Report shrinks casino benefits

Analysis foresees gains well short of Patrick estimates

An in-depth, state-commissioned study released yesterday said Governor Deval Patrick's proposal to license three resort casinos would improve the state's economy and provide thousands of jobs, but not to the degree the governor asserted in the heat of the divisive debate earlier this year.

The $189,000 study, by New Jersey-based Spectrum Gaming, concludes that several of the governor's estimates were inflated, but also estimates that his plan would allow the state to recapture up to $700 million of the $1.1 billion that Massachusetts residents spend at casinos in Connecticut and Rhode Island.

The study comes too late for the original proposal, which is dead, but will add fodder to a debate that is likely to resume in January at the start of a new legislative session. Patrick has not said whether he will file new casino legislation, but many observers expect the casino debate to return in some form as the Mashpee Wampanoag tribe pursues a casino using its rights under federal law.

"This thing never goes away," said Representative Daniel E. Bosley, a North Adams Democrat and leading casino critic. "I've been doing this since 1996, and every spring, the casino lobbyists return and hope springs eternal that this will be the year. We'll see what happens."

The administration hired Spectrum Gaming in February, with hopes that the firm's study would help gain passage of Patrick's proposal to license three resort-style casinos. With a lack of independent statistics, Patrick's numbers came under attack as being excessively optimistic.

The 301-page report - which includes fresh projections on the impact that casinos would have on jobs, revenue, and the state lottery - says the licensing of three resort casinos would not deliver the jobs and revenue touted by the governor.

The administration said there would be 20,000 permanent jobs created from the casinos, while the Spectrum report concludes that each of the three casinos would create 4,377 direct casino jobs, or 13,131 statewide. The jobs would provide an average salary of $35,641 with benefits, which is on par with what administration officials estimated.

The study also estimates that each casino would draw 3,000 construction jobs, or 9,000 jobs statewide, far fewer than Patrick's initial estimate of 30,000. The administration later backed off that figure and started using "thousands" after his numbers came under scrutiny.

All told, the study estimates that casino gambling would produce $1.23 billion to $1.78 billion in annual gross gaming revenues - less than the $2 billion put forward by Patrick.

A reason for the discrepancies, an administration spokeswoman said, is that the study used a more sophisticated financial model to analyze the plan.

"It was important for the sake of the legislators and stakeholders that we moved away from estimates and got a more in-depth and solid projection, and that's what this analysis offers," said Kofi Jones, spokeswoman for the state's office of Housing and Economic Development, which oversaw the casino issue.

The administration put the report out with none of the fanfare that accompanied earlier aspects of the casino debate. There was no press conference to announce the findings. The report was e-mailed to reporters at midday yesterday, and the administration refused to make available any state officials to comment on it.

"I believe that this analysis will prove valuable for future policy deliberations if the issue of expanded gaming in Massachusetts reemerges," Economic Development Secretary Daniel O'Connell said in a statement.

"The analysis provides a comprehensive response to the many thoughtful questions raised by legislators and other interested groups, and reflects the integrity and financial expertise for which Spectrum Gaming is widely regarded."

Patrick proposed a plan last year to license three resort casinos - one each in Western Massachusetts, Southeastern Massachusetts, and metropolitan Boston - which he estimated would create 20,000 jobs and $2 billion in economic activity. But House Speaker Salvatore F. DiMasi was adamantly opposed to the legislation, saying it would introduce a "casino culture" to Massachusetts.

DiMasi said yesterday that he remains skeptical of expanding legalized gambling in Massachusetts, but released a statement saying he would review the study.

"While I remain an opponent of allowing casino gambling in the Commonwealth, I will fully analyze the details of today's report with the Committee on Economic Development and Emerging Technologies and will discuss best next steps with Governor Patrick, Senate President [Therese] Murray, and my colleagues in the House," he said.

Since the plan's defeat in March, the governor has sought to focus on other proposals, and has been largely successful at getting the Legislature to go along with his ideas.

Several aspects from the study could be used to bolster the governor's case, should he decide to resubmit a casino proposal in January.

Spectrum Gaming, for example, concludes that lottery sales would decline in the short term, but "long-term, our view is that the Lottery will not be significantly affected by the introduction of casinos in Massachusetts."

The study downplayed any negative impacts a casino would have on businesses nearby, which was a thrust of the arguments against casinos.

"Any adverse effects casinos may have on other industries could be significantly mitigated if the locations for the casinos are chosen wisely, with an eye for strategic placement, and if applicants for licensure affirmatively address this issue in their competitive bids," the study said.

While the study didn't delve deeply into the social impacts of expanded gambling, it did applaud Patrick's proposal for including a large budget for treating gambling problems.

The study also agreed with Patrick's proposal to give special consideration to an Indian application, a provision that would benefit the Mashpee Wampanoag, who are proposing their own casino in Middleborough.

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