Casino meeting legal challenges

OXFORD — Voters approved a casino referendum in November, but investment group Black Bear Entertainment (BBE) is being forced to walk a legal tightrope that could threaten the project.

On Friday, Black Bear was asked by the Gambling Control Board to substantiate claims that its proposed Oxford site is the only possible location for a casino.

It's a delicate position.

If BBE makes that argument successfully, it could strengthen claims from casino opponents that the law provides for an illegal monopoly.

The issue came to the fore when Biddeford Downs owner Sharon Terry raised an objection to the BBE project based on the "buffer zone" created by the legislation.

Under the November law, the casino can not be established within 100 miles of an existing casino. The proposed Oxford site on Route 26 and Rabbit Valley Road is about 125 miles driving distance from the Hollywood Slots casino in Bangor, but is only 94 miles "as the crow flies."

Terry's legal team has made the argument that "radial" miles are what matters, which would mean that the Oxford County casino couldn't be sited in the town of Oxford.

In order to combat that argument, BBE has said that an interpretation that allowed for "radial miles" wouldn't just eliminate the casino's current location, but would prevent any casino from being located anywhere in Oxford County.

This is because, under the law, a set of criteria was established, including requirements that the site be within 30 miles of a medical trauma center, 15 miles of a county sheriff office, 25 miles of a state police troop barracks, 30 miles from an interchange of the interstate highway, 10 miles of a fire station, one half-mile of a state highway, and 10 miles of a harness racing track.

"Our mapping company Woodard and Curran has mapped the entire area based on those five criteria. ... [if you accept the radial mile argument] there is no location within Oxford County that would fit that criteria," said Peter Martin of BBE.

Absurdity

BBE representatives say that, since a radial mile interpretation of the law wouldn't allow for any location in Oxford County, a legal argument against "absurdity" comes into play.

"There is one consideration, however, which should be given very material weight," said Commisioner Cushing Samp of the Gambling Control Board. "That is, the general rule of statutory construction should be construed so as to avoid an absurdity."

This means that a strict reading of the law shouldn't create an absurd outcome. So, if thousands of voters approved the idea of a casino in Oxford County, but no such casino is legal, then that reading of the law would be seen as absurd, and would have to be ruled out.

"Clearly, if there were no ... spot within Oxford County which would qualify as a site for a casino, the will of the voters would be thwarted, and the statute would become an absurdity," said Samp.  She noted, however, that the matter "raises questions of fact which the board cannot resolve within the context of this proceeding."

Ed MacColl, a lawyer for Biddeford Downs, says that other casinos can, in fact, be built in Oxford County under the radial-mile measure. He argues that casinos can be built near racetracks in Fryeburg and Farmington, as well as near a relocated Scarborough Downs racetrack.

"On the absurdity issue, the fact that [Terry] definitely could relocate to or near Oxford County and qualify [under the law]  needs to be considered," said MacColl. "There's another racetrack in Oxford County, Fryeburg Fair. There's another racetrack that's within 10 straight line miles, that's Farmington Fair. There might be others, and of course, roads can be improved."

In most or all of those scenarios, roads would have to be upgraded in order to meet the criteria laid out in the law, a scenario which Biddeford Downs claims is a possibility.

"It's clear that other places qualify," said MacColl. "And the amount of effort to make those places qualify may vary."

Gambling Board uncomfortable

During its meeting on Friday, the Gambling Control Board asked BBE to back up claims that no casino would be possible in Oxford County under an interpretation of radial miles.

BBE will make the argument in its application to the board.

Matthew Dyer of the Gambling Control Board said that he supported the idea of road miles, but repeatedly pointed out that it was not a good indicator of how he would vote on a BBE application.

"I'm being forced, by circumstances here, to say how I'm leaning. I'm willing to do that, but that does not mean that when I have an actual application in front of me, that's how I would decide it," said Dyer.

That being said, Dyer said that he favored using road miles, even though he might not be able to vote that way.

"I would be leaning in favor of looking at it as a road mile as determined by the DOT," said Dyer. "... I'm very troubled by the fact that there was a statute in place and that statute was not amended by the citizen's inititative."

Dyer, an attorney, said that a strict reading of the law might cause him to go with radial miles, even if he didn't like the consequences.

