Fate of Massachusetts’ Gambling Industry to Be Decided Soon

The first slot parlor in Massachusetts is almost finished, but locals may soon vote to repeal gambling in the state.

A few miles from the Rhode Island state line, construction workers are putting together the pieces of what will become the first gambling venue to offer slots machines in the state of Massachusetts.

Owners of the Plainridge harness racing track have long planned to expand the business by adding about 1,250 electronic gambling machines, and have even prepared to invest $225 million on the project. However, its fate hangs on the upcoming referendum which might do away with all gambling in the state.

On November 4, Bay State voters will decide whether to repeal an American gambling law approved in 2011 and signed by Gov. Deval Patrick, which brought casino games in the state.

Gambling industry “on the edge”

The three companies planning to open gambling venues in Massachusetts are:

• MGM Grand
• Wynn Resorts
• Penn National

For the first time in American history, a state is asking its voters whether they want to take back a right they had legitimately given casino developers a few years ago. If the referendum is successful, this would make Massachusetts the first state to hit the reverse button on the development of casinos in the area.

Meanwhile, six other US states are deciding the exact opposite – whether to embrace gambling or expand the existing market.

For Penn National Gaming, the Pennsylvania-based company working on the Plainville project, the slot machine parlor is a risky investment. An unfavorable vote would end up costing the firm more than $100 million. Then again, they were the ones who decided to go on with the project despite the referendum.

In addition to rendering the new investment worthless, a repeal would also mean the end of horse racing in Massachusetts, as well as the loss of thousands of jobs.

“This has been a long, long fight,” says Jimmy Hardy, a local horse trainer. “We’ve been on the ropes so many times. We’ve been hanging on the edge.”

Two sides of a battle

The state’s casino companies and their unions have established the so-called Committee to Protect Massachusetts Jobs, a sophisticated political operation funded by the industry.

Considering its high-priced investment, Penn National has all the reasons to fight this measure. In fact, the gaming operator has taken a leading role in trying to defeat it, contributing more than $3 million for the cause.

MGM Grand and Wynn Resorts, both of which hold licenses to operate casinos in the state, are trying to convince locals that revoking their support for the gambling industry would also mean the loss of development projects in the state’s most economically-struggling communities, thousands of jobs, as well as much-needed tax revenue which could be put to good use, including funding public services.

Supporters of the casino ban have also gathered under the same flag, initiating the Repeal the Casino Deal campaign. Their arguments include speeches about the casino industry’s “culture of corruption” and the negative impacts it often has on local communities.

Key figures in getting this message through to locals include Christian, Jewish and Islamic leaders, and the influential Roman Catholic Cardinal Sean O’Malley is among them.

A historic vote?

While the referendum to repeal casinos has been touted as a vote of historic significance, Boston College economics professor Richard McGowan, who studies the gambling industry, says the debate is particular to Massachusetts and has little to do with the nation’s casino legislation.

“This vote is some ways class warfare between those parts of the state that view casinos as economic development and those wealthier parts of the state that view casinos as morally corrupt,” he explained.

The casino industry has already pumped millions into the campaign to support current investments, while the other side is buried in debt. The anti-casino group has barely gathered $311,000 in contributions, but the money comes from prominent figures of the community.

As the big day approaches, the latest polls show casino supporters have a significant advantage on their rivals, mostly due to financial reasons. But opponents of gambling in Massachusetts have pointed out that their rival’s percentage has fluctuated dramatically, from as low as 4% to 20%.

Darek Barcikowski, who manages the Repeal the Casino Deal campaign, told reporters: “We’re within striking distance. The polling has sort of been all over the place. We’re within the margin of error one week and then behind by double digits the next week. One week we’re a long shot, the next it’s a dead heat.”

What will the future bring?

With several states struggling to make ends meet and casinos proving to be less profitable than expected, some believe the referendum in Massachusetts will set off a chain reaction in the US. But even if this doesn’t happen, it will be a very important vote, which will decide the fate of Massachusetts’ gambling industry.

Indeed, the gambling industry brings a lot to the table. Companies have promised to create 6,500 temporary construction jobs and an additional 10,000 permanent jobs once the new casinos and American poker rooms open, offering an average compensation of around $45,000 in salary and benefits. On top of this, Penn, MGM and Wynn claim they will generate about $426 million in annual state tax revenue, plus another $55.5 million in local contributions.

On November 4, voters will decide whether it’s worth to bet on casino companies, or force the state to find other sources of revenue.