The fallout from question 3

Whether Joe Ricci’s video gambling referendum passes or not, the consequences to grassroots initiatives will still be felt

By Lance Tapley

Ballot question 3, on whether the Scarborough Downs racetrack should be allowed to build a huge gambling casino, is a very rare instance in which a state initiative bill — there have been 1925 of them across the country since 1904 — has been designed to benefit a single business.

Essentially, the bill benefits one man, Scarborough Downs’s controversial owner and two-time Democratic primary gubernatorial candidate Joseph Ricci. If it passes, it will establish big-time gambling — worth, everyone agrees, millions of dollars a year in income — over which Ricci will have a virtual monopoly.

Question 3 is important beyond the issue of gambling. Because some state leaders across the political spectrum see Ricci’s bill as an egregious, private abuse of the initiative process, if it passes — and even if it doesn’t — there may be strong efforts in the next Legislature to restrict the ability of people to initiate ballot measures. Such restrictions could have a great impact on grassroots citizen groups.

Anatomy of a misleading question Question 3 is misleading far beyond the normal vagueness of many ballot questions. The sentence voters will face is: “Do you want to allow video lottery machines at certain horse racing tracks if 40% of the profits are used for property tax relief?” A more accurate question would be: “Do you want to give Joseph Ricci a virtual statewide gambling monopoly of, possibly, an unlimited number of video poker-type and, possibly, slot machines located at Scarborough Downs and, possibly, at other betting parlors, if 40% of the profits, based on Ricci’s accounting, are given to cities and towns, which can spend the money any way they wish?” And the lengthy bill that would be enacted if the people say “yes” on November 7 has loopholes and strange provisions such as the possibility that it opens the door to more machines than the 1500 its proponents say would be at Scarborough Downs as well as an odd prohibition on the use of the word “casino.” At a recent press conference, the bill’s opponents, the No Dice committee, criticized the wording of the question. They unsuccessfully tried to convince Secretary of State Dan Gwadosky, who approved the question, to reword it. Here are some of the claims about the language made by No Dice and other critics, proponent George Kerr’s defense, and the pertinent reference to the bill. 1. “Do you want to allow video lottery machines . . . ” Lt. Craig Poulin, head of the Maine State Police unit that oversees gambling, believes the bill “has been crafted to include slot machines,” not just video lottery machines. Slot machines were made illegal in Maine by a 1980 initiative. Kerr’s response: “It specifically says ‘video lottery terminals’ on the front page of the bill.” Of Lt. Poulin, he remarked: “You’ve got to remember, Gov. King is his boss.” But in the bill the definition of “video lottery terminal” reads in part: “any mechanical, electrical, electronic or other device, contrivance or machine that, upon insertion of a coin, token, credit or similar object . . . is available to play or operate . . .” [emphasis added]. If it were mechanical and not electronic, it would be a slot machine. 2. “. . . at certain horse racing tracks . . . ” There is no dispute that only Scarborough Downs would qualify for the right to set up a casino, although in perhaps its weirdest provision the bill charges the chief of the state police with banning as “undesirable conduct” the use of the word “casino” to describe the establishment. The bill says that only a commercial track that has had 100 days of racing in each of the previous two years would qualify. Bangor Raceway, the other regular horse track in the state (as opposed to fair tracks), races less than 30 days a year. But, for good measure, the bill prohibits competition within 150 miles of Scarborough — which excludes Bangor. The No Dice campaign’s Portland lawyer, Terrence Garmey, has suggested, however, that the bill might allow Ricci to set up his gambling machines in other locations besides Scarborough. Kerr responded: “This is an Alice-in-Wonderland contrivance from a win-at-any-price lawyer. A week ago he was complaining it was a monopoly. I don’t know what it will be tomorrow. The secretary of state’s office and the revisor’s office all agree this is strictly for a commercial racetrack.” But Julie Flynn, deputy secretary of state, said flatly that “we don’t do that” — give interpretations of initiative bills. Neither does the Legislature’s revisor’s office, she said. It gives advice on the precise legal language of legislation. The bill states that a racetrack may put machines “at locations for which it is licensed to accept pari-mutuel wagers on horse races.” This doesn’t have to be only at the Downs if Ricci buys an existing, or gets a license for a new, off-track betting facility. There are currently four in the state. Garmey said he had “heard rumors” that John Martin’s Merry Manor restaurant and off-track betting parlor in Waterville is for sale. Peter Martin, proprietor, responded that “at some point, any business is for sale,” but rather than selling his establishment to Ricci he wants to ask the Legislature for permission “to put in a smaller number of machines at the OTBs” (the off-track betting parlors) if this initiative bill passes. 