If we must build a slot parlor . . .
Massachusetts doesn’t need a slot parlor. The Legislature never should have included one in the 2011 gambling law. Compared to full-fledged resort casinos with table games, hotels, and shopping, a slot parlor will generate far fewer employment opportunities while attracting more Massachusetts residents to one of the most destructive forms of gambling: an evening spent staring at a one-armed bandit.
But the 2011 law included a slot parlor anyway, despite the initial objections of Governor Patrick. It was the product of intense insider deal-making. Some of the loudest political support for legalized gambling in Massachusetts came from horse tracks, which saw adding slots as a way to save their dying businesses. While supporters often portrayed the gambling law as a way to raise more revenue for public needs without raising taxes, the law that emerged from Beacon Hill actually funneled a full 9 percent of slot parlor revenues to the horse racing industry. That decision undercut one of the strongest arguments for legalized casino gambling. Rather than encourage gambling, some supporters argued, Massachusetts was merely providing venues for in-state gamblers who otherwise would journey to Foxwoods or Mohegan Sun in Connecticut, or Twin River in Rhode Island. But if so, why toss away 9 percent of the proceeds to prop up another form of gambling that cannot sustain itself otherwise?
Given the social ills associated with slot parlors, combined with the very real possibility that a slot parlor could compete with a nearby resort casino, thereby tempting both venues to come back to Beacon Hill for more favors, the Massachusetts Gaming Commission could choose to just walk away. Under the law, the five-member panel isn’t technically required to award the slot license to anyone. But the commissioners have interpreted their role to follow the intention of the Legislature as closely as possible. They also say that independent research suggests there are enough gamblers and potential gamblers in Massachusetts to justify a slot parlor and three resort casinos — the maximum under the law. It’s a questionable conclusion, but barring a change of heart, by mid-March the commission is expected to pick among three slot-parlor proposals in Leominster, Raynham, and Plainville.
Each of them envisions 1,250 slot machines at a facility near Interstate 495, and each appears to be viable — that is, sufficiently well-funded and prepared to open its doors in less than a year. The commission’s decision will ultimately come down to how it weighs a long list of secondary considerations. Do the commissioners favor local ownership over out-of-state corporations? How much should proximity to other casinos matter? How greatly should the intensity of local support factor into the decision? What kind of givebacks to the communities are most fruitful?
While there are appealing aspects to all three proposals, the location and promised community benefits make the Leominster plan the best option among the three. Rather than an expansion of horse racing and contributions to local coffers — the primary givebacks at Raynham and Plainville — the Leominster slot parlor would hand over between $1 million and $1.5 million a year to a UMass program to incubate medical-device firms, a potential boon for the crescent of economically deprived gateway cities from Worcester to Lowell. In other words, the Leominster slot parlor would offer more than just slot manager, bartender, and waitress jobs, but the prospect of new jobs in a fast-growing industry. The commissioners should choose it.
A half-empty plastics factory on the edge of town; a tattered old dog track adrift in a sea of empty parking spaces; a shabby harness-racing clubhouse — the three proposed slot parlor sites each attest, in their own way, to the sense of deprivation that led Leominster, Raynham, and Plainville to embrace gambling as a source of jobs.
But the slot parlors won’t offer nearly as many jobs as the full-fledged casinos. At the casinos, Massachusetts requires developers to invest at least $500 million, and also expects them to augment their gambling operations with resort amenities. Stephen Crosby, the chairman of the commission, talks about demanding a “wow factor” in the casino plans — flourishes that will dazzle visitors. The slot-parlor developers, however, must only put up $125 million. Not surprisingly, none of these no-frills plans offers much of a “wow factor.” At least initially, none would even include a hotel.
To their credit, however, all of the proposed slot-parlor developers enhanced their applications with some non-gambling amenities, though not in a way that sets them apart meaningfully. At Raynham, longtime owner George Carney promises to connect his project with a planned South Coast Rail commuter train station. The Cordish Companies, the Baltimore entity behind the Leominster plan, would construct a 430-seat performance venue. At Plainville, just down Route 1 from Gillette Stadium, Penn National Gaming says it will emphasize partnerships with the local tourism industry, including the Patriots.
But tellingly, all plan to install the maximum number of slot machines allowed under state law. Each developer had the opportunity to distinguish itself by offering a plan with fewer slots, more non-gambling amenities, and a more expansive vision for the facility. None of them took it. Indeed, the business models of all three proposals involve getting slot machines running as quickly as possible — and taking advantage of a two- or three-year statewide monopoly while the resort casinos struggle to win approval and finalize their more ambitious plans.
Nonetheless, there are still serious differences in the visions presented by developers, and within the mountains of paperwork filed with the commission. In four areas especially — the slot parlors’ ownership, location within the state, host community, and ties to horse racing — the commission has real differences to consider, and those points of distinction should provide the basis for their eventual decision.
The Carney family has owned Raynham Park for decades, and awarding the license to a deep-rooted local feels preferable to choosing an out-of-state company, even though the law makes no such distinction. George Carney, the family’s 85-year-old patriarch, has by all accounts been a solid employer and corporate citizen, and the whopping 86 percent approval the plan received in its Raynham referendum is a strong indicator of local standing. From nuns to neighbors, supporters have turned out strongly in Carney’s favor. His application even arrived at the gaming commission with a heartfelt poem.
Cordish and Penn National, on the other hand, are all prose and all business. Cordish owns or operates several casinos in Florida and Maryland. Publicly traded Penn National ranks as one of the largest gambling companies in the world, and already has a New England presence with a racetrack casino in Maine. The two companies’ experience in running slot parlors might weigh in their favor, but the commission could just as plausibly decide that a Massachusetts license should go to a Massachusetts owner.
