			$798,435	$1,628,820	$4,153,500
	25% General Fund Transfer			($199,609)	($407,205)	($1,038,375)
	Impact on Harness Racing - Diverted "Gaming/Gambling" Revenue to Slot Machines
	2% of Gross Slot Income			$319,374	$651,528	$1,661,400
	Loss of Revenue from diverted revenue by Fund/Account:
	General Fund			($3,194)	($6,515)	($16,614)
	Subtotal General Fund Revenue			($202,803)	($413,720)	($1,054,989)
	Other Special Revenue Funds
	- Purse Supplements			($5,749)	($11,728)	($29,905)
	- Sire Stakes Fund			($3,162)	($6,450)	($16,448)
	- Agricultural Fair Support Fund			($3,673)	($7,493)	($19,106)
	- Commercial Racetracks			($3,960)	($8,079)	($20,601)
	- Promotional Board			($798)	($1,629)	($4,154)
	Subtotal Dedicated Revenue			($17,342)	($35,379)	($90,214)
	Summary of Expenditure Impacts
	General Fund:
	- Attorney General			$71,230	$71,230	$71,230
	- Public Safety			$1,710,594	$2,017,664	$3,559,546
	General Fund Total			$1,781,824	$2,088,894	$3,630,776
	Other Special Revenue Funds:
	- Agriculture, Food and Rural Resources			$1,747,646	$3,565,226	$9,091,347
	- Public Safety (Host Municipalities)			$0	$25,000	$25,000
	- FAME			$638,748	$1,303,056	$3,322,800
	- Maine Community College System			$638,748	$1,303,056	$3,322,800
	Other Special Revenue Total			$3,025,142	$6,196,338	$15,761,947
	Summary of Revenue Impacts
	General Fund:
	- 4% of Gross Slot Income			$638,748	$1,303,056	$3,322,800
	- Reimbursements			$161,116	$0	$0
	- License fees to the General Fund			$524,250	$74,563	$124,563
	- Diverted Lottery Revenue			($199,609)	($407,205)	($1,038,375)
	- Diverted Pari-mutuel Revenue			($3,194)	($6,515)	($16,614)
	General Fund Total			$1,121,311	$963,899	$2,392,374
	Fund for Healthy Maine:
	- Proceeds From Slot Machines			$2,235,618	$4,560,696	$11,629,800
	Fund for Healthy Maine - Total			$2,235,618	$4,560,696	$11,629,800
	Other Special Revenue Funds:
	- Agriculture, Food and Rural Resources			$1,747,646	$3,565,226	$9,091,347
	- Public Safety (Host Municipalities)			$0	$25,000	$25,000
	- FAME			$638,748	$1,303,056	$3,322,800
	- Maine Community College System			$638,748	$1,303,056	$3,322,800
	Other Special Revenue Total			$3,025,142	$6,196,338	$15,761,947