Massachusetts debates impact of gambling

Posted June 22, 2010, at 5:40 a.m.
Attorney General Martha Coakley, center, speaks to lawmakers, from left, State Senators Stanley Rosenberg, Steven Panagiotakos, and Karen Spilka, during a public hearing before the Senate Ways & Means Committee at the Statehouse in Boston, Tuesday, June 8, 2010, where lawmakers discussed a plan to allow three resort-style casinos while keeping a ban on slot machines at the state?s four racetracks. Lawmakers did not back Coakley's recommendation to strengthen laws concerning wiretapping, money laundering, organized crime and wiretapping before it expands gambling. (AP Photo/Josh Reynolds)
AP
Attorney General Martha Coakley, center, speaks to lawmakers, from left, State Senators Stanley Rosenberg, Steven Panagiotakos, and Karen Spilka, during a public hearing before the Senate Ways & Means Committee at the Statehouse in Boston, Tuesday, June 8, 2010, where lawmakers discussed a plan to allow three resort-style casinos while keeping a ban on slot machines at the state?s four racetracks. Lawmakers did not back Coakley's recommendation to strengthen laws concerning wiretapping, money laundering, organized crime and wiretapping before it expands gambling. (AP Photo/Josh Reynolds)
Naomi Carney, Chairperson of the Aquinnah Wampanoag Gaming Corporation, second from right, speaks about the tribe's proposed casino in Fall River, Mass., during  a rally at the Statehouse in Boston, Tuesday, June 8, 2010. Lawmakers were hearing testimony on a Massachusetts Senate proposal to license three casinos, two of which would be competitively bid with the third going to an Indian tribe. (AP Photo/Josh Reynolds)
AP
Naomi Carney, Chairperson of the Aquinnah Wampanoag Gaming Corporation, second from right, speaks about the tribe's proposed casino in Fall River, Mass., during a rally at the Statehouse in Boston, Tuesday, June 8, 2010. Lawmakers were hearing testimony on a Massachusetts Senate proposal to license three casinos, two of which would be competitively bid with the third going to an Indian tribe. (AP Photo/Josh Reynolds)
Mathew Dunham, of Rockland, Mass., holds a sign in support of the proposed casinos during a public hearing at the Statehouse in Boston, Tuesday, June 8, 2010, during a hearing on the plan to allow three resort-style casinos while keeping a ban on slot machines at the state?s four racetracks. Dunham, a member of Local 103 of the IBEW electrical workers union was one of a contingent of close to 200 union members at the hearing in support of expanded gambling. (AP Photo/Josh Reynolds)
AP
Mathew Dunham, of Rockland, Mass., holds a sign in support of the proposed casinos during a public hearing at the Statehouse in Boston, Tuesday, June 8, 2010, during a hearing on the plan to allow three resort-style casinos while keeping a ban on slot machines at the state?s four racetracks. Dunham, a member of Local 103 of the IBEW electrical workers union was one of a contingent of close to 200 union members at the hearing in support of expanded gambling. (AP Photo/Josh Reynolds)

BOSTON — Massachusetts could expect an annual revenue jackpot of up to $460 million by licensing three resort-style casinos in each of three regions of the state, according to a new economic report.

But on Monday, casino critics said the $80,000 taxpayer-funded report released by the Senate focused only on the economic benefit to the state and not the social costs to cities and towns, such as gambling addiction treatment, increased crime, bankruptcy, and foreclosure.

Massachusetts Senate leaders defended their decision not to commission a study of the social costs of casinos, saying there’s no way to do so without knowing the exact location of each gambling venue.

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

Under a 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.

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

Sen. Stanley Rosenberg, D-Amherst, said the locations of the casinos would have to be decided before a social cost analysis could be completed.

“It’s totally situational,” Rosenberg told reporters. “I’ve met with academic experts and they say there is no proven reliable methodology to predict in advance what the community impact is going to be on an economy.”

Rosenberg said that under the Senate bill, casino operators seeking one of the three licenses would have to submit a cost-benefit analysis with their proposal. They would also be required to outline what steps they are taking to ease those effects on the local economy.

He also said that if opponents want a cost-benefit analysis they should pay for one on their own.

United to Stop Slots in Massachusetts said the Senate needs a fuller analysis before rushing ahead. Kathleen Conley Norbut, the group’s president, said Rosenberg’s contention that no social cost study could be done without knowing a casino’s exact location was “absolutely false.”

“It is very possible to come up with a model for a rural, for a suburban or for an urban casino,” Norbut said during a Statehouse press conference following a meeting with Rosenberg.

Norbut said she helped put together a study that focused on the effects a casino would have on western Massachusetts and that casinos in Connecticut could provide a model for such an analysis.

“I think the timeline has been dictating more of the work than what is real and what could possibly be done,” Norbut said, referring to the rush to pass a gambling bill before the end of the legislative session July 31.

Norbut also cited a 2008 report commissioned by the Patrick administration as an example of a report on casinos that considered social costs. However, the report produced by Spectrum Gaming Group of Linwood, N.J., did not quantify those costs and said they “typically take much longer to emerge.”

Norbut said her group would not be conducting a social impact study because the state should be able to compile one.

The Senate’s report doesn’t quantify the social costs associated with casinos, but advises that a small percentage of gambling revenues should be devoted to offset community costs and “potential negative social impacts.”

The Senate’s casino report was compiled by The Innovation Group, which bills itself as the “premier provider of consulting and management services for the gaming, entertainment and hospitality industries.” A spokeswoman for The Innovation Group referred all questions back to senators.

Also Monday, former Attorney General Scott Harshbarger, a casino opponent, sent a letter to Senate President Therese Murray urging the Senate to create an escrow account to pay for the social costs associated with expanded gambling.

In the Senate’s current gambling proposal, 10 percent of gambling revenues the state receives will go into a special fund devoted to offsetting the impact of casinos on local communities. About 35 percent of that money would pay for services such as addiction prevention.

Gov. Deval Patrick, who supports the licensing of resort-style casinos, said Monday he agreed casinos create social problems, but said there are ways to respond to those, like ensuring there is money set aside to treat compulsive gamblers.

“Some of the opponents do raise appropriate concerns about the human impact, and anybody who’s talking about this without talking about the human impact isn’t telling the whole story,” Patrick told reporters. “There is a way to strike that balance and do it responsibly.”

Overall, Patrick said the prospect of thousands of new jobs and hundreds of millions in new revenue tips the scales in favor of casinos.

Attorney General Martha Coakley also weighed in Monday, calling on the senators to back an amendment that would strengthen the ability of law enforcement officials to crack down organized or enterprise crime.

The Senate is to debate the bill this week.

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