Massachusetts Has a Gambling Problem

By Jason Schwartz | Boston Magazine |

We’ve done a lot of dumb things in Massachusetts. We financed the Big Dig, hailed Boston City Hall as an architectural gem, and even, for a brief time, claimed Dane Cook as our own. So it follows that when the state legislature convenes this month, one of the top items on the agenda is expected to be legalizing slot machines at the state’s horse and greyhound tracks. This is House Speaker Bob DeLeo’s idea—and it is a very, very dumb one.

For starters, dog racing will cease to exist in Massachusetts on January 1, thanks to a 2008 ballot referendum that outlawed the sport. Furthermore, though DeLeo has argued that slots at the tracks—even dogless ones—will mean quick money, that’s not the case. As Attorney General Martha Coakley told a Senate committee in June, the state will have to overhaul its wiretapping and money laundering laws, and create a regulatory body to accommodate the one-armed bandits’ arrival. All of which could take a year.

There’s another issue, too: “Racinos,” as the facilities are dubbed, aren’t actually good for, you know, the economy. Experts estimate that the most the state could expect to bring in for licensing a racino is $50 million. By contrast, a license for a high-end, Vegas-style resort casino (which Governor Deval Patrick favors) could run up to three or four times that. Moreover, racinos don’t create jobs: Building casino resorts requires lots of construction; installing slots at preexisting facilities requires little. Once open, racinos are good for three jobs per million dollars gambled, says Clyde Barrow, a UMass-Dartmouth professor and gaming expert. Resort casinos are good for 10. At resort facilities you need card dealers, bellhops, chefs—all manner of service employees. At racinos, you don’t even need anyone to make change, since the slots operate on debit cards.

But that’s not the worst of it. According to a new study of West Virginia racinos published by Ball State University, counties that installed slots at racetracks benefited from a one-time employment boost of 1.1 percent. Over the course of 26 years, however, the average salary in those same counties fell by up to almost 3 percent. In other words, racinos create low-paying jobs that depress other salaries in the area.

And yet DeLeo continues to press ahead. His district (big surprise) is home to the Wonderland Greyhound Park and Suffolk Downs horse track, which together employ some 2,650 people. Slots would save many of those jobs, but do little for the rest of the state. This won’t stop House reps from following the speaker, however, since they tend to defy their leadership about as often as members of the North Korean parliament.

It doesn’t help that Massachusetts’ other key power players also want some form of gaming. Senate President Therese Murray went so far as to give a Ka-ching! when describing it as a way to raise much-needed revenue for the state. (If only all legislative issues could be dealt with using cartoon sound effects.) And Beacon Hill insiders say the governor, who has opposed slots at tracks in favor of resort casinos, is now open to compromise on the issue. “The odds of something passing are better than they’ve ever been since we first started debating the issue back in ’95,” says Barrow.

That’s testament to DeLeo’s power (and, three years into the job, Patrick’s political frailty), especially since voters don’t seem to be clamoring for racinos. A recent Boston Globe poll showed that if gambling were to be legalized in Massachusetts, 60 percent of residents would support building resort casinos. A scant 12 percent said they favored slots at dog and horse tracks.

Of course, what’s likely to happen is that we end up with both types of gaming, resort casinos and racinos—a scenario that will diminish the value of the full-casino licenses and, over time, do less for the economy than if the state allowed only resort facilities. By trying to have the best of both worlds, we could very well be stuck with the worst of each.

Source URL: http://www.bostonmagazine.com/2009/08/massachusetts-has-a-gambling-problem/