Casino operators will bid very aggressively for a license to operate in the Boston area if gambling legislation passes, but Massachusetts officials should go slowly in selecting the eventual winner, says a professor of economics from the University of Nevada.
William Eadington, a professor of economics and director of the Institute for the Study of Gambling and Commercial Gaming, said a license to operate a casino in the Boston area would be a hot commodity because of the area’s population density and the propensity of residents to gamble.
“The license is going to be quite valuable,” Eadington said at a roundtable discussion hosted today by the Rappaport Center for Law and Public Service at Suffolk University Law School. “Boston is the best potential opportunity in the US that remains.”
Gambling legislation that passed the House and began debate in the Senate today envisions the awarding of three casino licenses and one license for a slots-only facility. One of the casino licenses would be targeted for a zone that includes Boston (Suffolk, Norfolk, Essex, Middlesex, and Worcester counties), while the other two would be in southeastern and western Massachusetts. Under the proposed legislation, the up-front licensing fee for a casino would be $85 million while the minimum capital investment would be $500 million.
Even though demand for the Boston license will be high, Eadington urged officials to go slowly in awarding it. He said the selection process should be transparent to the public and urged officials to consider inviting concept bids for the proposed casino before moving on to the actual bid process itself. Eadington said it might take three to five years before a casino actually gets built.
Eadington also said it will be important for gambling regulators to establish their priorities for the casino investments. He said his research indicates some gambling communities tend to look primarily for jobs from a casino, while others are focused on tax revenue, economic development, or tourism. State regulators should identify their top priority and then look for the proposal that best meets that goal.
Eadington said his research indicates 1 percent to 2 percent of all casino patrons have gambling addictions, but they tend to account for a disproportionate amount of gambling proceeds, anywhere from 10 to 35 percent of the total depending on which study you believe. In response to a question, Eadington said one way of restricting the access of problem gamblers to a casino would be to create a list of individuals who are not permitted entry and then require patrons to produce identification to gain admittance.
In response to another question, Eadington said fears about drug use and prostitution mushrooming near a casino tend to be overstated. He said most casino operators do a good job of policing such activities near their facilities.
Eadington holds the Philip G. Satre Chair in Gaming Studies at the University of Nevada, which is named for the former CEO of Harrah’s Entertainment and the current chairman of International Game Technology, a maker of slot machines.