Tuesday, July 06, 2010

The Die is Cast...

With the Massachusetts Senate passing its own casino gambling bill, the gaming industry's march into Massachusetts is now all but complete.  Although sticking points remain, particularly Speaker DeLeo's treasured slot parlors, it seems unlikely that some compromise cannot be hammered out.  Since no political downside (other than reason) exists for elected officials, especially those retiring from the legislature this year, it is hard to fathom a circumstance where approximately 2-3 resorts will not be built. 

As is common with any conference committee's work, most of the dialogue will take place behind closed doors.  Again the issue will become how important are slot parlors for House Speaker Robert DeLeo, Senate President Therese Murray, and Governor Deval Patrick.  Slot parlors are little more than facilities that offer only one form of gambling: slots, not coincidentally, the industry's most popular, most profitable, and simplest "bet."  For a bet from anywhere from a quarter and up, gamblers are treated to the thrill of an increased risk of seizures brought on by the flashes and color and a chance to hit it big.  Slot parlors deal exclusively in this and are a pet provision of casino gambling for DeLeo.  The speaker envisions increasingly passe facilities like Suffolk Downs adding slot parlors, perhaps, as the Boston Globe infers, to bring back some of the glamor, and, maybe illusion, of the track's brighter past.  The, issue, which the Globe made clear, and this blog emphasized, is personal for DeLeo; his father once worked at the track.

Murray and Patrick are not nearly as sympathetic to the parlors.  Arguing that they bring all of the headaches, but none of the development and construction advantages of casinos found in resort-building, the other two thirds of the state's governing triumvirate favor resorts alone.  As it is two against one, DeLeo may be forced to cave, but if he deftly manages the press and the public on the issue, he could force the issue to impasse and lay the lost "millions" in tax revenue at the oft-unsure Senate President and politically besieged governor.

Still, a breakdown at this point is unlikely.  Lacking the troublesome filibuster that has rendered Washington comatose, and possessing a super-majority anyway, Beacon Hill Democrats (they run the state) would face an even harsher November were this to crash and burn.  Perhaps their election year concerns drove them to accept contributions from the gaming industry as both the speaker and senate president are known to have done so.  With both of Patrick's opponents supporting casinos and a suspicious majority of residents behind the developments, turning back or even complaining about it seems foolish.

But never ones to pass an opportunity to pound sand, WMassP&I feels obligated to temper the outlandish expectations of officials.  We have beaten the death the mythic promise of good jobs finding their way into the casino gaming pits.  Lacking the same economic, demographic, and labor conditions as Vegas from 1989 to the present, the unions that will probably organize the new resorts will lack the leverage to secure benefits on par to the success of the Culinary Workers and others in Las Vegas.  Moreover, mentioning again the Massachusetts Restaurants Associations own fear, the new casinos will drain business away from nearby eateries and if the meals are "comped" sales tax revenue from the state.

The construction jobs themselves may be the truest silver lining, but three major hotel developments (which will like not be the size of Vegas' titans or Foxwoods, the world's largest casino) will not significantly improve the state's financial or employment picture.  Sure, workers who do not have jobs will have them again, but it also puts more power in the hands of contractors and construction unions, which already sway public policy toward ineffective and expensive building.

Finally, the actual projections of state earnings from revenue will undoubtedly come in under expectations after the first couple of years.  Time and time again, casino advocates pointed to the millions Bay Staters "sent" to Connecticut by frequenting its two Indian-owned casinos.  However, that statement disingenuously assumes that Mass residents went there only because they were the closest.  As will happen when competition occurs, many residents may find they like the Connecticut casino's better for whatever reason.  Some may like the drive or the chance to get away, and find themselves not terribly enthused by the proximity of the nearby gaming palace.

Moreover, the talk about "losing" the money to Connecticut ignores the economic fault lines of seeing casinos as avenues for growth.  Real growth requires investment and money coming into the state, not merely retention.  Moreover, it could, as in the case of restaurants pirate money going into existing Massachusetts businesses (see Globe article linked with Suffolk Downs).  It is unlikely that a significant number of people will actually venture into Massachusetts to gamble.  The three northern New England states (which combined have half the population of the Bay State) offer the best hope for out-of-state gamblers.  Undercutting its own efforts even further, as Massachusetts looks to become the first New England state to copycat Connecticut's gambling establishments, others may not be far behind.  Rhode Island gambling interests, already possessing slot parlors, has been itching to expand gambling further.  New Hampshire's libertarian bend and limited revenue sources may find it unable to avoid adopting gambling plans of its own.  With more competition, the existing pool of gamblers (themselves unlikely to increase, save for the addicts) will be spread more thinly across New England minimizing the gains touted in Massachusetts by casino backers.

Finally, the gravest concern is the one that may be the most destructive.  No, it is not the gambling addicts.  Rather it is what will become of the communities that will host these gambling establishments.  Mirroring their House counterparts, many Boston area senators voted against the Senate gambling bill.  Although supported by Boston Mayor Tom Menino and obviously DeLeo, many Hub legislators, who represent the only impoverished constituency that could have mass transit to a casino, rightly feared the impact on poorer neighborhoods.  Menino and DeLeo support recently released plans for a humbler, but still resort style casino at the racetrack.

Closer to home, Palmer, which is a likely candidate for a casino, could undergo a dramatic transformation, particularly in the area just off the Pike.  A sea of parking, forming a moat around some gaudy monstrosity, will take the place of a stretch of land.  Traffic in Palmer, but also in Monson (the hometown of the state's leading anti-gambling group's president, Kathleen Norbut) and Belchertown.  Ancillary development may spring up here and there, but nothing appreciable.  All the action will be in the casino, leaving the town not much different that before save for the traffic tie-ups, increased number of drunks (and drunk drivers), a few hundred jobs and a nice addition to the tax bill.  However, even that will probably do little to change the town's budget significantly.  Don't be surprised if the developers suddenly demand Tax Incremental Financing or even worse a whole tax exemption for a decade or two as leverage for actually building the casino.

Alternatively, life in Palmer and its neighbors may change only a little.  The areas around Foxwoods and Mohegan Sun are little more than forests, the casinos monoliths rising above the trees.  That Turnpike-accessible casino could be seconds from the off-ramp diverting most visitors away from the town and do little to change the town, for better or for worse.  This is often the case when desperate communities have turned to gambling.  Detroit has seen not renaissance tied to the introduction to casino gambling there.   The new facilities have barely registered as blips on that city's overall fiscal picture, even as casinos yielded millions for Motown.  While Atlantic City's casinos face out toward the Boardwalk, their ass-ends front a city that still defines urban blight.  Oddly, this may be a blessing in the smaller places in Massachusetts otherwise destined for transformations of the scale and success of the 1950's and 60's spurt of urban "renewal."

Just as bad, the new revenue, however much it will be, will give the legislature another chance to not learn about fiscal restraint.  Although Massachusetts residents get an okay bang for their buck, too much is spent on wasteful jobs, non-profits whose only goal is to earn grant money, and construction projects that leaving existing infrastructure derelict.  With more money flowing in, especially when the good times roll again, we may only see more of the same.

*DeLeo and Murray photos from, Culinary Workers Logo, Foxwoods, Suffolk Downs, and MGM Grand Detroit photos from wikipedia

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