Should the State Bet on Casinos, Part 2, by Chris Trakas

In my previous, post, I established the case for permitting casinos in the Commonwealth. At this point, the question should be how to expand gaming here in a way that will benefit the state and its workers and taxpayers and while recognizing the unique issues and potential problems. The proposal put forth by the Governor's Gambling Study Group is a step in the right direction in the sense that it starts us down the path toward expanded gambling. It recognizes the reality of the potential for significant revenue and what is going on in neighboring states. It also recognizes the potential problems and attempts to deal with them. I applaud the Study Group for that, but I also recommend altering the approach.

The plan should be altered to benefit Massachusetts workers and organizations. A plan similar to New York's using the racino (racing+casino) approach and at least one Massachusetts based tribal casino would be a better plan and would be more fair to long time Massachusetts workers and residents. The Massachusetts tracks have provided jobs, revenue, and enjoyment to residents for years. They also have been severely hurt by the Connecticut and Rhode Island casinos. They have been the force pushing expanded gaming for the last fifteen years so that they could offer another product along with their core product, which would also greatly benefit the state at the same time. They have kept this issue in the forefront and have advanced many of the arguments that have convinced a majority of the residents that we should take this next step.

As an example of the potential benefits to the state, they have offered to give it a very large percentage of the gaming revenues, much more than the current proposal calls for. The tracks are proposing to give 60% of the gaming profits, before expenses, to the state. They essentially will be paying a 60% tax rate on net income before expenses, by far the highest tax rate in the state. Then they will pay to run the operations out of the remaining 40% with at least a quarter of that going to help support the racing and breeding industries that have been so severely hurt by the Connecticut and Rhode Island casinos. The tracks want an opportunity to help their workers and the state at the same time. Their hope is to get more people visiting their facilities with an expanded product offering and hopefully to see their racing handles increase. The vast majority of the gaming profits will go to the state. The racino approach will quickly infuse revenue to the state because the facilities are already here. Further, it helps preserve industries that employ many thousands of people and while providing entertainment to thousands more. A study of the racinos in New York, Pennsylvania, Maine, West Virginia, and Delaware would show that it is a successful and beneficial way to go.