Economy deflates hopes for casinos
Support remains, but Patrick, top lawmakers back off
By Matt Viser
Globe Staff / December 15, 2008
The buzz whipped up just months ago by the prospect of casino gambling in Massachusetts has dissipated, silenced by a sharp decline in the national casino industry that has eroded the promise of thousands of new jobs and fresh riches for state coffers.
Governor Deval Patrick will not even discuss the casino idea now as a means of solving the state's deep budget woes, even though the concept was a cornerstone of his legislative agenda early this year.
Patrick abruptly ended a recent news conference when a reporter raised the topic, and his aides confirm the governor has not seriously considered reviving the proposal.
A core band of backers on Beacon Hill says it will push casinos again when the Legislature begins its new session in January, and it's still possible the idea could regain steam. But so far the group remains an isolated minority, and no legislative leaders are actively pushing for casinos.
It is a remarkable turnaround from a year ago, when the governor's bold plan to license three casinos around the state and generate tens of thousands of jobs dominated Beacon Hill for months. Specialists say the reason for the turnaround is basic: an economic crisis that has spread to the casino industry.
"Proponents for casino gambling can't propose half the things they did before," said the Rev. Richard McGowan, a professor of economics and Jesuit priest at Boston College who studies gambling.
"A year ago people would have thought this was an ideal place," he said. "But given where the economy is going, I doubt having three in Massachusetts makes a lot of sense right now."
The governor could no longer count on the $200 million to $300 million for 10-year state licenses that he had built into his proposal last year, specialists said. Nor could he expect to squeeze as much as 27 percent of the gambling revenue for the state's share.
On the business side of the ledger, there may not be enough of a market for the three casinos scattered about the state that the governor had envisioned. And with credit markets frozen, developers would have difficulty drumming up financing for the $1 billion resorts the governor wanted built.
The two casinos in Connecticut, among the most lucrative in the world, have also seen large drop-offs in revenue. Mohegan Sun reported this month that gross slot revenue fell 12 percent for the quarter that ended Sept. 30, while Foxwoods Resort Casino laid off about 700 casino workers in October.
Stock for Wynn Resorts is down 64 percent from last year, while MGM Mirage is down 88 percent.
Sheldon Adelson, chief executive of Las Vegas Sands and the world's third richest man this time last year, saw his net worth decline $4 billion in September alone, according to Forbes magazine. The Dorchester native, who wanted to build a casino in the Marlborough area, recently announced layoffs of 11,000 workers in Macau, where his company has been building a strip that rivals Las Vegas.
"Casinos, like every other industry in America, have fallen on tough times," said Dennis Murphy, a lobbyist at Ventry Associates who represented casino and real-estate mogul Donald Trump during the casino debate and recently gave an update to Trump officials. "Those that theorize you can get hundreds of millions of dollars and all these concessions from casinos, well there's not going to be as much meat on the bones to give up next year than there was this year."
Even so, casino supporters in the Legislature are girding for a debate that focuses on the state's desperate need for new revenue, and the construction jobs that would come almost immediately.
"When you get into times like this, people usually are more willing to coalesce in areas that would create political controversy," said Senator Steven Panagiotakos, a Lowell Democrat and chairman of the Senate Ways and Means Committee. "People are certainly going to be much more open to issues they might not have been a year or two ago."
Supporters promised a new bill will emerge next month in the House, where Speaker Salvatore F. DiMasi led the defeat of Patrick's plan in March after denouncing the possibility of a "casino culture" growing in Massachusetts.
"It's coming back, whether the governor files it or House members file it," said Representative Brian Wallace, a South Boston Democrat and a chief casino proponent. "One will be filed, certainly."
DiMasi, while suggesting that local aid could decline by as much as 10 percent next year, raised eyebrows last week when he told reporters, "I'm not saying no at all" to casinos. His spokesman later said the speaker hadn't changed his position but was open to a debate on the issue.
Patrick declined to comment on his plan for casinos in a recent interview. Aides have suggested that the governor would not include casino revenue in his budget proposal next month, as he did a year ago as a means of putting pressure on the Legislature to approve it. His spokesman, Kyle Sullivan, said it was "premature to discuss" whether the governor would include it in his proposal.
Economics aside, much could hinge on the future of DiMasi, who has been weakened by several ethics investigations since his victory over casinos in March.
"The speaker has been pretty weakened, and how much he can stem the tide against casino gambling remains to be seen," said McGowan, the Boston College professor.
The two lawmakers jockeying to replace DiMasi if he leaves - House Majority Leader John Rogers and House Ways and Means chairman Robert DeLeo - are much more supportive of casinos. If DiMasi continues as speaker - as he has indicated he will - the governor might be reluctant to revive the bruising debate, especially if it would damage other proposals he wants to push, including reforms in the state's transportation network and education system.
Further complicating the debate will be yet another push for slot machines at the state's four racetracks. Such a move would help the two dog tracks that are now slated to be shuttered in January 2010, after residents voted overwhelmingly last month to ban greyhound racing.
Those two tracks - Raynham-Taunton Greyhound Park and Wonderland Greyhound Park in Revere - employ about 1,000 workers and give millions of dollars in gambling revenue to the state. Advocates for slots renewed their pitch last week, sending out estimates of how much cities and towns would get in local aid if the machines were legalized - from $2.6 million in Salem to $39.9 million in Boston.
The owners of Suffolk Downs, which was the front-runner to build a casino in the Boston area, remain interested in a license and strengthened their position several months ago by forming a partnership with Wonderland.
Another complication is the Mashpee Wampanoag Tribe, which is seeking a casino under its federal rights. The tribe is completing an environmental impact report, and expects to have a ruling from the federal government by the spring, spokesman Scott Ferson said.
Matt Viser can be reached at
maviser@globe.com.