Casino cannibalism

Massachusetts voters overwhelmingly voted to uphold the state’s casino gambling law earlier this month. By a margin of 20 percentage points, voters rejected a ballot question that would have repealed the 2011 law that legalized casinos in Massachusetts. The victory was a huge win for the casino industry, which has been buffeted by a regional slump; casino interests spent nearly $14 million fighting the repeal question. But now that the repeal question has been buried, it’s unclear what sort of prize the casino industry, and its backers on Beacon Hill, have won.

Backers of the 2011 gambling law, which legalized three regional casinos and one slot parlor, treated the law’s passage as the end of a long odyssey. In reality, casino legalization was just the beginning. In the past week, new questions have emerged on two fronts about the tricky economics of actually getting four gambling facilities up and running. The questions show that, even after this month’s ballot question, the basic assumptions behind the Massachusetts casino law remain shaky.

 

On Monday, the Globe‘s Mark Arsenault reported that clouds are hanging over southeastern Massachusetts, home to the state’s last unclaimed casino license. Arsenault wrote that industry players believe the region presents such steep risks that there may be “little or no competition for the license.” The region is hemmed in by Steve Wynn‘s proposed Everett casino to the north, a Plainville slots parlor to the northwest, and Rhode Island‘s Twin River casino to the west. The Mashpee Wampanoag tribe has lawyers working furiously to clear the way for a tax-free tribal casino in Taunton. Casino operators, Arsenault reported, are worried that the region is too risky to justify a $500 million capital investment. But the $500 million capital requirement was built into the 2011 casino law because lawmakers feared that, without a substantial upfront investment, legalized gambling would enrich casino operators without creating meaningful local economic gains.

There’s more trouble looming at the other end of the state. The Legislature created a western casino region, in part, to raid casino business from Connecticut and New York. The casino MGM is now building in Springfield is counting on out-of-state gamblers for 35 percent of its projected revenue. But the states those gamblers would come from aren’t standing down. New York is in the process of licensing up to four commercial casinos, to shut off customers to Springfield’s west. The Mohegan and Mashantucket Pequot tribes are moving on the city’s southern flank; they’re talking about cooperating on a gambling facility along Interstate 91, which would stem the migration of Mohegan Sun and Foxwoods gamblers to Massachusetts.

“The existing casinos are going to be cannibalized,” Mitchell Etess, CEO of the Mohegan tribe’s gaming arm, told the Wall Street Journal last week. The question for Connecticut lawmakers, Etess argued, will be whether Mohegan Sun and Foxwoods “will be cannibalized by tax revenues going to Massachusetts or will they be cannibalized by tax revenues staying in Connecticut.”

Earlier this year, the CEO of Foxwoods told the Wall Street Journal, “There is dramatic oversupply in the industry right now.” Revenues at Connecticut’s casinos have fallen sharply, while five Atlantic City casinos have closed this year. The Globe cited the industry’s widespread economic woes in urging voters to pull the plug on the Massachusetts gambling law. From Maryland and Pennsylvania to Connecticut and New York, every state in the northeast that has tried to cash in on casinos has only invited more competition for ever-scarcer gambling dollars. Massachusetts voters elected to stay in the casino arms race this month. But we’re only beginning to grasp what that decision actually means.

PAUL MCMORROW

BEACON HILL

In his second tapping of a Democrat for a high-profile position, Gov.-elect Charlie Baker named Steven Kadish, the chief operating officer at Northeastern University, as his chief of staff.

Two Republican state lawmakers urge the House Committee on Post Audit and Oversight to investigate hiring at Probation and make referrals to the House Ethics Committee if warranted, CommonWealth reports.

A social worker from the Department of Children and Families signed the wrong child out of a Fall River school and left with the boy without anyone questioning the error.

Secretary of State William Galvin orders public records training at the Department of Public Health, CommonWealth reports.

Calling Gov.-elect Charlie Baker the Gronk of Beacon Hill, Lowell Sun columnist Peter Lucas says the state’s new leader fumbled out of the gate by appointing Richard Taylor to his transition team.

Karyn Polito tells the Herald she will be the Paul Cellucci to Charlie Baker’s Bill Weld. She also tells the paper, “I fully embrace marriage for everyone, not just because it’s the law, but it’s because what I believe in my heart” — a statement that’s sure to draw howls from Democratic circles.

How the Legislature plans to allocate  the casino licensing fees from Wynn, MGM, and Penn National.

MUNICIPAL MATTERS

Brockton Mayor William Carpenter and the City Council are at odds once again after the council blocked his request for more money for the police overtime budget, which is on pace to be depleted next month, just halfway through the fiscal year.

A watchdog agency report has uncovered questionable spending practices by a foundation meant to provide added support for Boston public schools.

Boston Mayor Marty Walsh clears out several City Hall managers he inherited from Tom Menino.

Lakeville Town Meeting members voted overwhelmingly to sell the town’s water tower to Taunton.

Mass MoCA undergoes a multi-million renovation.

Foxboro‘s Town Meeting approves a $557,000 outlay for designing a new town hall.

NATIONAL POLITICS/WASHINGTON

Sens. Elizabeth Warren and Ed Markey both plan to vote against the Keystone XL pipeline, the Associated Press reports.

The CEO of Uber tells reporters Obamacare has been a “huge” factor in the company’s growth.

ELECTIONS

Larry DiCara and Sam Adams ask: What’s the matter with Blackstone, one of many smaller working-class towns that have gone from reliably Democratic to Republican?

A recount in the 5th Plymouth District where state Rep. Rhonda Nyman lost by 48 votes to her GOP challenger David Decoste will begin Friday and be conducted over the weekend.

BUSINESS/ECONOMY

In a visit to Boston, US Labor Secretary Thomas Perez says Massachusetts has been a “model for the rest of the nation” in providing pathways into the middle class. Columnist Tom Keane writes that a new report shows those opportunities are, in fact, unevenly distributed, with the Boston and Springfield areas of the state lagging other areas of Massachusetts.

Massachusetts gasoline prices are at their lowest level since 2010, WBUR reports.

The Kraft family wants to site a soccer stadium in Boston for the Revolution.

Paul McMorrow says the investigation of allegations of “dirty lines” in Massachusetts bars will mean nothing if it doesn’t lead to a reworking of an antiquated regulatory structure that protects big players in the beer industry at the expense of the entrepreneurs we say we want to encourage.

EDUCATION

Boston public schools second-grade teacher Jeffrey Cipriani says the PARCC assessment would be a step forward.

The pay for childcare workers has barely budged in 20 years, according to a new report.

Frederick W. Clark Jr., an executive vice president at Bridgewater State University and a longtime aide to the late US Rep. Joseph Moakley, has been tapped by the school’s Board of Trustees to become the university’s next president.

Milton resident David Godine is in the book publishing business, but it’s not the bottom line that drives a man regarded as one of the country’s foremost independent publishers.

The Atlantic has a skeptical take on universal pre-kindergarten as a cure-all for narrowing the achievement gap.

ENERGY/ENVIRONMENT

Hingham has received a state grant to study the effects of rising sea levels.

The second in a series of fish tales in the wake of the cod ban appears in the Gloucester Times.

CRIMINAL JUSTICE

Keller@Large says Bill Cosby is being tried in social media by innuendo rather than evidence over years-old allegations of rape.