The more people are informed about the impact of legalizing casino gambling– better described as the tax-by-casino plan– the more they will see it’s a bad idea for Massachusetts. Casinos neither lower taxes nor solve a state’s fiscal problems. Casinos would fund state services by draining the wallets of the very people most in need of state support, and they’d fill the pockets of millionaire casino operators, not local businesses.
The evidence from other states with casinos continues to pour in and the conclusion is undeniable– a tax-by-casino plan is not a solution to a state fiscal crisis. Former representative George Rogers and other tax-by-casino supporters often reference Connecticut and New Jersey as two states that have supplemented tax revenues with extensive gambling operations. But upon closer inspection, both states have substantially higher tax burdens than Massachusetts, and today both states are in precisely the same financial bind as Massachusetts. Connecticut has a 6 percent sales tax and higher property taxes than our state, yet Gov. Rowland just laid off 3,000 state workers because the state is broke. Where’s the magic in casino gambling?
Many tax-by-casino supporters regale us with tales of the Foxwoods success story. But make no mistake about it: Any casino built in Massachusetts will not be a Foxwoods-type casino. It will be a “convenience store” casino, a much smaller operation that makes profits out of the pockets of local residents.
Economists have repeatedly stated that the Foxwoods story cannot and will not be repeated anywhere in New England. It is the largest casino in the world. Those who have been to Foxwoods know that the casino lies in the middle of nowhere and is an entirely self-contained destination resort. Besides its rural location, Foxwoods also possesses a highly unique market area, drawing patrons from the densely populated New York metropolitan area as well as the lower New England states.
So no more stories about Foxwoods. Every gambling proposal in the Massachusetts Legislature calls for no fewer than six casinos spread across our poorest urban centers. If gambling is expanded here, convenience-store casinos will be coming to a community near you– and they won’t be selling Slurpees.
The casino fantasies being peddled around the State House and the Commonwealth rest on absurd logic. As Senate chairman of the Human Services and Elderly Affairs Committee, no one understands better than I do how recent budget cuts have affected families in need. But imagine if state government proposed to solve the fiscal crisis by imposing a $2 billion tax increase on the backs of the most financially vulnerable citizens: the working poor and senior citizens. Any governor or legislator associated with such a proposal would be met with screams of protest. Yet, shamefully, study after study reinforces what all of us know already — that most of the new revenues generated by legalized casinos will come directly out of the pockets of the same population, in the form of gambling losses.
Both sides of the casino debate acknowledge that problem gambling contributes to family instability, including violence in the home and bankruptcy. Encouraging more people to gamble so we can help fund programs for distressed families is like encouraging people to smoke so that cigarette taxes can pay for health programs. It’s absurd– and the worst kind of public policy.
George Rogers argues that casinos will not only fill state coffers but create jobs in cities like his, New Bedford. But that’s true only for those who work at casinos. From the absence of clocks to the low-cost meals they provide, a casino is designed to keep customers inside and gambling. To the extent they succeed in keeping their customers captive, casinos put existing businesses out of business. In Atlantic City, one-third of the city’s retail businesses closed within just four years of the casinos’ arrival.
Research has shown that, far from spurring economic development, casinos have a negative impact on their host communities unless at least 50 percent of the gamblers come from out of state. So a Foxwoods may be fine. But without a Foxwoods-style resort, which draws from a wide market, you get all the economic and social costs of casinos with none of the benefits. Therefore, in considering the cost-benefit equation for Massachusetts, ask yourself this: Will tourists travel from Chicago to Holyoke to gamble? Or will they still go to Las Vegas?
To succeed in casino gambling, from the fiscal and economic-development point of view, Massachusetts would need to draw thousands of gambling patrons from New Hampshire and Maine to survive. But if this state legalized casinos, those two states would undoubtedly do the same.
Soon the only people gambling in Massachusetts casinos would be the people who live here– and nearly all the money gambled away would go into the pockets of millionaire casino owners from out of state. We would find ourselves in the same predicament we are currently in with the dog- and horse-racing industry– with the state left subsidizing the gambling industry, rather than the other way around.
After a careful review of the costs and benefits, I believe the majority of Massachusetts citizens will conclude that casino gambling is a gamble our families, our businesses, and our communities can’t afford.
State Sen. Sue Tucker is a Democrat who represents Andover, Dracut, Lawrence, and Tewksbury.
The stakes are higher than we recognize
Let me start by stating that I am not a prohibitionist on the gambling issue. Gambling is a form of entertainment that involves some danger but the vast majority of gamblers can enjoy the activity without any fear of addiction. Ironically, I fear this is not true of state governments!
