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Penn National Gaming Inc. Message Board

  • acricketeer acricketeer Apr 14, 2004 7:56 AM Flag

    PENN Doesn't Need Maine Racinos

    They already have gambling in Canada. Bangor is sparsely populated, especially in the winter. In fact, I thought that PENN was up in the morning yesterday because it appeared as if they were creating a situation from which they could walk away. While Acadia National Park is a vacation destination, it's more for photographers, nature lovers and families than for the casino crowd. Southern Maine, it's true would be alot more attractive, due to its proximity to Maine beaches and Massachusetts, but Scarborough was always a wild card.
    So they offended one of the legislators with a lobbyist, big deal. It's amazing how big these pony league polticians' egos are. I'll judge PENN's success as much from avoiding bad investments as making good ones. If they saw negative cash flow from this deal, they'd be smart to walk away. Maybe they had to alienate her in advance, knowing that it wouldn't pass anyway, to give them an out.

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    • Late Wednesday, Penn lobbyists were still shopping for a sponsor to offer another amendment to replace the hefty new tax with a one-time $3 million fee to help with state administrative costs.

      Gagnon predicted any such proposal would meet a swift defeat.

      "There will be no agreement on that," said Gagnon, who has repeatedly asserted that the tax won't cause Penn officials to walk away from the deal, despite daily suggestions they might.

      Little had changed Wednesday.

      "We remain concerned about the effect [the tax] would have on this project moving forward," Penn spokesman Eric Schippers said. "We obviously have a very important decision to make."


    • cricketeer, I enjoy your discussion on options strategy I think it is well thought out and insightful. On some aspects of this issue however I think you are wrong.

      PENN didn't need Maryland (Rosecroft) and they are delighted that no one else has Maryland either. They didn't need Rhode Island either, but now two of the top gaming companies in the world are fighting to outbid each other for it. PENN certainly didn't need Shreveport, but they took a gamble there. They didn't need another location in Illinois, but three other companies offered from $485-$520 million for one there. As has been said here many times, PENN does not need Pennsylavanie either, but how wise would it be to let someone else have it?

      PENN needs additional locations in more diverse areas to reduce the economic concentration on West Virginia and Illinois. There is a new paradigm in state legilsatures across the country as to how that happens and in what final form.

      PENN has been applauded here many times for their cautious approach and long term strategy in Maine, but they shot themselves in the foot in the Maine House.

      First; depending on how the legislator came to that perception, they turned an ally into an adversary, and "hell hath no fury like a woman scorned".

      Second; they only need 18 votes to get their amendment attached to the Bill in the Senate, while they would likely have needed at least 71 in the House.

      I agree that if PENN believes that this is ultimately a bad investment on these terms they should walk away, and I am sure there deal with Capital Seven and/or Bangor would allow them to walk anytime, there was no need to alienate anyone in the process. The Indians however will be more than happy to step right in, they have a regional track record and could probably do so seemlessly.

      I don't believe PENN believes this however and I think they are committed to a long term strategy in Maine, and will need legislators support both now and in the future when they want to move into southern Maine after proving themselves in Bangor.

      PENN has probably invested $500K in lobbying and legal fees alone in Maine, not to mention what they paid/will pay Capital Seven, and what they intend to invest in the facility. Someone needs to be more carefull that they don't piss away that investment by being perceived as untrustworthy in their dealings with the legislators.

      • 1 Reply to furlong426_99
      • Appreciate your reply. You're also a good writer and make a cogent argument. I do agree that they need additional venues to keep their earnings growth on track. I was just wondering about the demographics in Bangor. Also, it seems that all the states nationally are trying to grab a bigger share for themselves and the public. It's possibly that the lobbyists that they hired really blew it. Now it's a question on whether to step back or open a less profitable location.

    • I am still baffled as to how the current legislation results in an "effective 49% tax rate" for Penn. Can someone please explain this?


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