Massachusetts Casino Expansion Plan Sparks Revenue Concerns

Massachusetts is seeing growing opposition to an effort to install historical horse racing (HHR) machines at two former racetracks. Critics say the plan could hurt current casinos, cut public revenues, and create an uneven regulatory landscape. Massachusetts House Gambling Proposal Could Generate $120M Annually The proposal is included in a House version of an economic development bill that passed in July. It would allow Suffolk Downs and Raynham Park to run HHR machines under licenses previously issued to the old racetracks. The Senate version does not include that provision, leaving it among the issues lawmakers must work out on a conference committee, reported The Boston Globe. Ron Mariano, House Speaker, has defended the measure as a way to raise more money for healthcare. The proposal calls for 2.5% of the total amount wagered on HHR machines to go to the state’s Health Safety Net trust fund. The fund helps hospitals and health centers care for the uninsured and underinsured. Backers say the new gambling operations could produce $120 million a year in tax revenue by their third year. However, the state’s three licensed casino operators dispute those projections, warning that the expansion could hurt existing income streams. Massachusetts Casinos Cite Millions in Potential Losses From HHR Expansion Encore Boston Harbor, MGM Springfield and Plainridge Park recently called on lawmakers to vote no on the measure. They have an economic impact study commissioned by Morowitz Gaming Advisors and Global Gaming and Hospitality to support their concerns. The consultants said HHR operations could siphon off $131 million to $216 million in gambling revenue from the existing casinos. That could mean annual losses of $45 million to $73 million for state and local governments. The study also cautions there could be job losses and less business for companies tied to the casino industry. The report notes differences between the proposed HHR framework and existing state casino regulations. Currently, Massachusetts limits casino development to three geographical areas. Licensed operators also have to negotiate agreements with host communities and comply with regulatory requirements. Massachusetts Gambling Proposal Draws Tribal Opposition Over Economic Impact The House amendment, however, does not limit the number of HHR machines or the places where facilities could be operated. It also includes language that could allow for online HHR wagering, potentially giving another competitor to the Massachusetts Lottery’s recently launched online platform. The proposal has also faced opposition from the Mashpee Wampanoag Tribe, which runs the First Light Casino in Taunton, Massachusetts. Tribal Chairman Brian Weeden said he is concerned about the possible effect on the tribe’s economic interests and sovereignty. The two racetrack companies have attracted investor interest. Richard Fields, a Suffolk Downs investor, has shown interest in developing a gambling and entertainment venue. He has also said he wants to buy Raynham Park from the Carney family. Mariano said he has a personal relationship with George Carney, a member of the family that owns Raynham Park, but said the legislation is intended to help the state, not individual businesses.