3. “. . . if 40% of the profits are used for property tax relief?” No Dice said this is misleading because no provision in the bill requires that money sent to the towns from the casino’s profits be used for lowering property taxes. Kerr admits this is so, but he argues that even if a town or city buys a new fire truck with the money this means property taxes won’t have to be raised for that purpose. He has a printout, “Dedicated Revenue for Property Tax Relief,” showing that $44 million will be distributed in 2002, ranging from $86 to Glenwood Plantation to $816,000 to Portland. These numbers assume that the casino will rake in well over $100 million in profits a year. In addition to the misleading wording of the question, the bill itself has provisions that are more eloquent by what they don’t say than by what they do. For example, Kerr has been claiming that it would authorize 1500 gaming machines. However, on this subject the bill only says the number of machines cannot be limited to “fewer than 1500.” Garmey, the attorney for No Dice, said that another overlooked provision of the bill is Ricci’s ability to keep all profits of the machine betting for 30 days. If the casino collects $100 million-plus in a year’s time, this means many millions a month. Ricci could earn hundreds of thousands a month just in bank interest on this money — which presumably he wouldn’t have to share with anybody. Even after 30 days, if the state’s 40 percent cut (plus small percentages to the agricultural fairs, the racing commission, and to the state police for oversight of the casino) isn’t turned over, Scarborough Downs would only suffer a 1.5 percent a month penalty fee. Kerr replied that the gambling money would be handled similar to the way stores handle receipts from lottery ticket sales, that the Downs would undoubtedly have to put up a bond, and that any problems could be taken care of in state rules and regulations that would be established if the bill passes. But the biggest loophole, according to the bill’s critics, is in the lack of accountability for all the cash. In a written analysis, Lt. Poulin of the state police said the bill “provides no real way for the State to effectively and efficiently monitor gambling activity” because, unlike in many other states with gambling, the Ricci machines would not be connected to a computer with on-line, real-time monitoring by officials. In many states, he wrote, the government actually owns or leases the machines. “Lacking absolute control over the revenue figures and distribution of terminal revenue, the ability to administer and enforce relies mainly on the integrity of the licensee,” Poulin wrote. “[Police] counterparts from other gaming states remarked that Maine would be the only state in the nation to allow gambling of this scope with such an inadequate regulatory mechanism and so open to corruption.” “The damn thing breeds corruption,” Poulin said in an interview, speaking of gambling. And Ricci “is going to have people running around with a lot of money in their hands,” he added. Kerr maintained that broad powers for the state police to regulate the gambling are in the bill. These include — he quoted from the bill — “re-settable meters housed in a readily accessible locked area that keep a permanent record of all money or credits inserted into the video lottery terminal and of all money or credits paid or awarded.” And, he said in a memo, “if the state police would like the convenience of doing their investigation on-line then they can require by rule that the machines be linked on-line to the state police computer.” However, the force of Kerr’s willingness to cooperate with the state police is weakened when in an interview he referred to them as the “enemies,” saying he would have preferred to have the Scarborough police regulate the casino. In dealing with the criticisms, Kerr sounded frustrated. “The people who are opposing this are grasping at straws,” he said. —LT

It is not easy now to initiate a bill. A turn-of-the-century Progressive Era reform created to allow citizens to pass bills directly when frustrated by lobbyist-dominated legislatures, the initiative in Maine has seen only 42 proposed to voters since the first was voted on in 1911, although the pace has picked up considerably since the 1980s. Signatures equaling 10 percent of the vote for governor in the previous election have to be collected. In practice, this means of 40,000 to 50,000 registered voters. Many signature-gathering efforts fail. If you have people on your payroll collect the signatures, as two sources familiar with Ricci’s signature-gathering effort (and who wished to remain anonymous) said he did, it makes the job easier. Ricci could not be reached for comment on this allegation.

