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Analyst: Maine Bill a Bad Deal

21 October 2003

MAINE – As reported by the Associated Press: "Maine could do much better than simply receiving $100 million a year from a cut of slot machine revenue if the state auctioned off the rights to open a proposed casino, industry analysts say.

"Auctioning off the license could bring in millions of dollars and the state could still take a share of the slots. The Passamaquoddy and Penobscot Indians have proposed giving the state 25 percent of slot machine revenue if state voters approved their casino proposal on Nov. 4.

"`The bill is a total rip-off for the citizens of Maine,' said Jeff Hooke, a Maryland investment banker and valuation expert who urges states to auction off licenses to operate slot machines or run casinos rather than give away such monopolies for free.

"Hooke said Maine's casino referendum would give the Passamaquoddy Tribe and Penobscot Nation a license to operate a casino, for free, for 20 years. He said states shortchange themselves by doing so. The monopoly licenses could be worth hundreds of millions of dollars.

"…Hooke said if Maine were to auction off a license to operate a casino monopoly in Maine, it would easily fetch $500 million and probably more. And, he said, the state still could demand a 25 percent cut of the slot revenues.

"…In Illinois last year, a group of investors auctioned off its casino license to MGM Mirage for $615 million. The license was for a smaller casino than the one proposed in Maine. The Illinois license permitted only 1,200 slot machines and 60 table games, compared to the 4,000 slots and 180 table games the Maine tribes hope to operate in their proposed casino…"

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