The American casino industry is looking nervously over its shoulder at Massachusetts, where voters in November will decide whether to repeal the state’s 2011 casino law before the industry ever installs its first slot machine here. If the repeal were to pass, it would mark an unprecedented setback for an industry that has conquered 39 states and counting.
This fall, by chance, one of the casino industry's most prominent faces over the past two decades has landed at Harvard. Frank J. Fahrenkopf Jr., former head of the American Gaming Association, the industry's national trade group, is beginning a fellowship at the Harvard Institute of Politics. Fahrenkopf, who also served as the chair of the Republican National Committee from 1983 to 1989, will be lecturing on bipartisanship—or, rather, the lack of it—in modern politics. Fahrenkopf has a long relationship with the university, having spoken many times at Harvard over the past three decades, usually about national politics.
Ideas spoke to Fahrenkopf by telephone recently for his thoughts on the Massachusetts repeal effort and the state of casinos in the United States. The casino industry has suffered declining gambling revenue in regional markets in recent years, punctuated this month by a spate of bad headlines related to casinos folding in Atlantic City.
IDEAS: Casino supporters tout legalization as good for state revenue, but national numbers suggest that Massachusetts seems to have missed the peak of the casino industry. Is the state coming too late to the game?
FAHRENKOPF: I don't think so. There are so many of your residents who are going to play in Connecticut and Rhode Island. If you were a state with a very low participation, you might be able to make the argument, "Well, maybe we're too late; there's a lot of casino options in New England now that didn't exist when it was only Atlantic City years ago." But since we're talking about a resident base that really enjoys gaming, my view would be it's not too late.
IDEAS: What is the elevator pitch for keeping the casino law?
FAHRENKOPF: If the law goes down to defeat, Massachusetts residents are just going to continue going to Connecticut and Rhode Island. If the state allows the casinos to go forward, you’re keeping folks at home. You’re keeping the tax revenue and the jobs—quality jobs with benefits. Historically we have a great record of employing those people who are the hardest to employ: the long-term unemployed, which we have a lot of in this country right now. We train them.
IDEAS: If the jobs and revenue are so positive, why are casinos still so controversial?
FAHRENKOPF: Normally those who are opposed to gaming are overwhelmingly opposed on moral grounds. You have to respect them. We can disagree. They come up with the argument that it’s going to hurt because people will become addicted and ruin their lives and so forth. I think the industry has handled that well. It established the National Center for Responsible Gaming [an industry-funded addiction research center]. Remember, we’re not talking about suddenly getting Massachusetts residents to do something they’re not already doing. But it’s good to have that discussion. It will highlight that 1 percent who meet the definition for being compulsive gamblers. And I think it’s important to shine the light on that. And let the people decide. I don’t have any problem with it.
IDEAS: Is there a precedent in any other state for the Massachusetts repeal vote?
FAHRENKOPF: I don’t recall during my time, which was a long time—18 years at the AGA [until 2013]. There hasn’t been an approval of gaming, plans made, licenses granted, and construction beginning and so forth, and then suddenly everything put on hold because of a vote. But that’s our process. It’s a good process, a healthy process. It presents to the people of Massachusetts the good and the bad, and [they] have to balance them and determine what’s in their best interest. We’re an interesting industry—I say we, I’m not involved in it anymore—but we can’t just walk in and open our business somewhere. We have to be invited, because it’s a privilege to hold a gambling license; it’s not a right.
IDEAS: Casino foes in Massachusetts can't stop talking about how four of 12 Atlantic City casinos have closed this year. What happened to Atlantic City?
FAHRENKOPF: The first casinos opened there in 1978. What happened was the Legislature didn't earmark that the money would stay in Atlantic City. It went into the general fund in New Jersey. There was some money left to help senior citizens, but there was no money to rebuild and reinvigorate Atlantic City. And for years it was kind of run down. Then just at the time there were so many new projects on the drawing board—boom—everything came to a halt with the credit crunch [and recession]. And it never was able to come back. The killer for them was they depended so much on the Philadelphia market, and now people who live in Philly don't have to drive an hour to gamble and see a show, because they got it in their own state.
IDEAS: What is your relationship with Harvard?
FAHRENKOPF: I have been visiting Harvard for, goodness gracious, the last 30 years. There is no question when I was coming up as Republican national chairman that the audience wasn’t clapping as hard for me as perhaps my Democrat opponent, but that’s part of the game and I understand that. [Laughs] And I think it’s just healthy to have a free and open exchange of different political views and ideas. That’s what’s missing in today’s politics. I have some theories as to why and I’m going to have some people up to talk to my lecture groups in my semester there. Not that I’m hopeful we’re going to solve the problems of Washington or the world in that time, but I’m hoping there will come some ideas that may give birth to some serious considerations.