The Ricci campaign spokesman, George Kerr (who said he didn’t know anything about the signature gathering), admitted that the bill is designed to benefit Scarborough Downs and Ricci and that there are provisions greatly restricting competition. But he said the measure is necessary to rescue a stumbling harness-racing industry including the state’s horse farms. Betting on horses in Maine dropped by 20 percent from 1997 to 1999. Kerr said that the 50-year-old Downs has been losing a million dollars or more a year.

And he claimed the bill has broad public benefits through the 40 percent share of gambling profits to be dealt out to municipalities. The headline on the card he passes out to voters promises “Statewide Property Tax Relief.” His campaign organization is the Committee for Property Tax Relief for ME. Their website is www.propertytaxforme.com.

Kerr is an energetic, tough-talking man with slicked-back dark hair. At this season he runs a Halloween hayride business at Scarborough Downs. He is a former Democratic state representative from Old Orchard Beach, where he is part-owner of a restaurant, Surf 6, and manages other family businesses. He is a long-time promoter of gambling in Maine. In several legislative sessions he failed to get bills passed similar to the one up for a vote now.

Ricci also is tough-talking, energetic, and has slicked-back dark hair. He is a well-known Maine figure who has been highly outspoken on every issue he has been involved in. These include a recent, unsuccessful attempt to get a US Postal Service center built on land he owns in Scarborough; runs for governor in 1986 and 1998; a settlement by Key Bank for $10 million in the 1980s after he accused the bank of denying him credit because they confused him with a mafioso; and, recently, public defenses against charges that Kennedy cousin Michael Skakel, accused of the 1975 murder in Connecticut of a 15-year-old girl, confessed the killing to him and others at the Elan School, the boot-camp-like drug-addict rehabilitation center Ricci owns in Poland Springs.

But Ricci is letting George Kerr do the talking for him on this issue. He did not respond to requests for an interview. Only a sad, untypical silence comes from Ricci’s personal corner in this fight. He is very sick with lung cancer — “in and out of the hospital,” said a friend.

The opponents of the question have until recently been quiet. And the little discussion on it has been drowned out by the noisy presidential election and the rest of Maine’s busy issue ballot — six initiative and referendum questions including controversial gay rights, assisted suicide, and forestry reform bills.

Gov. Angus King has been most noticeable in opposition, as he is to most gambling proposals, although Kerr likes to point out that King has overseen the growth of the state lottery. “This is the worst proposal to come along for Maine certainly since I’ve been governor,” he has said. Recently King’s long-time press secretary, Dennis Bailey — yet another tough-talking, energetic type (but he has longish brown hair) — quit to start a Portland public-relations firm. King and his wife, Mary Herman, personally provided $3000 for Bailey to create the opposition campaign committee, No Dice: Mainers Against a Dishonest Deal, as his first client.

Other No Dice supporters include former Maine Times publisher Peter Cox of Georgetown, who has contributed $500; businessman and heavy Republican Party contributor Albert Glickman of Beverley Hills, California, and Cape Elizabeth, who has given $5000; and — listed on the group’s Web site, www.nodice4me.com — former Democratic Gov. Kenneth Curtis and Republican State Sen. Peter Mills of Skowhegan.

As of the September 30 state campaign finance reports, No Dice had raised $9000 and incurred bills of $30,000. Kerr’s group listed receipts and expenditures of $12,000. Their cash and “in-kind” donations came from Ricci’s businesses. These are small numbers for a referendum campaign in the 21st century. Neither side has done TV advertising and won’t say if it will. Bailey admitted his campaign was “off to a late start. It’s difficult to raise money. It’s amazing to me how gambling has become so accepted.”

However, the opponents have a significant ally in the Maine Sunday Telegram, the state’s biggest newspaper, which has been conducting what chief editorial writer John Porter calls a “formalized editorial campaign,” a rare event. Every other Sunday since mid-July the paper has published an editorial against question 3.

Also, religious groups such as the Augusta-based Christian Civic League of Maine that are against gambling morally are opposed to the casino, though they have been quiet because they are spread thin this season. The priority for the league, according to director Michael Heath, is to defeat the gay-rights measure. It is getting the “lion’s share” of their limited resources, he said. The league is also opposing the assisted-suicide bill.

