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A risky bet on urban casinos

WHEN THE Patrick administration talks about building three resort-style casinos modeled on Foxwoods and Mohegan Sun in Connecticut, it is referring to the upscale shops, restaurants, hotels, and entertainment venues there. It is not, however, talking about the remote locations of the Connecticut casinos. Theoretically, all three Massachusetts casinos could wind up in urban areas. And that should give the public pause.

Every debate over the costs and benefits of casinos eventually touches on the question of "substitution." To what extent, that is, do casino gamblers simply decrease their spending on other forms of entertainment? A related concern is "cannibalization," or the extent to which subsidized buffets and other come-ons undermine existing local businesses. Patrick, like many other governors, has concluded that substitution isn't a significant problem. If anything, his plan is cleverly aimed at recapturing more than $800 million that Massachusetts residents now spend at Connecticut casinos. And unlike racinos, the racetrack slot-machine parlors that attract "convenience" or local gamblers, the administration says it favors destination casinos that should draw visitors from out of state.

Urban casinos, however, can throw off the equation. Although Boston Mayor Menino favors a resort casino at the Suffolk Downs racetrack on the edge of the city, substitution and cannibalization problems could arise anywhere in Boston. A reputable 1998 report sponsored by the National Gambling Impact Study Commission concluded that, "Overall, the only case where the substitution effect might be negative is that of a casino disrupting an already healthy tourist base." Backers of a Suffolk Downs casino, at least, are acknowledging the issue. This week, they sat down with North End restaurateurs to discuss how the casino might encourage its future customers to dine downtown.

The Patrick administration denies a recent report that it favors a casino in New Bedford, where plans are underway to expand commuter rail service. Though administration officials insist that the casino plan is not merely an urban economic strategy, officials don't rule out any locations in any of the three regions under consideration. This is worrisome. The placement of casinos in or near New Bedford and Springfield, for example, could quickly become haunts for convenience gamblers with little money to spare. Remote locations seem a safer bet.

House Speaker Salvatore DiMasi and other gambling opponents are asking the governor if casinos are good economic policy. The answer is evident from estimates of $2 billion in casino revenue and the 20,000 new jobs. The more challenging question is where, precisely, they should be placed to minimize substitution and social problems. That requires more deliberation from Patrick and Co.

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