As Beacon Hill leaders struggle to grind out compromise legislation legalizing casinos in Massachusetts, a Congressional committee led by U.S. Rep. Barney Frank has approved a bill to legalize internet gambling, throwing a curveball that some lawmakers and analysts worry could cut into projected casino licensing and gaming proceeds.
“It does have some potential impact but we just couldn’t get our arms around it at this point because we didn’t know where the federal government was going, we didn’t’ know what kind of controls they were going to be able to put in place and things like that,” Sen. Stanley Rosenberg (D-Amherst), the Senate’s chief negotiator on gambling issues, told the News Service. “We know that Congressman Frank wants the states to have a lot of control in this, but we also know that he wants to set a national context for state policy.”
The bill cleared Frank’s Financial Services Committee Wednesday on a 41-22 vote, with a handful of Republicans joining Democrats in support.
“This is the scenario that has every economist laughing at us,” said Sen. Susan Tucker (D-Andover) in a phone interview. “The Legislature cannot control what unfolds in the future.”
Tucker said lawmakers looking to approve a handful of gambling facilities could end up with nine: three resort casinos, two slot parlors, two gambling facilities opened by Native American tribes, and two casinos just over the New Hampshire border. With internet gambling layered on top, Tucker said, “That’s called market saturation.”
Fitch Ratings gaming analyst Michael Paladino said internet gambling could “keep people out of casinos” and gambling from their homes, but he argued that the entertainment options at casinos could blunt some of those losses.
“It’s not just, you know, going to gamble and play a game,” he said. “It’s also offering, you know, a night out plus maybe a dinner.”
Facilities that focus solely on gaming without an “entertainment offering” are more likely to suffer with internet gambling, he said. That assessment could spell bad news for racetrack slot machine venues that, if legalized, would need to compete with resort gambling facilities.
Spokesman for DeLeo and Senate President Therese Murray were not immediately available for comment.
“Obviously, having online internet gambling being legal is going to cut into whatever type of profits the state of Massachusetts thinks we’re going to be seeing. The value of the licenses are going to be less, obviously, and it’s going to mean less as far as lottery revenues as well,” said Senate Minority Leader Richard Tisei. “People are going to be left with a terrible hangover at the end of the day because all of the benefits aren’t going to materialize.”
