Ten Reasons I Voted Against the Massachusetts Casino Bill

A “destination” casino at Suffolk Downs? A slots parlor at Wonderland? Both scenarios are possible under a bill just passed in the Massachusetts House that would authorize casinos in each of three regions of the state, plus a slots parlor at any of its race tracks. Residents of a casino community, but not neighboring communities, would get to vote on whether to approve a casino location. Unless, of course, you live in a big city like Boston, where only voters in the Ward that will host the facility get to vote on it.

What would it mean to have one or more expanded gambling facilities in Greater Boston? What local impacts would there be — on traffic, local aid, crime, gambling addiction? And what other goodies are buried in the 3,400 lines of this bill?

1. This bill creates an expensive new bureaucracy.
The casino bill appropriates $20 million to set up the five new regulatory and law enforcement agencies, and the casino industry historically requires intense scrutiny and constant policing. So why, exactly, do we want to invite it into our state?

2. This bill overpromises the revenue it will bring to the state.
The Patrick administration’s “comprehensive analysis” of casino revenue was published in August 2008 by Spectrum Gaming, an industry player. Its prediction of not quite $600 million in “total government revenue” was padded with an unspecified amount of “indirect revenue” and hasn’t been revised to reflect new economic realities. Have you read any firm casino revenue projections lately?

In looking at revenue projections, remember that not all measure the state’s cut: total amount wagered, adjusted gross revenue (AGR), gross new revenue, and net new revenue are all different things. When there’s too much attention on the bottom line, proponents tend to argue that this bill isn’t about revenue — it’s about jobs.

3. This bill will affect our unemployment rate little, at most — and at a cost.
In a 2005 study at Harvard’s Kennedy School of Government, economists found higher population growth nationally in counties with casinos. People move where there is employment, affecting local unemployment very little. Nor are casino states necessarily faring well: Nevada has 12.9 percent unemployment, and the Connecticut and Atlantic City casinos are all laying off workers.

Signaling how desperate we are for jobs can bring its own costs. How many times have Massachusetts taxpayers bailed out or subsidized businesses to create or retain jobs? From Fidelity Investments tot Evergreen Solar, Massachusetts has been far too willing to exchange financial concessions for the promise of keeping jobs — and I’m betting that this industry will be no different.

4. This bill offers special deals, not a level playing field.
This bill is loaded with preferences for particular industry players, and other sweet deals — there’s an expedited process for race tracks seeking the slots parlor license; an expedited process for applicants licensed in other states. There’s priority, in the southeast region, for a federally-recognized Indian tribe to negotiate a casino license directly with the governor.

Whichever new gaming facility can open its doors first — and probably second — will have a competitive advantage. So what are we prioritizing? A slots parlor that represents low capital investment, fewer jobs, less revenue, and a tribal casino that won’t be subject to state law — even the new casino bill, except to the extent it agrees to be.

5. Besides the four commercial licenses it creates, this bill will give federally recognized Indian tribes the right to conduct expanded gaming on tribal lands.
Massachusetts already has two federally recognized tribes, plus other potential claimants. They are subject to federal jurisdiction and enjoy the benefit of the federal Indian Regulatory Gaming Act (IGRA). IGRA allows tribes to operate “Class III Gaming” (table games and slots) in states that permit anyone else to do so.

Indian tribes are legally “sovereign” — separate nations, able to make and enforce their own laws. IGRA directs that Indian gaming be conducted under a negotiated “compact,” so states go after the best deal they can get, in a climate of legal entitlement. And, as Time Magazine showed in its 2002 investigative report, profits from this entitlement flow largely to the tribes’ financial backers, not to Indians themselves.

6. This bill subjects all wagering in Massachusetts to uncontrollable competitive forces.
Legal wagering in Massachusetts — the tracks and the lottery — gets competition from online poker, sports betting, and out-of-state casinos. Massachusetts’ move toward expanded gaming has led to a new casino being built in Oxford, Maine, plus talk of expanding gaming in New York, Maine, New Hampshire, and elsewhere. This market oversaturation is another national pattern, leading to struggling casinos looking to renegotiate better deals with host states.

Unleashing Indian gaming rights also creates new competition within the state as tribal operations disadvantage industry players. Last year, Florida lowered the tax rate on racetrack slots from 50 percent to 35 percent while giving the Seminole tribe exclusive rights to blackjack in three counties. Massachusetts will also be asked to make concessions, as tribal and non-tribal operators compete for profits.

7. Casino operator money will distort and dominate Massachusetts politics.
Casino bill proponents point to the limits it places on campaign contributions by casino operators. There is a case pending now that would, on free speech grounds, overturn limitations on campaign donations by casino licensees. Given the Supreme Court decision in the Citizens United case, this appeal looks like a winner.

8. Casinos will be regulated by a politically appointed Commission, with vast discretion.
Three of the five members of the new Massachusetts Gaming Commission will be appointees of the Governor, the State Treasurer, and the Attorney General. Two of these three appointees will appoint the other two members. Commissioners — who will earn $100,000 each and have a complete staff and budget — will have almost standardless discretion to regulate the industry, even compared to other casino states.

9. Expanded gaming does not create economic development, and can devastate small business.
Many national studies, including the University of Massachusetts-based United State Gambling Study in the 1990s, have concluded that expanded gaming does not revitalize struggling local economies. Worse, it can interfere with real economic development. Local retail shops, bars, restaurants, and entertainment venues are particularly liable to suffer from competition with an industry that offers free drinks, and lower-cost food and shows, to get gambling patrons in the door.

10. The casino bill is the product of a deal among the Governor, House leaders, and Senate leaders, that gives little voice to most communities.
The predetermined nature of the deal can be seen in how few of the more than 150 filed amendments were adopted in the House. Though minimal, virtually all these changes were stripped out by Senate Ways and Means, before reporting out the bill. Direct voting for approval of casinos is limited to host communities — not neighboring affected communities — and only to host wards in our big cities.

How great is the appetite in Massachusetts for more autocratic government?