But an even bigger reason morality is not the issue is that the casino’s opponents are shrewdly following the political gospel on how to defeat an initiative: poke holes in the language of the question and the bill (see sidebar). If voters can be made to feel uncertain about a ballot measure, they will reject it.

This strategy has a good chance of succeeding, despite the opponents’ late start. Although a September statewide poll found that 45 percent supported the bill and 40 percent were opposed, “generally, if you’ve got less than 60 percent strong support four weeks before the election you don’t win,” said Dane Waters, president of the Washington-based Initiative and Referendum Institute, a nonpartisan “think tank” on ballot-measure issues.

Just how unusual is this bill? Waters said a statewide citizens’ initiative written to benefit a single private business is “very rare.” In fact, he couldn’t think of any example from the past or among the 74 initiatives up for a decision this Election Day in the 24 states that have initiative provisions in their constitution.

Occasionally there are measures to allow gambling in a state or locality, he said. Most are not initiatives but are referendums — when the legislature sends a bill out to the voters’ approval. (Frequently the word referendum is used to describe the actual vote on an initiative bill.) Arkansas is considering an initiated bill in this election cycle to permit gambling in four counties, with some proceeds to go to education, but it is not designed to benefit a single business.

Referendums on sports-stadium bonding have been common in major cities. In Maine in 1982 a statewide vote was held on whether Bath Iron Works should be given millions in public funds as an enticement to expand to Portland. The bill passed, but it was not an initiated bill; the Legislature had sent it to the voters.

So this proposal may be historic. And it could cause a historic restriction of the initiative process. Annoyed in the 1980s by grassroots initiative bills to shut down the Maine Yankee nuclear power plant and recently to ban or restrict forest clear-cutting — which they have to spend millions of dollars in TV advertising to defeat — corporate interests for years have pushed to get measures through the legislature to make it harder for citizens to gather signatures to put bills on the ballot. These restrictions, for example, would have prohibited signature collection at polling places or required signatures equaling 10 percent of the vote for governor to be collected in every county instead of statewide.

Because the initiative process is a way around the legislators and the lobbyists who influence them, the Legislature is somewhat receptive to these efforts. A bill did pass in 1994 that prohibited the payment of petitioners per signature collected, but a federal court threw it out as unconstitutional in 1999. Generally, though, citizen groups on both the left and right have banded together to successfully beat back these attempts.

But now the anti-initiative forces are gathering strength, and there are cracks in the unusual grassroots coalition. Gov. King recently made headlines when he said that, principally because of the Ricci bill, he would seriously look into restricting the initiative process. John Porter of the Sunday Telegram, also upset about the gambling bill, said in an interview he would “favor some tightening to get a bill on the ballot.” Mary Adams, a conservative activist from Garland and an initiative organizer who has been fighting signature-gathering restrictions for 20 years, is now grumbling about all the ballot measures, although she is more upset about question 2, the third question in four years that would regulate timber harvesting.

Heath of the Christian Civic League, who has been very active in lobbying against signature-gathering restrictions, said point-blank: “I support restrictions on the referendum process. . . . There is a lot of discontent in our constituency” about it. In the Ricci bill instance, he felt strongly that an initiative bill shouldn’t “create a benefit for a single business. Most people in Maine wouldn’t want bills on the ballot motivated by profit.”

He admitted, however, that in making it harder for grass-roots citizens to collect signatures “you’re not really going to get to the problem of the Joe Riccis because they can just pay people to do it.”

Dane Waters, the national expert on initiatives, made the same point. If signature-gathering hurdles are created, “you’ll see the average citizens cannot use the initiative process. Only people who have access to money will be able to use it,” he said.

But the political steam is building to make an initiative harder to organize, and Ricci’s effort has stoked the fires considerably. “It gives the referendum process a bad name,” said Dennis Bailey.

“There are going to be bills in the next session to restrict the process, with the governor taking an interest,” said Sen. Mills. A spokesman for King said the governor had not yet made a decision on legislation related to this subject.

Lance Tapley can be reached at ltapley@ctel.net.