WORCESTER — The Massachusetts gambling market is awash with enough disposable income to support three healthy and profitable casino resorts and one slot parlor, economists and casino industry analysts told the state gambling commission at a forum Thursday.
Commission chairman Stephen Crosby said the half-day forum, organized by the commission, should put to rest recent questions about whether the state can support up to four gambling facilities, as authorized in the 2011 state casino law.
“The underlying [economic] assumptions that were the underpinnings of the law still hold,” Crosby said in an interview after the symposium at Quinsigamond Community College. “The market can handle three casinos and a slot parlor.”
Questions about whether the state could support all four facilities have been at the forefront of the public debate in recent weeks, after casino mogul Sheldon Adelson said in May that he would not bid to build a casino in his native state of Massachusetts because plans to license up to three resorts and a slot parlor would dilute the market.
The commission does not have to issue all the licenses it controls and is still a long way from deciding which proposals will be approved, and how many. One of the three resort casinos may be a tribal casino, approved under federal law, in Southeastern Massachusetts.
The forum was the second in a series of educational events planned by the commission in its first few months of operation. Upcoming forums will address problem gambling and measures to help communities mitigate the effects of casino developments.
Several analysts estimated the potential Massachusetts gambling market on Thursday at roughly $1.5 billion to $2 billion annually; that figure is a measure of how much money casino patrons would be expected to lose in one year. The commercial resort casinos will pay 25 percent of their gambling revenue to the state in tax.
If those market estimates prove correct, the Massachusetts market would be similar in size to Missouri’s, a $1.8 billion market that already supports a dozen casinos, said Martin Romitti, director of economic and public policy research at the University of Massachusetts Donahue Institute. Romitti studied the Missouri market extensively for that state’s gambling commission.
Three resort casinos and a slot parlor “could fit comfortably in the Massachusetts market,” Romitti said.
Another speaker, Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth, directly addressed the comments from Adelson that four facilities would dilute the local gambling market, saying that Adelson was analyzing the market strictly for his company’s particular — and very pricey — business model. Adelson is known for building stunningly expensive resorts costing several billion dollars each, or more. Such projects need larger customer bases to justify the expense.
“Obviously if you’re going to build a facility of that nature you’re going to need a monopoly,” Barrow said. He said he is confident Massachusetts can support three destination resorts that meet or surpass the minimum $500 million capital investment required by state law. Some of the proposals may be larger than the minimum; Suffolk Downs in East Boston, for example, has proposed a $1 billion resort at the track.
“There is plenty of unmet demand in this region,” Barrow said in an interview.
Carl Jenkins, managing director of the accounting company CBIZ Tofias, pegs the Bay State gambling market at about $2 billion, but cautioned that his estimate assumes the state will license high-end resorts with lots of amenities, such as hotels, fine dining, and spas, similar to the tribal resorts in Connecticut. Lesser facilities are likely to draw less in revenue, said Jenkins, the coauthor of a 2008 study on the Massachusetts gambling market commissioned by the Greater Boston Chamber of Commerce.
Jenkins also warned that the commission should think carefully about where it licenses the single slot parlor allowed under the law. “If you’re going to put a slot parlor next to a destination casino we’re going to be competing against ourselves,” he said.
Steve Szapor, president of the Innovation Group, a consulting company for the casino, entertainment, and hospitality industries, recommended that the slot parlor be built far from the destination resorts and, if possible, at a location that would enable the facility to intercept gamblers who currently drive out of state to play.