The integrity of the owner also has to be a major consideration, and in that respect Plainville raises alarm bells. While Penn National itself is a reputable firm, the site still belongs to Ourway Realty, the company that controlled the harness racing track for years. Ourway initially sought to win the slot parlor license itself but couldn’t pass the commission’s background check. It hastily entered an agreement to transfer the site to Penn National, which now operates the track and will become the owner if granted the license. The terms of the deal with Ourway have not been made public, but the former owners would presumably profit handsomely.
That would reward a management team that was inept at best, and allegedly allowed the track’s former president to lift more than $1 million from the track’s cash room even as the track pleaded poverty on Beacon Hill. In the broader context of the Massachusetts political landscape, it would also reward one of the companies that lobbied the hardest to create a slot license in the first place, sending a message that lobbying and rent-seeking pays off in Massachusetts.
As legislators weighed whether to legalize casino gambling in 2011, the busy parking lot at Rhode Island’s Twin River casino helped tip the scale. Located not far over the state border in Lincoln, car after car pulls in with Bay State plates. Since Connecticut and Rhode Island introduced casino gambling in the 1990s, those states have harvested billions from Massachusetts gamblers. By some estimates, Massachusetts residents spend more than $1 billion a year at Connecticut and Rhode Island casinos, money that could be paying for roads and schools here.
Of the three slot parlor proposals, Raynham and Plainville would hit back at Rhode Island the hardest. Since most slot parlor customers typically come from within a 30-mile radius, either facility would cut heavily into Twin River’s customer base. Leominster, though, is almost an hour farther away.
But the state would still probably wring about as much overall revenue from Leominster — and without having to beggar Rhode Island in the process. While there’s a lot of righteous appeal in taking back “our” money from Rhode Island, that gut reflex doesn’t make for good policy. Massachusetts and Rhode Island aren’t warring duchies in the Middle Ages; they should pursue policies that help each other, and New England generally. The gaming commission has to consider whether ratcheting up an arms race with neighboring states is really a good plan, especially if the Commonwealth can reap as much overall revenue elsewhere.
The possibility that the Mashpee Wampanoag may someday open a casino in Taunton also argues against Plainville and Raynham. A casino in Taunton would leave two nearby Massachusetts facilities competing against each other as well as Twin River, raising the prospect of market oversaturation. That only increases the likelihood that all those casinos will come crying to their state legislatures demanding lower tax rates to survive, touching off a race to the bottom that could hurt both states. It’s a serious concern: As Pennsylvania and Maryland opened new casinos, Delaware’s existing facilities lost revenue. Now Delaware lawmakers are stuck trying to resuscitate a dying industry.
Leominster holds another distinction: Not only is it geographically remote from the other proposed and existing gambling facilities; it’s poorer than the other two towns vying for the slots parlor. Once known as a center for plastics manufacturing and the birthplace of the pink flamingo lawn ornament, Leominster has suffered much the same fate as New England’s other former factory cities. Traditional blue-collar jobs have moved overseas, leaving Leominster with the highest unemployment and lowest median income of the potential slot parlor sites. Yet its relative poverty could lead the gaming commission to different conclusions: Maybe Leominster needs the jobs the most, but maybe it’s least prepared to handle an addiction-magnet in its midst.
The social impacts, however, are nearly impossible to predict at any of the sites. There’s no generally accepted way to forecast the impact of newly opened casinos or slots parlors. Indeed, Massachusetts will be among the first states to track the effect of legalized gambling on addiction rates over time. While it seems plausible that a community like Leominster would suffer more from a slot parlor, there’s too little evidence to support making a decision on that basis.
Massachusetts Live!, as Cordish wants to call its proposed Leominster slot parlor, would have restaurants, an entertainment venue, and even charging stations for electric vehicles. But its most compelling feature may be what it lacks: any connection to horse racing, which has managed to embed itself into the Massachusetts casino law to a degree that harms the public interest.
Both the Raynham and Plainville plans brag of the boost that they would deliver to the ailing horsemen. At Plainville, Penn National promises that slot-machine revenue would subsidize harness racing, keeping the track alive. The former dog track at Raynham is too small to host horse racing, but Carney says he will reopen another track that he owns in Brockton for harness racing if he’s granted the slots license.
Both applicants portray their horse-racing plans as if they’re offering a great public service. The commission even seems inclined to see it that way. But entwining the state any more with horse racing would be a mistake.
Once a popular spectator sport, only two horse tracks remain in Massachusetts: the thoroughbred track at Suffolk Downs in East Boston and the harness-racing track in Plainville. Both spent years cajoling the Legislature for a casino law for the same reason as racetracks in many other states: They see it as the only way to remain in business.
The sinking popularity of horse racing threatens the livelihoods of veterinarians, blacksmiths, breeders, and trainers. For them, and the sport’s remaining fans, it’s a tragedy. But faced with any industry in decline — whether it’s horse racing or typewriters — the state should work to ensure new opportunities for affected workers, rather than keeping an unsustainable business on life support indefinitely.
The gambling legislation, unfortunately, gives the horse tracks a permanent bailout. The law devotes a chunk of the slot parlor revenue, plus a share of the initial license fee, to fatten horse racing purses. That’s more than enough state aid: Combining the slot license with a horse track will only take more dollars that could be used for other purposes.
While Raynham and Plainville boast of their lifeline for horses, Leominster has a better strategy. It promises to give an annual grant to a UMass program that supports startup medical device companies, a growing sector of the high-tech economy with realistic prospects for Worcester County and beyond. That’s a far better use of the money coming from the pockets of Massachusetts gamblers. And the Leominster plan would offer jobs and entertainment to a part of the state that has no current access to casino gambling, without threatening the livelihood of any resort casinos. For the gaming commission, it’s the better bet.