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Liens by casinos: Gambling away the house

If you borrow money from a bank and don’t pay it back, the bank puts a lien on your home. Two Connecticut casinos — Mohegan Sun and Foxwoods — take a similar approach to patrons who borrow money for gambling. As detailed in a story by the Globe’s Mark Arsenault, this policy has already led to dozens of liens on homes across Massachusetts.

The Commonwealth should not allow prospective Bay State casino operators to do the same. The state’s gambling law addresses who can get credit from casinos. But it doesn’t address the specific manner in which a casino can seek to recover a debt. The Massachusetts Gaming Commission should close the door on predatory home liens.

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Casino credit is supposed to be a convenience for big spenders with big bucks of their own. It’s not for the little guy who burns through his own cash and then borrows in a desperate effort to win it back.

The state casino law currently calls for the Gaming Commission to come up with procedures to confirm that a patron has a solid credit history. Under the law, casinos will also be prohibited from cashing a government-issued check; operating an ATM or credit card machine that would allow patrons to obtain cash from a government-issued electronic benefits transfer card; or extending credit to a patron who received any form of income-based public assistance. A person may also petition the gaming commission to place another person’s name on a list of people who can’t get credit.

Yet these provisions don’t account for the possibility that a regular casino patron’s fortunes may shift with a layoff notice — or for the incentive that casinos have to use loans to keep customers gambling up to the limit of their financial means. Allowing home liens makes it too easy for casino patrons to take on dangerous levels of debt. And if casinos shy away from offering loans without homes as a collateral, so be it.

In the casino business, there’s risk on both sides — or at least there should be. The Massachusetts Gaming Commission should make sure casino operators stop short of taking gamblers’ homes.

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