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State leaders agree on casino bill

Proposal would allow 4 gambling facilities; private talks criticized

By Michael Levenson and Noah Bierman
Globe Staff / August 24, 2011

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Governor Deval Patrick and the leaders of the House and Senate yesterday embraced a proposal that would license three casinos and one slot parlor in Massachusetts, uniting the key political players a year after their attempts to expand gambling collapsed in acrimony.

The bill would authorize three Las Vegas-style casinos in three regions, and a fourth gambling hall with up to 1,250 slot machines that could be located anywhere in Massachusetts - all of which backers say would generate much-needed jobs and income for the state.

It represents the state’s third attempt in as many years to legalize casinos, but the first time that Patrick and legislative leaders have worked together to hammer out a proposal before bringing it to the full House and Senate. That collaboration could increase the bill’s chances of passage by avoiding the kind of showdown that killed the legislation last year.

The casinos would operate 24 hours a day and be smoke-free. They could serve free alcohol, but could not serve any drinks between 2 a.m. and 8 a.m.

Developers would be required to invest at least $500 million per casino and each casino would have to include a hotel. Casino licenses would be auctioned for at least $85 million.

The slot-parlor license would be sold for at least $25 million, and the state would require a $125 million investment for that facility.

The casinos would pay the state 25 percent of their revenues; the slot parlor would pay the state 40 percent of its take, and another 9 percent to a special fund to boost purses for the struggling horse-racing industry.

Casino opponents, outnumbered in the Legislature, criticized lawmakers for writing the bill behind closed doors and for not conducting a fresh cost-benefit analysis.

“Fundamentally, I believe this represents a tax on the poor,’’ said Senator Sonia Chang-Diaz, a Jamaica Plain Democrat. “I don’t deny at all that there are some benefits that would come to the state. The question is, do those benefits outweigh the costs? And I don’t believe they will.’’

Patrick administration officials and legislative leaders defended their decision not to conduct a new analysis, with House Speaker Robert A. DeLeo dismissing the request as a delay tactic.

DeLeo argued that the state could take in “hundreds of millions’’ of dollars and that casinos could create 7,000 jobs and another 3,000 positions from businesses that support the facilities. He acknowledged, however, that those figures are estimates based on a year-old study of a different gambling proposal.

Gregory Bialecki, Patrick’s economic development secretary, said that despite gloomy global and national indicators, the state economy is strong enough to attract major developers who can finance large, profitable casinos.

“The big question was, did the great recession change the economics of expanded gambling in Massachusetts,’’ he said. “The evidence we have is that this is not the case.’’

Beyond the economics of the proposal, this year’s plan is the product of a new political dynamic on Beacon Hill, one that favors gambling proponents who contend the state is losing money and jobs to casinos in Connecticut and other states.

Patrick is now a year removed from a tough reelection fight that prompted him to temper his support for gambling to appeal to liberals who oppose casinos. For months, he and his aides have worked closely and behind closed doors with DeLeo and Senate President Therese Murray to draft the latest proposal.

The private talks effectively sidelined critics, who accused the governor and lawmakers of wiring the bill for passage before it even hits the floor of the House and Senate for debate next month.

“Just the brazen, almost arrogance to the taxpayers that this is how Beacon Hill conducts business,’’ said Kathleen Conley Norbut, an antigambling activist from Monson. “It’s a special-interest-driven political proposal that leadership has crafted, yet the impacts to the people who live in the region and who pay taxes are still not clearly vetted.’’

But legislative leaders defended their approach, saying they want to prevent another bitter public battle.

“We all want to see this done,’’ DeLeo said in an interview in his office yesterday.

He said he, Murray, and Patrick went over the bill one final time on a conference call Thursday, and everyone signed off. “The conversation was that we were all OK to move forward,’’ he said. “It was a real collaborative effort.’’

Each player agreed to concessions, he said.

DeLeo, a Winthrop Democrat, said he dropped his demand that slot licenses be automatically given to the state’s racetracks, two of which are in his district. In exchange, Patrick, who has been cool to slot parlors, agreed to license one, as long as that license was competitively bid.

Hours after Murray and DeLeo unveiled the 155-page bill yesterday, the governor released a statement praising the legislation. “If done right,’’ casinos can “create jobs, generate new revenue, and spur other economic growth in the state,’’ he said.

The bill requires communities to hold a ballot referendum before a casino could locate in a community, and sets aside money to combat compulsive gambling and crime - “all principles I have insisted be a part of any gaming bill I support,’’ Patrick said.

The bill sets up three regions, each with one casino: the Northeast, stretching from Boston to Worcester to the New Hampshire border; the area west of Worcester; and the Southeast part of the state, including New Bedford, Fall River, and Cape Cod.

In the Southeast, where the Mashpee Wampanoag have sought to build a casino, the bill gives preference to an Indian tribe, but forces it to act quickly. The tribe would have one year to secure land, get community approval, and negotiate a compact with the governor. If the tribe cannot strike a deal within that time, the license would be auctioned competitively.

The bill attempts to combat the corruption that has historically cropped up around casinos by setting up a five-member commission to monitor the industry and a new State Police unit to enforce the law. The commission would ensure casino developers have “integrity, honesty, [and] good character’’ and could also ban gamblers with “notorious or unsavory reputations.’’

Michael Levenson can be reached at mlevenson@globe.com. Follow him on Twitter @mlevenson.

Potential uses for
casino revenue

The state would collect 25 percent of casino revenues. Here’s how the state would spend that money:

■ 2 percent to promote arts shows and art centers that may lose customers to casinos.

■ 0.5 percent to promote tourism.

■ 6.5 percent to help communities defray the cost of traffic, police, and other services for casinos.

■ 2 percent to finance local constructions projects.

■ 25 percent to cities and towns to help preserve jobs and services.

■ 10 percent to the state’s Rainy Day Fund.

■ 14 percent for schools.

■ 10 percent for job training classes and other workforce programs.

■ 10 percent to reduce state debt.

■ 15 percent to expand and maintain transportation projects.

■ 5 percent to combat compulsive gambling.