One of Maine’s two casinos could soon have a new owner, potentially placing a multimillion-dollar Oxford County business, and the substantial stream of tax revenue it generates for schools, municipalities and other programs, squarely before state gambling regulators.
Churchill Downs Incorporated is exploring the possible sale of Oxford Casino as part of a broader strategic review of nine regional gaming properties across the country.
Churchill Downs CEO William Carstanjen told investors that the Kentucky-based company has completed an internal review of its portfolio and is examining options to sell regional casinos in Maine, Florida, Indiana, Iowa, Maryland, Mississippi, New York and Pennsylvania.
Oxford Casino is explicitly among the properties under consideration.
The company has stressed that no sale is guaranteed and has not announced a buyer.
But Carstanjen made clear that Churchill Downs is reconsidering where it wants to put its money.
The company plans to focus increasingly on what it describes as three core businesses: the Kentucky Derby, historical racing machine properties and its TwinSpires wagering operation. Proceeds from casino sales could be used to reduce debt, invest in Churchill Downs Racetrack and other projects, and repurchase company stock.
That corporate strategy raises a much more local question in Maine:
What happens if Oxford Casino actually changes hands?
The answer is considerably more complicated than selling an ordinary hotel or entertainment business.
Maine law gives the Gambling Control Board broad authority over casino ownership and operations, and anyone operating slot machines and table games must hold a casino operator license issued by the board.
Perhaps more importantly for a potential sale, Maine law specifically states that a gambling license issued under the state’s casino statutes is “not transferable or assignable.”
That means a prospective buyer could not simply purchase Churchill Downs’ existing license along with the building and slot machines and begin operating under the same regulatory approval.
A new ownership structure would have to satisfy Maine’s licensing requirements and undergo scrutiny from gambling regulators.
Those requirements potentially give the Maine Gambling Control Board an unusually important role in determining who could ultimately take control of one of the state’s largest gambling operations.
Oxford Casino opened in 2012 after Maine voters approved the project in a statewide referendum in 2010.
Churchill Downs acquired the casino the following year for approximately $160 million and later invested another $25 million in an expansion that added a hotel and additional amenities. The property now includes hundreds of slot machines along with table games and hotel operations.
But Oxford Casino is more than a private gambling business.
It is also effectively a revenue-generating engine for numerous state and local programs.
Under Maine law, Oxford’s casino operator must distribute 46 percent of net slot-machine income through a statutory formula.
The biggest recipient is Maine’s public education system.
Twenty-five percent of net slot-machine income goes toward kindergarten-through-12th-grade Essential Programs and Services funding.
Additional Oxford Casino slot revenue is directed toward scholarships in the University of Maine System, Maine Maritime Academy and Maine Community College System; the Penobscot Nation and Passamaquoddy Tribe; gambling regulation and addiction services; agricultural fairs; harness racing purses; the Maine Sire Stakes program; dairy programs; the Town of Oxford; and Oxford County.
The Town of Oxford receives two percent of net slot-machine income, while Oxford County receives another one percent to offset costs associated with casino operations.
Table games carry their own revenue-sharing formula.
Oxford Casino must distribute 16 percent of net table-game income, including 10 percent for K-12 education, two percent for the municipality and one percent for the county.
Those distributions are established by statute rather than by Churchill Downs’ corporate policy, meaning a change in ownership would not, by itself, erase the obligations.
As long as Oxford Casino continued operating under Maine law, its operator would remain subject to the state’s revenue-distribution requirements.
That could make the casino particularly attractive to potential buyers, but also ensures Augusta would have significant leverage over any deal.
A sale could also reopen a political argument Maine has repeatedly fought for nearly two decades: How much gambling does the state want?
Maine currently has Oxford Casino and Hollywood Casino Bangor, but lawmakers and voters have repeatedly considered proposals involving additional commercial casinos, tribal gaming and expanded wagering.
State law presently places strict limitations on licensing additional casinos, while Oxford’s authorization itself stems from a voter-approved initiative.
A new owner could therefore inherit not only a profitable casino but a politically valuable position in a tightly controlled Maine gambling market.
That raises questions lawmakers and regulators may eventually have to confront.
Would a purchaser seek an expansion of Oxford’s gaming operations?
Could a new owner push lawmakers for additional casino privileges elsewhere?
Would prospective buyers include major national casino companies already operating in other states?
And could the sale renew pressure from competing gambling interests, including Maine’s federally recognized tribes, seeking a larger piece of the state’s gambling market?
For now, those questions remain hypothetical.
Churchill Downs has not announced a buyer, sale price or timetable, and the company says its review may ultimately result in no transaction at all.
But the possibility that Oxford Casino could be placed on the market makes what began as a corporate portfolio review in Kentucky a potentially significant Maine political and regulatory story.
If Churchill Downs ultimately decides to sell, the most important negotiations may not end when a buyer and seller agree on a price.
In Maine, they may only be beginning.
