A Losing Bet
Who would have thought we’d be missing Sal DiMasi?
For several years, the former speaker effectively blocked gaming proposals from getting any traction in the House of Representatives. Now with a sputtering economy, a state government running in deficit, and a governor desperate for reelection, the easy way out button is being pushed again with proposals for legalized gambling back on the table.
The House has already passed a proposal, and the state Senate is now turning its focus on the issue. With big money supporting the cause, the gambling wolf has never strayed far from our legislative door, and it has never looked friendlier to our politicians.
From a business standpoint, we think casino gaming is a bad deal. The arguments for gambling are few: It brings in jobs and it feeds state tax coffers. There is also a long held fear in our state that Connecticut’s two major casinos have been robbing Massachusetts blind, and that we’re not getting our fair share of the regional gambling pie.
But on balance, based on the effect of gaming over time in other states, the proposal’s limited benefits are being oversold, and its liabilities are being swept under the rug or ignored by those supporting the legislation. Gambling is not good business for the state and its existing taxpayers, and going down that seductive but slippery slope will only lead to disappointment in what it yields in tax revenues, and further troubles in the years to come.
High Impact
Massachusetts is already in the gambling business. Currently, the state lottery generates some $950 million in net tax revenues, which have become a critical annual subsidy to cities and towns. However, since the program is run and administered by the state, and the winnings paid out are a much lower percentage than in the casino business, the return to the taxpayer on each lottery dollar is 27 cents.
The return to the state on casino and slot revenues, with Indian tribes and for-profit gaming operators in the mix, plus a higher payout to winners, is projected to be a fraction of the 6 or 7 cents on the dollar that casinos collect in net margin.
Building a high volume casino is exceedingly difficult to do. While Las Vegas and Connecticut have boomed, Atlantic City has struggled mightily, and many states who jumped into the casino business with both feet have found it was not the panacea sold to them in the frothy, well-funded days of the political process.
They have found the cost of mitigating local impacts to be much more onerous than planned, the increase in gambling addiction a real and present problem, the jobs not as plentiful, or not as high paying as advertised, and so on. In addition, the large sucking sound of a casino as it locks its patrons in fantastic play rooms has had a direct negative effect on surrounding entertainment venues from restaurants to theaters. Entertainment dollars are not increasing when casinos arrive; the pie is simply redistributed.
Massachusetts is a state with incredible natural resources, and a world class group of educational institutions and a highly educated and skilled workforce. We need jobs, but we need to be targeting those jobs in industries that have a future, where our young people, and those out of work and looking for opportunities, can grow a career. Advanced manufacturing, life sciences, green industries, high technology and health care are all well-paying growth sectors in our state. If we could intensify our focus and energy on helping these and other promising industries grow and prosper here, and align the skills and training our workforce is receiving to these promising areas, we’ll assure that Massachusetts maintains its leadership position, and its strong economy.
The siren song of casinos is at its most seductive in difficult times. Let’s have the resolve to say no to that industry, and invest in the sectors that have made Massachusetts such an attractive place to live and grow a business.
WBJ Web Partners
Most Recent
Most Recent
0 Comments