Haverhill lawmaker named point man for casino bill

The Eagle Tribune
By Shawn Regan

House Speaker Robert DeLeo has named Haverhill Democrat Brian Dempsey the point man for developing casino legislation that could be headed for a vote as early as January.

Rep. Dempsey, House chairman of the Legislature's Joint Committee on Economic Development and Emerging Industries, said he will host a hearing on a new gaming bill by the end of the month.

The final proposal is likely to include three resort-style casinos — one in southeastern Massachusetts, one in the western part of the state and a third at a race track in the Boston area, Dempsey said.

It is also possible the House bill will allow slot machines at several race tracks in the Boston area, with Suffolk Downs, Wonderland Greyhound Park, Raynham Park and Plainridge Racecourse in the mix, Dempsey said. Suffolk Downs is also a leading contender for a potential full casino license, he said.

Late last month, DeLeo and Senate President Theresa Murray voiced strong support for legalizing resort-style casinos in Massachusetts — paving the way for a fresh look at expanded gambling as lawmakers seek new revenues and job growth in the poor economy. Lawmakers also have their eyes on gambling money that continues to be exported to casinos in Connecticut and Rhode Island at a rate of about $1.1 billion annually, Dempsey said.

DeLeo's and Murray's new comments on gaming mean the Legislature's leaders are now lined up with Gov. Deval Patrick, who unsuccessfully pushed a bill last year that would have licensed three resort casinos.

Patrick's proposal split the state into three sections, with each to get a casino: Middlesex, Essex and Suffolk counties; Norfolk and Plymouth counties; and Hampden County.

The governor's bill was defeated in large part because of opposition by House Speaker Salvatore DiMasi. DeLeo has since replaced DiMasi, who resigned earlier this year just months before he was indicted on federal corruption charges.

"Given the importance of economic development, as well as the vital need for revenue, I have expanded my thinking," DeLeo said at a recent meeting of the Associated Industries of Massachusetts. "In addition to my backing of slots, I now support resort casinos."

At about the same time, Murray, speaking to the Plymouth Area Chamber of Commerce, said, "The reality is that hundreds of millions of dollars are going to Connecticut casinos from Massachusetts residents every year. We need to explore ways how we can capture that revenue."

Patrick also recently reiterated his support for a resort casino bill that would spur new jobs and amenities such as luxury hotels, fine restaurants, retail shops and golf courses. The governor has been less receptive to allowing slots at race tracks.

Job-creation seen as a key benefit

Dempsey said he has spent the last year getting educated on gaming issues and meeting with proponents and opponents. He said has already had meetings with Attorney General Martha Coakley and Boston Mayor Thomas Menino, a strong supporter of Suffolk Downs' bid for a casino or slots license. Dempsey said his committee will rely heavily on the attorney general's office in crafting strong regulations in the House bill.

"The speaker and I have concluded we ought to get into more formal legal gaming rather than relying solely on the lottery," he said. "In the past, the number one impetus for casinos has been revenue, but now we're looking at it with job-creation as the primary objective."

Job losses in Massachusetts have exceeded 100,000 in the last year, pushing the unemployment rate past 9 percent.

Estimates are that each resort casino in Massachusetts would generate 2,000 to 3,000 temporary construction jobs, 3,000 permanent service jobs and $200 million to $500 million in yearly tax revenue, Dempsey said. He was unable to provide similar estimates for a slot parlor, if one were to be approved in the Boston area.

Critics of expanded gambling worry it would weaken the lucrative state lottery, which generated $47 billion in sales in 2008.

Opponents also argue that gambling takes money away from existing businesses and causes expensive social problems, including personal bankruptcies, broken families and domestic violence.

Supporters say the state is already deeply into gambling through the lottery. They say casinos would generate much-needed cash for slumping state and local budgets and create thousands of jobs to lift the economy.

"You can play Keno every four minutes now, and we have over 40 styles of instant lottery scratch tickets," Dempsey said. "We're already big time into gaming. The question is do we want $1.1 billion going to Connecticut and Rhode Island, or do we want to keep it in Massachusetts?"

Setting the tax rate

Despite a litany of tax hikes over the past two years, state coffers are still hurting. Just as there was last year, there is much consternation at the Statehouse and in local cities and towns about next year's financial picture.

A key point in the new gambling legislation will be setting the tax rate for casino revenue, Dempsey said. Around the country, tax rates range from a low of 7 percent in Nevada and 8 percent in New Jersey to a high of 67 percent in Maryland and 62 percent in Rhode Island.

Connecticut taxes slot revenue at 25 percent, but do not impose a tax on revenue from table games, Dempsey said. Patrick's legislation proposed a tax rate of 27 percent on all casino revenue.

Dempsey said the House is likely to favor a lower tax rate in exchange for capital investment in infrastructure and amenities that would create the most jobs. He suggested the state should look to Nevada and New Jersey in crafting its casino regulations.

"During the last budget, there was pressure to hurry and do expanded gaming for the revenue," he said. "But now we want to go slow and get it right for the long-term. We want these places to be doing well 10 and 20 years down the line."

Dempsey said he expects to hold a hearing on a resort casino bill by the end of the month, and that the Legislature will be ready to debate it when the next session begins in early January. The current legislative session ends Nov. 18.

He said there will be likely by a separate hearing by his committee on allowing slots at race tracks.

"If we allowed slots at tracks in Boston, it could be done fast," Dempsey said, "That would give developers time to develop resort casinos in two other parts of the state."

Developers watching closely

Meanwhile, casino developers have been closely monitoring the gambling debate and have scoured the state for land and partnerships.

Mohegan Sun in Connecticut is developing plans to build a casino in Palmer, a small community near Springfield. Several developers have looked at land in neighboring Warren.

Suffolk Downs in East Boston has been jockeying for the past two years, securing key political backing to ensure that it has the inside track on a Boston-area casino or racino. Wonderland Greyhound Park in Revere has joined with Suffolk Downs to compete for a casino license.

The Mashpee Wampanoag Tribe has tried to use its federal rights to open a casino in Middleborough, but that bid was recently derailed by a U.S. Supreme Court ruling.

There are several other developers who have hired lobbyists and expressed interest in Massachusetts previously, but have not announced specific plans.

Thirty-seven states now have some form of casino gambling.

# # #

Material from the Associated Press was used in this report.