"I've been in many a court for over 30 years, and I have often seen a judge holding his or her nose because they were stuck with the statute," said Dyer. "They may not have liked the decision they were making, but the statute is the statute, and that's it. They were honor-bound."

Martin said that BBE was happy with the discussion of Gambling Board members.

 "We're pleased with the results today," said Martin.

He believes that, had the Gambling Board voted on Friday, members would have voted 3-1 or 4-0 in favor of Black Bear.

The next step in the approval process is for the Gambling Control Board to create a document that will serve as an application for the casino, which Martin hoped would be completed by mid-March. 

Filing the application will cost nearly $250,000.

Shifting arguments

The problem for Black Bear is that, if it moves forward based solely on an argument that the only casino possible under the law is the one that it has proposed, it creates another legal hurdle.

Casino opponents have long-threatened a lawsuit against the casino based on the idea that the legislation illegally created a business opportunity for BBE, and no one else. If that's true, then a public law would have been created for a private interest, which is illegal.

In fact, MacColl claims that BBE was prepared to make the same argument that it is now attacking.

"That's why they didn't write a monopoly law [reading] 'Black Bear gets a casino,'" said MacColl. "They wrote a generally applicable law, and they anticipated getting sued on the notion that they had a public law for their own benefit."

In this scenario, said MacColl, "their argument was going to be 'oh no no no no. Fryeburg Fair qualifies. All they need to do is ... improve turnpikes, improve some roads and build a hospital.'"

This, said MacColl, "was going to be Black Bear's argument if the challenge didn't come this way, but from someplace saying 'wait a second, this law only benefits one person.'"

BBE members charge that Biddeford Downs is not motivated by an honest desire to move a racetrack from Scarborough to Otisfield, but by a desire to throw a monkeywrench into the proceedings.

BBE members expressed confidence that the matter would soon be resolved.

Legislative resolution

One possibility, which would allow BBE to neatly sidestep the problem, would be if the law were modified to explicitly identify the mileage as road miles, rather than radial miles.

"We've also introduced a bill to clarify the technicality of this issue," said Martin. "... That will put the issue to bed forever. Even if that doesn't happen, we believe the board will decide in our favor."

The bill, which was introduced by Senator Debra Plowman of Hampden, was referred to the Committee on Veterans and Legal Affairs on February 17. The committee is responsible for all alcohol sales and gaming activities in Maine, including the lottery.

The bill states that in Gambling Control Board Laws, "distances are determined by measuring along the most commonly used roadway, as determined by the Department of Transportation."

The bill's passage would allow BBE to submit an application without having to stake out an argument that it is the sole beneficiary of the public referendum.

Samp said that the application will likely be filed before the legislature has the opportunity to make the clarification.

"This time, the application will be before us, presumably, prior to the chance for the legislature to do any tweaking," said Samp. "I agree absolutely the legislature could change this language and clarify it... I offer no opinion as to what their opinion would be."

Martin says that the challenges won't ultimately stop, or even slow down, the BBE effort, but that it could undermine public confidence in the proposal.

"I dont think it's going to slow us down, but it just creates all these hurdles out there," said Martin. "The public starts to wonder: 'Are we moving forward? What's going on?' We are moving forward. That's all I can tell you. Full steam ahead."

A monopoly

BBE members are in the uncomfortable position of having to demonstrate that their proposal is not a monopoly, while also vigorously defending the business plan that they've staked out, which is based on them establishing the only casino in the county.

Oxford Town Manager Michael Chammings says that Oxford is only big enough for one casino, and that Oxford is the only town in which a casino could be founded.

"This town would have to measure the impact [of a second casino] and we probably could not handle that," said Chammings.

"I made it pretty clear that if you had two applications to the town of Oxford, it was never the intent, and the town would probably impose a moratorium on more than one casino or gambling establishment being in Oxford," said Chammings. 

To Chammings, the voters at large knew that the casino they were voting for was going to be sited in Oxford.

 "I think that was widely known," he said. "Do you think this board of selectmen would tolerate the amount of time I spent in other towns explaining out the impact, positive and negative, if I thought it was going to Otisfield?"

Chammings said that another town was never a serious possibility.

"It was quite evident by all the meetings we had and the fact that Oxford is the only board that was asked and voted to support it, and that the dozens of meetings I personally went to explaining the impact on town county and surrounding towns, that it was always intended to be in Oxford," said Chammings.