Patrick vows speed as casino era begins
Says he’ll soon name panel leader; foes consider ballot initiative
Massachusetts joined a growing number of states turning to gambling for jobs and revenue yesterday, embracing Las Vegas-style casinos and concluding an emotional four-year legislative battle over the state’s moral and economic future.
At a State House ceremony, Governor Deval Patrick officially ushered in the casino era, signing a law authorizing a slots parlor and three full-scale gambling establishments in designated regions across the state.
Vowing to move swiftly toward making casinos a reality, he said he would shortly appoint the chairman of a new and powerful gambling commission that will make nearly every key decision about the state’s newest industry, including where gambling establishments will go and how they will be regulated. “Now, the work will turn to getting it right in the implementation,’’ Patrick said.
Depending on how long the commission takes to set up regulations and choose developers, the first slots parlor could be up and running in a year, while the first of three casinos could open in five years.
Patrick’s signature ends a fight that reaches back generations, as political leaders had steadfastly resisted increasingly strong overtures from the gambling industry. It also represents a profound cultural shift in a state founded on strict religious principles that have persisted in some laws and public attitudes.
Since Patrick embraced casinos four years ago, the gambling debate has consumed Beacon Hill, generating millions of dollars in lobbying expenditures, thousands of dollars in campaign contributions, and untold hours of closed-door negotiations.
Patrick and fellow Democrats in the Legislature are hoping that gambling, while not as strong an industry as it was a decade ago, can reclaim enough business from neighboring states that already have casinos to employ thousands of people and enough revenue to fortify a smorgasbord of state services. “Expanded gaming for me in Massachusetts is about creating jobs, good jobs at good wages for people all across the Commonwealth,’’ Patrick said yesterday. “It’s not the solution to every economic challenge we face and it won’t be the cause of every social ill.’’
Opponents argue that gambling’s benefits will be erased by the costs of regulation, police, and social services needed to combat addiction, crime, and corruption. They also argue that the state’s reputation as a center of history and education will be forever altered.
“It’s a failure of our state government to find better ways to generate good jobs and to stimulate our economy,’’ said John Ribeiro, president of Neighbors of Suffolk Downs. “Our economy is doing a lot better here in Massachusetts than other states that do have casinos. This is where Massachusetts is headed now, down the same path.’’
Even as Patrick and lawmakers seek to move past those debates, there are potential hurdles that could slow progress on opening casinos.
Hours after Patrick signed the casino bill, the new law drew a federal court challenge. KG Urban Enterprises, a developer hoping to open a casino in New Bedford, argued that a provision in the law giving the Mashpee Wampanoag an inside track on a casino in the Southeastern region is unconstitutional.
On another front, casino opponents say they are likely to begin a drive to repeal the law by statewide ballot initiative, which could give some developers and financiers pause as they consider committing about $600 million in start-up costs. Local opponents have begun efforts, as well, preparing for a requirement under the law that gives residents the right to vote for or against a casino in their community.
But for now, organized labor and others who see the potential for jobs are celebrating. Supporters in towns such as Palmer and New Bedford, where developers have floated proposals, have begun mobilizing to make the case that theirs is the best location to attract overnight visitors.
Lawmakers say they expect to collect at least $280 million in one-time licensing fees and about $300 million a year in taxes from casinos. The money has been carved up in the law to meet a variety of state needs and desires, which has helped broaden the political coalition favoring casinos.
Efforts to remake the state health care system, for example, will get about $50 million to $60 million from the licensing fees. Community colleges could get $44 million. A “manufacturing fund,’’ with no defined purpose, could get $34 million.
The legislation also devotes millions of dollars a year to prop up the flailing horse racing industry, and millions more to aiding local taxpayers, treating newly created gambling addicts, and paying down the state’s debt.
Even the state’s museums and theaters, who expect casinos to take a bite out of business, will get up to $6 million a year in restitution.
But that money is not assured. It will depend in part on whether developers can get the financing to spend at least $500 million on building so-called destination casinos, complete with hotels, that the law requires.
It will also depend on the state recapturing an estimated $1 billion a year that Massachusetts residents spend in border states. Industry analysts say the proliferation of casinos around the country and the bad economy have changed the casino market in recent years. Now, they can no longer expect to profit from new gamblers; they must compete for people who already gamble elsewhere.
“There’s no guarantees here,’’ said Keith Foley, a senior vice president at Moody’s Investors Services who oversees analysis of the casino industry. “The real key here is whether it does for the state what the state wants it to do.’’
Neighboring states, especially Connecticut, are also expected to respond by reconsidering their casino regulations to ensure they can compete with the new threat. “What do you think the odds are that they’re going to sit back and let Massachusetts take all their money?’’ Foley said.
Lawmakers have also given tremendous power to a newly created state gambling commission that will have virtually unchecked authority in selecting developers and deciding regulations, including how much slots are required to pay winners.
The chairman of the five-member board, whom Patrick will appoint, will earn more than the governor, $150,000 a year, and be expected to serve full time.
The other four members - appointed by Patrick, Attorney General Martha Coakley, and Treasurer Steven Grossman - will earn $112,500.
Lawmakers, acknowledging the potential for corruption that has bedeviled other states, have emphasized the board’s independence from lawmakers.
In an interview, Patrick made a point that he would have no say over where the casinos will be located, which should provide some political cover to lawmakers in case those decisions are unpopular.