So it begins. The debate about casino gambling in Massachusetts has arrived. And, if recent experiences in Maine and Rhode Island are any indication, it will be a rollicking and, most likely, polarizing one. Before the debate is over, an issue that should be about dollars and sense (taxes, revenue in lieu of taxes, and economic development) will undoubtedly have morphed into an emotional referendum on the evils of gambling. We are not opposed to casino gambling in Massachusetts. It is a public-policy choice like any other, with attendant costs and potential benefits. It is a question of balancing those costs and benefits, of striking the best deal.
Massachusetts already has state-sponsored gambling. It is called the state lottery. Throughout the years, it has become the most profitable and best-run such enterprise in the nation, as well as an important source of aid to cities and towns. Last year, the lottery channeled nearly a billion dollars ($952 million, to be exact) into already sorely strained local budgets. But it looks as if lottery revenues have peaked, or are close to doing so. This year, lottery sales are running two percent behind projections. As a result, officials are expecting to miss their growth target by about $75 million.
The fact of the matter is that Massachusetts does not have enough money to provide the services its citizens expect. Increases in state income and sales taxes are politically infeasible. It is still unclear whether the state legislature will close the tax loopholes enjoyed by corporations, as Governor Deval Patrick has proposed. And even if it does, any relief such a reform would provide would soon be absorbed and discounted. So where is the money for schools, higher education, parks, beaches, and the environment going to come from? How are we going to pay to repair our crumbling roads and bridges? Massachusetts, like most other states, is living more or less from paycheck to paycheck, with a modest sum stashed away in a so-called rainy-day fund and insufficient revenue on the horizon to fund future hopes and dreams, not to mention necessities.
These are the political and fiscal realities that State Treasurer Timothy Cahill had in mind last week when he proposed (with what appears to be a wink from Governor Patrick) that the state aggressively seek a private developer to build one or two luxury casino complexes. Whether this is the right route to take remains to be seen, but Cahill deserves credit for addressing the issue directly, for establishing context and creating an atmosphere in which casino gambling can be debated and analyzed before the passions of the day distort the issue beyond reasonable proportions.
The Mashpee Wampanoags, recently recognized by the federal government as a legitimate Native American tribe, plan to build a gambling operation, most likely on 350 acres of land it purchased in Middleborough. Because of its new tribal status, the Wampanoag land will be, in effect, sovereign territory with a relationship that is not unlike that which Monaco enjoys with its neighbor France. As such, profits from Wampanoag gambling will not be subject to state taxes, but the tribe will be restricted to forms of gaming already sanctioned by state law. By today’s standards, that means Wampanoag-sponsored gambling would be a nickel-and-dime operation compared with Connecticut-Indian casinos Foxwoods and Mohegan Sun.
The reasonable fear is that even without state-approved expansion of permissible games, Wampanoag gambling will drain life from the state lottery without any of the compensatory tourism advantages that high-class casinos bring. The tribe, of course, recognizes its leverage and hopes to strike a deal similar to that in Connecticut, where the state receives 25 percent of all slot-machine revenue. Last year, it received $427 million from the two casinos. A sizable chunk of that money came from Massachusetts residents who spent an estimated $1.1 billion gambling in our neighboring state.
Cahill has suggested that if luxury casino gambling were legalized in Massachusetts, the state could collect as much as a billion dollars annually in taxes and gaming fees. Is that reasonable? We do not know. But 11 other states, including Nevada, New Jersey, Illinois, and Indiana, all have non-tribal gambling. Making a comparison should not be difficult.
When all is said and done, the equation is not complicated: how much money would Massachusetts gain if a private developer went into the casino business with all the fees and sales, meals, lodging, and gambling taxes collected? And how much money would we collect if we were to negotiate with the Wampanoags for an expanded form of gaming in exchange for a cut of tribal action? The federal Bureau of Indian Affairs, which regulates tribal matters, has capped Connecticut’s take at 25 percent. Some private casinos pay their state governments almost 50 percent.
It is clear that Massachusetts is going to have an expanded gambling sector in the future, whether it likes it or not. The question is what’s better for the state: gaming by the Wampanoags alone or gaming by the tribe as well as by a private corporation? The answer will lie in the numbers. We trust that Cahill — and Patrick — recognize that.
Build cape wind now
As Adam Reilly’s story demonstrates, a powerful collection of privileged private interests — inexplicably spearheaded by Senator Ted Kennedy — is trying to scuttle plans to build a farm of windmills in Nantucket Sound, offshore from the Kennedy-family compound. Kennedy and his wealthy neighbors’ interests are clearly blinding them to the need to build this facility as part of a larger national and international effort to reduce our dependency on fossil fuel. The need is now. The cause is great. It is time for Massachusetts to embrace the importance of going green and build Cape Wind.
