Senate proposes new casinos

By Owen Boss

Staff Writer

BOSTON - Massachusetts could expect an annual revenue jackpot of up to $460 million by licensing three resort-style casinos, including one in western Massachusetts, according to an economic report released by the state senate Friday.

The report estimates that the casinos would generate up to $1.8 billion in total annual gambling revenue each year while adding 12,000 full-time jobs to the state's battered economy.

Under the Senate version of the bill also released Friday, the state would receive a quarter of those revenues - between $360 million and $460 million each year - in exchange for allowing the casinos to locate in Massachusetts.

State Sen. Stanley Rosenberg, an Amherst Democrat, expects that differences between the Senate's casino bill will be easily and quickly reconciled with similar legislation passed in the House earlier this year.

"Right now we have differences in detail but not in principle. The major area of question will be the number and type of licenses that are given out," said Rosenberg. The House had considered only two casino licenses for the state.

As for the chances of one of the proposed casinos landing in the western half of the state, Rosenberg said the Senate's version of the bill calls for one western Massachusetts location.

"Under the Senate bill there are three zones, one of which is designated for the four western counties, which means there would be a competition for one license in the zone representing Franklin, Hampshire, Hampden and Berkshire counties," Rosenberg said. "It's just a matter of whether there is enough interest."

If all goes as expected, Rosenberg said the Senate version will likely be up for debate next week and, if it is passed, a conference committee tasked with reconciling the two bills will be appointed the following week.

In a major change from an earlier version of the Senate bill, one of the three casinos would no longer be guaranteed for an American Indian tribe.

Senate leaders had hope to avoid conflicts by setting aside one of the three casinos for one of the state's two federally recognized tribes.

That proposal almost immediately sparked a contest between the two tribes, the Mashpee Wampanoags and the Aquinnah Wampanoags, both of which proposed building a casino in Fall River.

Rosenberg, who helped write the bill, said the legislation would instead put all three of the casinos through a competitive bidding process.

The overall goal of the bill, he said, is to lure back Massachusetts gamblers accustomed to traveling outside the state.

"We want to bring our players home," Rosenberg said. "We want to compete with those tourism dollars."

Under the Senate bill, casino operators hoping to locate in eastern and southeastern Massachusetts would have to commit to spending at least $600 million in capital construction costs. If they are awarded a license, they'd have pay a one-time $75 million fee.

For the proposed western Massachusetts casino, operators bidding on the license would have to pledge at least $400 million in capital construction costs and pay a one time $50 million fee if they are awarded the license.

If there is more than one eligible casino proposal in a single region, the state would hold an auction before awarding a license.

Unlike the House bill, the Senate bill would not allow slot machines at racetracks.

Rosenberg said the Senate wanted to invest in resort casinos that will appeal not just to local gamblers but to tourists from outside the state, who would be drawn in by hotels and entertainment venues included in the casino developments.

The jobs and revenue report was completed by The Innovation Group, which bills itself as the "premier provider of consulting and management services for the gaming, entertainment and hospitality industries."

The report doesn't try to quantify the social costs associated with casinos, but recommends that a small percentage of gaming revenues be set aside to offset community costs and "potential negative social impacts."

Critics have faulted the push for casinos, saying the state has yet to conduct an independent cost and benefit analysis, but instead has only focused on the potential revenue.

A portion of revenue under the Senate bill would be dedicated to help problem gamblers.

Rosenberg said the Senate chose The Innovation Group in part because it doesn't have any direct ties to any of the casino proposals being floated in Massachusetts. He said the Senate didn't ask for social cost estimates because those are tied too closely to other factors, including where a casino is located.

The Senate paid $80,000 for the report.

The Senate is scheduled to debate the bill next week. Gov. Deval Patrick supports casino gambling and said he prefers destination casinos over racetrack slots.

Owen Boss can be reached at oboss@gazettenet.com.