Casino study backs Patrick

Chamber supports revenue projections

Paul Guzzi, president of the Greater Boston Chamber of Commerce (right) and chairman Ralph C. Martin III released a report on Governor Deval Patrick's casino plan yesterday. (AP Photo)

Governor Deval Patrick's promise of thousands of new jobs and billions of fresh dollars would come true if three state-licensed resort casinos are opened across Massachusetts, according to a long-awaited Greater Boston Chamber of Commerce study released yesterday that largely bolsters the governor's economic case.

While the chamber has not yet taken a position on the governor's proposal, its largely positive report could help Patrick win key backing of the business community. Patrick has assiduously courted the labor and teachers unions, but the state's business leaders so far have been lukewarm on the proposal.

"People in the business community are essentially agnostic on the issue of gambling, but very gung-ho on legitimate ways to generate revenue for the Commonwealth and also to generate jobs," said Ralph C. Martin II, chairman of the chamber, which will be meeting next month to decide whether to take a position on casinos for the first time. "And if this turns out to be a net positive, people will be receptive to it."

The 129-page report gives Patrick a lift after a rocky week during which his political opponents on Beacon Hill hammered his estimates of 30,000 construction jobs related to casinos as being inflated. The chamber gave more ammunition to those critics - estimating that no more than 11,500 construction jobs would be created - but it closely matched Patrick's other projections of $2 billion in annual gambling activity, $400 million of that in tax revenue for the state, and 20,000 permanent new jobs.

Administration officials were quick to proclaim a victory.

"This study backs up the governor on the vast majority of our projections," Daniel O'Connell, the state's economic development secretary and chief gaming adviser, said through a spokeswoman. "It's the independent analysis that many in the Legislature have been looking for."

Still, critics said there are glaring omissions in the chamber report. It largely ignores questions about the potential negative impacts on local businesses, including restaurants and tourism-dependent hotels. And it assumes that neighboring states will not increase competition, even though Connecticut casinos are already undergoing massive expansions and some believe an entry into the market by Massachusetts will trigger more competition.

The authors also shed little new light on the cultural shifts or social costs associated with gambling, although the report said gambling addictions, crime, and personal bankruptcy rates would almost certainly increase.

Opponents said they saw nothing new in the report.

"We keep getting these recycled studies done with the same information," said Representative Daniel Bosley, a North Adams Democrat and the chief casino critic in the House. "I don't think it's going to sway anybody's mind."

The independent study, which cost the chamber $80,000 and was conducted by UHY Advisors, a national consulting and accounting firm with Boston offices, does not take a position or make any recommendations. The governor has proposed a casino in each of three regions of the state: Greater Boston, Southeastern Massachusetts, and Western Massachusetts. Nonetheless, Carl F. Jenkins, an author of the chamber report, said the analysts decided not to estimate the impacts to regional economies or on local businesses, because it remains unclear where the casinos would be located.

The study estimates that by 2012 three casinos would produce $2 billion to $2.3 billion in annual gross gaming revenues, about one fourth of which would come from out-of-state patrons. After contributing to funds for local communities and gambling addicts, the state would net between $376 million and $429 million in annual revenues. The differences depend on how much state lottery revenues decline as people migrate to casino gaming.

The chamber study also found that 17,000 to 21,000 permanent jobs would be created, with average salaries ranging from $36,000 to $44,000.

"It gives some credibility to the governor's numbers," said Mayor Thomas M. Menino, who has been arguing for a casino at Suffolk Downs in East Boston. "We can't just continue to say no, no, no. Think about the impact this would have on municipal coffers. You can't do these budgets with hocus-pocus resources."

But Joseph Pignato, chairman of the Massachusetts Restaurant Association's board, said the study fails to account for jobs that would be lost at local businesses if their customers start enjoying the free casino perks instead.

"Customers know they're going to eat and drink for nothing," said Pignato, owner of Joseph's Winter Street Cafe in Newburyport. "Casinos give you accommodations if you lose enough money."

Casino Free Mass, a coalition of groups opposed to casinos that includes the League of Women Voters and the Massachusetts Council of Churches, criticized the study for relying on "numbers provided by the gambling industry and its cheerleaders."

The report's authors conceded that about 10 of the 200 studies they examined were written by the casino industry, including one produced by Harrah's.

"All these promises of jobs gained ignore the issue of jobs lost," Casino Free Mass said in a statement. ". . . We cannot improve or build a region's economy based on an industry that depends on our citizens losing billions of dollars every year, which this report says must occur."

The chamber's report was released at a crucial time in the casino debate, with many legislators undecided in advance of hearings that are scheduled to begin March 18.

Patrick and House Speaker Salvatore F. DiMasi, who has strongly criticized the governor's bill, stepped up their rhetoric earlier this week.

DiMasi poured cold water on Patrick's proposal on Monday, citing a Sunday Globe report that said the construction jobs estimates were too optimistic. DiMasi said the governor's arguments "are clearly losing credibility" and had yet to convince him and other legislators.

Patrick responded by sending a letter to all House members criticizing DiMasi for failing to come up with alternatives. The governor continued his direct appeal to legislators Wednesday, sending an 11-page brochure touting the benefits of his bill.

Patrick, in his monthly appearance on WTKK-FM talk radio, said yesterday that he considered the report "generally good news" but also criticized House leaders for prejudging the issue.

"There's got to be a way for the leadership and I to differ on a point of view without the vote being some sign of personal allegiance or disaffection," Patrick said.

Matt Viser can be reached at maviser@globe.com.