After spending the first two weeks of December in various parts of the state that are vying for a casino and listening to all of the positive and negative reactions to casino gaming, I find myself opposing any legalization of casino gaming until the political, economic, and social framework that surrounds the issue is fundamentally changed. Let me examine each aspect in turn:
POLITICAL: As former state representative and City Councilor Rogers has pointed out, casino gaming is a perennial political issue. One reason the Massachusetts Legislature has not passed a casino gambling proposal earlier is that the competing interests–racetracks, cities, Native American tribes, private casino operators–that would like to partake in casino gaming have managed to cancel each other out. The result has been political gridlock. But as the state’s budget crisis has grown deeper and the state’s racetrack industry finds itself in even more dire straits, pro-casino interests are striking a compromise worthy of Henry Clay.
Massachusetts racetracks desperately want slot machines to transform themselves into “racinos.” The new majority leader of the state Senate has two racetracks in his district. Hence, these tracks will be the first to receive the most valuable casino game, slot machines. But any form of gambling allowed anywhere in the state automatically becomes available to Native American tribes in their casino proposals, the result of a 1988 federal law that aims to make Native Americans economically self-sufficient.
Then there are the private casino operators. They promise to construct casinos faster and on a grander scale than any Native American enterprise. They have also promised the state more revenue than the state would receive from a Native American gaming operation.
So what would be the overall result of this grand compromise on casino gambling? There would be at least three racetracks with slot machines, one or more private casinos, and one or more Native American casinos–a virtual explosion of casino gaming in Massachusetts. It will take place in cities such as New Bedford, Springfield, and Lawrence that did not share in the Massachusetts miracle of the 1990s. Weston, Wellesley, Winchester, and the other wealthy suburbs of Boston will certainly not be part of this boom but will certainly want their share of revenue from this new source.
ECONOMIC: There is little doubt that opening these casinos would result in jobs both in the casinos and in those industries needed to support casinos. Clearly, there would also be a boom in construction jobs, not only building the casinos but also in infrastructure projects such as widening roads and bridges. However, this boom would likely be short-term.
While none of these casinos will be a failure, neither would they be able to make any long-term, meaningful contribution to the development of these economically depressed areas. The casino gambling dollar will be split up in too many ways for any of these casinos to be able to deliver on their economic promises.
But this is not the only promise that will prove illusionary. Revenue projections to the state will also never approach what casino advocates promise. First, Massachusetts casinos will need to reclaim Massachusetts residents from the Native American casinos already operating in Connecticut. This will not be easy. Foxwoods and Mohegan Sun are high-quality facilities that have a first-mover advantage over any Bay State casino. They will not easily yield the consumers they have so carefully cultivated.
Massachusetts casinos also count on attracting residents from other nearby states. But New York, Rhode Island, Maine, and New Hampshire already have or are planning casino operations of their own. The competition between the states for gambling revenue will be fierce. In-state as well as inter-state competition for the gambling dollar will no doubt greatly reduce any long-term economic benefits casinos could deliver to economically depressed areas.
SOCIAL: As this casino gaming scenario plays out, it would lead to two consequences that are undesirable and unjust. Massachusetts casinos will be located in areas that will not enable them to become national destination casinos. Residents of Weston, Wellesley, Winchester, and the other wealthy suburbs of Boston will make a few visits to these regional casinos, but wealthy Massachusetts residents will continue to use Las Vegas as their primary gambling playground. Hence, the primary patrons of these casinos will be the poor and low-wage earners of these poor cities, hoping to make their way out of poverty by hitting the jackpot. While some of the profits from these casinos will go back to these poor cities, in the form of social services, a good portion of the state take will support projects that primarily benefit the middle class. While the state does need revenue, it does not need to play Robin Hood in reverse, taking from the poor and splitting it between the poor and the rich!
But the cruelest hoax that this explosion of casino gambling will play on these poor communities will be depriving them of any future funding for economic development. One can almost hear it now: These towns were given the golden goose of casino gambling and they did not take advantage of it!
Golden goose, indeed. What actually fueled the Massachusetts miracle of the 1990s was educational institutions that could support growing software and biotech industries. If these economically depressed areas are to end the endless cycle of poverty, educational opportunities are clearly the key. By themselves, casinos are but a distraction, complete with flashing lights. If they are to be of any value at all, casinos should have their revenue targeted to the long-term economic development of these economically depressed areas rather than dumped into the general fund.
While the rise of legalized gaming has many implications for American societal values, perhaps the greatest challenge that the gambling industry poses is: How does society steer a middle course between prohibition and indulgence of a potentially addictive activity, ostensibly for the benefit of state government? Americans need to restore a sense of balance, both on the types of games they use to entertain themselves and on the ethical systems they utilize to justify their decisions. It’s a balance that needs to be established before the state places its bets on casino gaming.
Richard A. McGowan, SJ, is an associate professor in the Carroll School of Management at Boston College and the author of Government and the Transformation of the Gaming Industry.