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April 1, 2010 | last updated December 1, 2011 5:25 am
Bangorbiz

A Q&A with John Osborne, GM of Hollywood Slots

Photo/Robert M. Cook
Photo/Robert M. Cook
John Osborne, general manager of Hollywood Slots in Bangor

It's been a busy six months for John Osborne, general manager of the Hollywood Slots Hotel and Raceway in Bangor. As he mans the helm of the downtown racino, Osborne says he continues to guide the renovation of his home in the city while his wife, Janet, ties up loose ends at the family's home in Mississippi, where Osborne operated Penn National Gaming's Hollywood Casino in Tunica for 16 years.

Penn National Gaming made a $130 million investment in the Bangor racino, which includes 1,000 video gaming slot machines, a 152-room hotel, business meeting rooms, a restaurant and lounge. The racino employs 450 people. In 2009, Hollywood Slots generated $60 million thanks to the patronage of 50,000 to 60,000 visitors each month, most of whom come from a 90-minute radius of the facility, although Hollywood Slots has seen visitors from Portland and Canada.

Mainebiz sat down with Osborne to discuss some of the racino's challenges and how Hollywood Slots views potential competition from Black Bear Entertainment's proposal in Oxford County, which will go before Maine voters in November, and the Passamaquoddy Tribe and Penboscot Nation's renewed effort to create a casino in Washington County. Yesterday, the House nixed a plan to put only the Oxford casino question on the November ballot, keeping the possibility alive that Hollywood Slots could put its bid for table games to voters as a competing measure.

An edited transcript follows.

Mainebiz: How is business these days?

Osborne: Business has been brisk, this being our second full year of operation in the permanent facility. We opened in the summer of 2008. 2009 was our first full year of operation. 2010 has started briskly and the revenues have exceeded our projections.

How much more would your business grow if the Legislature approved table games at Hollywood Slots?

We've estimated that the table games would generate approximately $8 million in additional revenue on the table games [themselves], but that the addition of table games creates a more complete casino environment, which is more attractive to typical casino patrons, and we estimate that the activity on the slot machines as a result of adding table games would also increase by about approximately $6 million a year. So in the first full year of operation with table games, we believe revenues could be increased by $14 million.

How does Hollywood Slots in Bangor differ from Penn National Gaming's other facilities?

This location is one of the smallest facilities that Penn National Gaming operates. By comparison to our largest properties, the revenues would equate to approximately 10% to 15%. By comparison, we have casino operations that are doing $40-plus million a month in revenue. We are approximately $5 million a month here.

How does Hollywood Slots view the competing proposals from Black Bear Entertainment in Oxford County and the Passamaquoddy Indian tribe and Penobscot Indian Nation in Washington County?

We as a company have never opposed a gaming initiative within Maine, and there have been several. We do oppose the Oxford County initiative and that is simply because the Oxford County initiative creates an unlevel playing field. Under the Oxford County initiative, we would be denied table games if the voters approved [it] and they would have table games. ... It also is at a lower tax rate than what we presently pay on the slot machine activity. We presently pay 51% of our dollars right off the top [that] go right to the state and to different recipients. In Oxford County, it would be only 46%.

As far as the Penobscot or even the Passamquoddy tribe, which is also trying to have a casino approved on their native lands, we quite frankly support them in their efforts and we wish them the best of luck.

Is there room for multiple casinos in Maine?

It depends upon the location. If you're in an area that has high population densities, more generally is better because it gives the customer the opportunity to have multiple experiences during the same visit ... In an area that has a very small population, multiple casinos simply couldn't survive.

Just recently, the Maine Legislature debated the issue of increased funding for services to help people who become problem gamblers. How does Hollywood Slots view this issue and what steps have you taken to help your customers who may have this problem?

Firstly, we support having any type of help available if a person believes either themselves or someone they know has a gambling problem. What is interesting is after four years of operation and four years of funding a gambling helpline in the state of Maine, not a single person has used it.

We created a program of self-exclusion [that includes 167 people], where customers [who] want to take a break ask us to take the next step to exclude them from the casino. ... It can range from as short as one year or a lifetime. It's something that we take very seriously ... If they're self-excluded for the casino, we do not allow them on the property. We do not allow them in the restaurants, we do not allow them in the hotel or the meeting rooms. Our security forces are trained to help identify anyone that might want to come back after they have been self-excluded and they will escort them off the property if we find them.

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