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Casinos likely to emerge as a lobbying force, experts say

Steve Wynn, chief executive of Wynn Resorts.

Jessica Rinaldi/Globe Staff/File

Steve Wynn, chief executive of Wynn Resorts.

By 2018, three resort casinos are slated to open in Massachusetts, lavish developments that will create thousands of jobs and bring in hundreds of millions in new revenue for the state government.

That’s the good news for Beacon Hill, but it comes with a catch. The casinos, each run by industry titans well-practiced at gaining political access, will have the financial might and economic clout to lobby for their interests on any number of fronts, from taxes to employment policy to transportation.

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And in a highly regulated and taxed industry, they will be keenly motivated to press for legislative change, according to specialists who have studied casino lobbying in other states.

“Casinos are a force to be reckoned with in Pennsylvania and they will be in Massachusetts, too,” said Denis P. Rudd, a marketing professor at Robert Morris University, near Pittsburgh. “Casinos always want something and they let you know about it.”

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Taxes are likely to be front and center. The state’s 2011 casino law imposed a 25 percent tax on gross gambling revenue at commercial resort casinos, both from slot machines and table games such as blackjack and roulette.

But the Mashpee Wampanoag were able to leverage their tribal status to secure a lower rate of 17 percent, a decided competitive advantage that rival casinos in Springfield and Everett are likely to contest, specialists predict.

“A 1 percent change in the tax rate can mean tens of millions of dollars to a casino,” said Clyde W. Barrow, a University of Texas professor who closely follows the New England casino industry.

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Steve Wynn, chief executive of Wynn Resorts, which plans to open a $2 billion casino in Everett by late 2018, has criticized the tax discrepancy, telling investors in 2014 it “would be folly” to pay so much more than the Mashpee.

The tribe, which has won exclusive rights to run a resort casino in Southeastern Massachusetts, plans to open a $1 billion development in Taunton next summer. MGM Resorts’ $950 million casino in Springfield is scheduled to open in 2018, while Penn National’s slot parlor in Plainville has been open nearly a year.

Wynn has also made the case in filings with the state that Massachusetts casinos will face an unfair disadvantage against the Connecticut casinos, Foxwoods Resorts and Mohegan Sun. Casinos in both states will pay a 25 percent tax on slot machine revenue, but the Massachusetts casinos must also pay the same rate on revenue from table games, which their Connecticut rivals can keep for themselves.

“That’s important because table games are increasingly popular with younger crowds at casinos,” Barrow said.

In an increasingly crowded landscape, casinos are in fierce competition for market share. But on taxes and other issues of common interest, they are likely to join forces, specialists say. Paul DeBole, assistant professor of political science at Lasell College and a specialist on gambling regulation, said that while the Massachusetts casinos are currently focused on getting their projects up and running, their lobbying campaigns aren’t far behind.

“When they get closer to opening, I think you will see them band together for some preferential tax treatment,” he said. “Once you have a payroll of 10,000 people, your voice gets heard pretty quickly on Beacon Hill.”

With their deep pockets and economic influence, casinos are uniquely positioned to wield political clout, and State House lawmakers are bracing for it. State Representative Peter V. Kocot, a Northampton Democrat, said the proliferation of casinos in the Northeast will probably put pressure on lawmakers to lower the tax rate on Massachusetts casinos, though no such overtures have been made yet.

“Casinos are big international businesses and like other big businesses they are always looking to get an edge,” Kocot said. “You always have companies that want changes in the law.”

Kocot added that Wynn was well aware of the casino tax rate when he applied for a license and that there is no reason for lawmakers to reconsider it now.

Michael Pollock, president of the New Jersey-based consulting firm Spectrum Group, said casinos typically keep close tabs on broader issues, such as state funding for tourism and transportation, that have a direct impact on their bottom line.

“It’s an industry that has a huge stake in the economic well-being of the state,” he said.

The four casino companies in Massachusetts have already retained some of the state’s most sought-after lobbyists, including former governor Bill Weld and one of his former top aides, Steve Tocco, who represent Wynn Resorts, and former congressman Bill Delahunt, who represents the Mashpee. Over the past three years, the casinos spent almost $3 million on lobbying, state records show.

Alan Silver, a gambling specialist at Ohio University, said casinos scouting out new opportunities usually begin by “hiring the best lobbyists and lawyers” in state capitals across the country.

“It’s a routine expense for casinos,” he said.

The casino companies in Massachusetts declined to comment on lobbying efforts. But Robert DeSalvio, president of Wynn Boston Harbor, pointed to the casino’s potential as an economic catalyst.

“As the budget debate continues on Beacon Hill, people from the State House to Main Street are taking note and realizing just how much the jobs, tax revenue, and local spending that Wynn Boston Harbor generates will mean,” he said.

Richard McGowan, a Boston College professor and gambling specialist, said Wynn Resorts, MGM, and the Genting Group, a Malaysian conglomerate that will operate the Mashpee casino, have well-honed expertise dealing with lawmakers and state regulators.

“The casinos know how to lobby on the state and national levels, and they are effective,” he said. Beyond taxes, Massachusetts casinos are likely to push for expansions into sports betting and online gambling, he said.

Casinos had long eyed Massachusetts for its dense population, high personal income, and untapped gambling demand.

But lawmakers, wary of corruption, created a five-member commission to handle the licensing process in hopes of insulating it from political considerations.

The state casino law also banned campaign donations from those seeking licenses, including casino executives, lobbyists, lawyers, and other agents.

In 2011, Common Cause tried to extend the ban on campaign contributions to casino officials who had received a license. But by the time the law was approved, that provision had been stripped.

“What we wanted to prevent was for casinos to come in and kind of take over and change the terms of their deals with the state,” said Pam Wilmot, executive director of Common Cause Massachusetts. “There are some protections for the public in the law that passed, just not as robust as we felt was necessary.”

Sean P. Murphy can be reached at smurphy@globe.com.Follow him on Twitter @spmurphyboston.
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