The Patrick administration issued its strongest, most market-based warning yet against legislation sanctioning slot machines at the state’s four racetracks Tuesday, arguing it would curtail the state’s purse from resort casinos, while Senate lawmakers eager to preserve jobs at the long-running facilities questioned why Beacon Hill would sacrifice existing businesses.
Gregory Bialecki, the top economic development aide to Gov. Deval Patrick, followed the governor in stopping short of laying down a veto threat, but said the House-approved legislation sanctioning two casinos and 750 slots at each of the state’s four race tracks would prohibit the desired “assurance” to casino investors about the state’s gambling market viability.
“It’s appropriate that they have some assurance that they’re not going to be undercut, I think, by other facilities,” Bialecki said, referring to casino investors. Patrick has previously said he has been unconvinced by the economic benefits of “racinos.”
After testifying to lawmakers that Massachusetts still offered “a strong and attractive market for destination resort casinos,” two years after Patrick’s three-casino plan died in the House, Bialecki said it was “too early to talk about a veto” of racinos.
At a packed capitol auditorium hearing on the Senate’s draft gambling bill, Bialecki also downplayed the viability of the Aquinnah Wampanoag tribe’s proposal to site a facility in Fall River, a plan that conflicts with the Mashpee Wampanoag tribe’s hopes of situating one in the same city.
“I think without getting into all the legal details, it’s been our view, and it’s the view of others as well, that the Mashpee Wampanoags are the one group that have a serious potential ability to establish their tribal gaming rights in Massachusetts,” Bialecki said.
Asked whether the administration believed the Aquinnah could open a casino after the three casinos licensed under the Senate plan, Bialecki said, “That is not a significant concern. We don’t feel that way, and of equal importance, we don’t see that any of the potential proponents and participants in the market are worried about that either. So, in other words. We don’t have any reason to think that people would undervalue, lower their bid or so forth, under a concern that there is going to be yet another facility.”
The Aquinnah won federal recognition in 1987, and signed a settlement act with the state agreeing that their settlement lands and other lands acquired thereafter would be subject to state laws and jurisdiction. The Supreme Judicial Court ruled in 2005 that the tribe waived its sovereign rights to municipal zoning laws under the agreement. In a 1997 argument, then-Attorney General Scott Harshbarger’s office argued in a letter to then-Acting Gov. Paul Cellucci’s chief legal counsel that “high stakes bingo, like other forms of gambling, cannot be legalized without the approval of the Massachusetts legislature.”
At a State House press conference Tuesday, Aquinnah tribe officials said they would construct a facility on their 450 acres of Martha’s Vineyard reservation land if the tribe did not receive a state gambling license under the proposed law. The tribe said it has a preference for a casino on 230 acres in Fall River.
Fall River Mayor Will Flanagan said the Mashpee Wampanoag proposal to build a casino in Fall River was “light years ahead.” Flanagan said he thought the Mashpee plan could coexist with a current plan to build a bioprocessing facility on the site targeted by the Mashpees.
Four tracks are seeking expanded gambling authority, albeit under different circumstances. Suffolk Downs and Wonderland Park have entered into a joint venture and are hoping to develop a casino in East Boston. Working independently, Raynham Park and Plainridge Racecourse are angling for slot machines.
The Senate last week released a bill, due for floor debate later this month, calling for three resort casinos segregated by region - eastern, southeastern and western Massachusetts. Unlike the House bill, the draft Senate bill does not authorize slot machines at the state's two horse tracks and two former dog tracks. The Senate draft calls for two casino licenses to be bid competitively with the third designated for a qualified Native American tribe.Senators are also eying four general categories for investment of state government revenues from expanded gambling. Areas identified as "spending priorities" by the summary include gaming industry regulation and law enforcement, community mitigation and addiction services, offsetting lost Lottery revenues for cities and towns and making contributions to the state's rainy day fund.
Attorney General Martha Coakley told lawmakers Tuesday she approved of the regulatory structures in both the House and Senate bills. She said more stringent language against money laundering and enterprise crimes should be included, saying the Senate bill had narrowed the language “in a way that will hinder law enforcement’s ability to protect the public.” She said that the bill should expand provisions around enterprise crime by excising the requirement that criminal enterprise activity be tied to gaming.
Sens. Marc Pacheco and Richard Ross, who both represent racetracks, told Bialecki they thought the administration should factor in the jobs at stake at preexisting facilities.
“There’s a true opportunity for us to bring increased revenue over and above what we’re talking about today,” said Pacheco (D-Taunton). “We have a problem with jobs and revenue with the adoption of this proposal, we lose 600 to 800 jobs almost immediately.”
Bialecki said he wanted to emphasize to lawmakers that “even though it’s tempting, Sen. Pacheco argued this, even though it’s tempting to talk about even more gaming than that outside of casinos, that we’re creating a serious risk that we’re reducing the overall opportunity because we, at that point, would be discouraging casino bidders and discouraging the kind of very large-scale investment we’re talking about.”
“We’re talking about how to create an environment where people are confident about investing $500 million or $1 billion here in Massachusetts,” Bialecki said. “That’s what we’re trying to get to, and it’s appropriate that they have some assurance that they’re not going to be undercut, I think, by other facilities.”
Bialecki raised the notion of devoting some proceeds from expanded gambling to the current live racing facilities.
Gambling opponents argue that permitting the new industry to come to Massachusetts would be tantamount to introducing a new class of crime. In a question that drew twitters from the packed crowd, Sen. Susan Tucker, who is opposed to expanded gambling, asked Coakley whether any of the other industries the state had sought to entice had required their own set of criminal statutes.
Testifying before the budget committee, expanded gambling opponent Sen. Patricia Jehlen said, “I do prefer this bill to the one passed by the House, I think it’s a very thoughtful bill, but I think it brings more risk than rewards.”
Sen. James Eldridge called expanded gambling “a very bad and very short-signed economic development strategy.”
“I really think in Massachusetts we can do a lot better,” Eldridge said, pointing to prospective losses among small businesses.
Organized labor exerted a show of force at the hearing, scores of gambling proponents appearing in favor of new venues. At one point, state AFL-CIO president Robert Haynes shot down a legislative aide signaling his time was finished, saying, “I’m going to talk until I’m done.”
Pressing for immediate state action on construction job creation, Haynes said he had told Patrick, “Go find himself a shovel. Go find himself a shovel and try to dig some holes here … Go get a shovel and start digging. Go on a war footing. You guys run this government.”
The hearing was one of several such sessions in recent years, as gambling proponents have repeatedly sought to paint the state’s revenue crash as the ideal time to introduce a new industry, while critics have called downturns the worst possible time to prey on vulnerable problem gamblers and their families.
“It’s been debated, literally, for decades,” said Senate President Pro Tempore Stanley Rosenberg, charged by Senate President Therese Murray with developing the chamber’s gambling policy.
Senate budget chief Steven Panagiotakos said the Senate was working to develop its own jobs and revenue estimates for its casino-sanctioning bill, saying it expected a study back next week.
