Detroit Slot City

Yesterday we pointed out a clause in Gov. Deval Patrick‘s casino legislation that shouldn’t have been included. Fair enough, so how about a couple that should have made it in? For inspiration we looked to (gulp hard and swallow) Detroit.

It’s an open question as to whether Patrick still wants a casino in Boston, but if he does, experts agree that the Motor City—home to three casinos—would be the best point of comparison. Here are three ideas Patrick would be smart to swipe:

1. Detroit casino owners, officers and managerial level employees are forbidden from making state or local political donations.

2. Detroit casinos must have workforces composed of at least 51 percent city residents.

3. They also must purchase 30 percent of products and services from Detroit-based businesses, small businesses, women-owned businesses and minority-owned businesses.

Now, we realize that we’re comparing city and state law. Kofi Jones, the spokesman for Secretary of Housing and Development Daniel O’Connell, whose office drafted the legislation, made the point of telling us we were “comparing apples and oranges.” Well sort of. Apples and oranges may have their differences, but in the end, they’re both fruit.

To put it another way: Why wouldn’t you prohibit casino officials from making political donations?

In 2006, the Las Vegas City Council, by conservative estimate received upwards of $80,000 in contributions from casino operators. That same year, Vegas Mayor Oscar Goodman reeled in $42,000 from casinos, including $10,000 from a single operator. Patrick has pledged that he will do everything in his power to avoid corruption if casinos open in Massachusetts. A good place to start would be limiting their ability to influence the political process.

“What we have put in there, as far as conflict of interest, is to ensure that it is the most well-run and well-regulated gaming industry in the country,” Jones said.

Fair enough, but most of those regulations deal with the conduct of Patrick’s proposed gaming control authority. The legislation doesn’t address other local politicians, like the Detroit law.

Michigan gaming law attorney Robert Stocker, who represents casinos, told us the Detroit regulations have ensured that the casinos, “don’t have much of a voice in the legislature,” which seems to us like a good thing. He did acknowledge, “that doesn’t mean people don’t hire lobbyists.” But still, every bit helps.

As for economic influence—the type of influence we do want—Patrick also has something to learn from Detroit. If the point of casinos is to raise state revenue and provide more jobs for Massachusetts residents, he should help guarantee that a good number of those jobs will go to Massachusetts residents. With two of the potential casinos poised to be on our southern and northern borders, it couldn’t hurt to make sure that Bay State residents have a leg up on our friends from the neighboring New England States.

The closest thing we could find to this in Patrick’s legislation is a clause that says, during the bidding process, the gaming commission will consider how well the applicant agrees to work with the Massachusetts workforce development system. Seems like we could do better.

The same logic goes for the providing of goods and services. Patrick’s proposal provides no stipulations requiring casinos to be stocked with Massachusetts products, whereas the Detroit law calls for 30 percent of the products and services (encompassing everything from martini olives to toilet paper) to come from the city.

“I can tell you that this is a significant income generator,” Stocker said. “Everyone just focuses on what happens in the casino, but I think that that’s a very narrow minded approach. The reality is, you’re talking 20 to 30,0000 customers coming through each casino each day. You’re talking a lot of services, and a lot of goods.”

Unless they’re told to contract with local suppliers, big national chains, like Harrah’s and Trump Entertainment Resorts, don’t have any compelling reason to keep their dollars in the commonwealth. Those types of companies, Stocker says, also often have pre-existing supply deals with national companies.

“We believe that the legislation as proposed will maximize economic development and job opportunities throughout the state,” Jones told us. Belief is good, but why not make sure? Detroit did.


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