Sunday, November 20, 2011

Looking Into the Casino Crystal Ball: Predictions

So now that the casino bill is done, destined for a quick signature  (strike that, replace with 'signed') by the Governor after a perfunctory review, it makes sense to take stock of the various predictions and promises offered up by gaming proponents in their successful drive to bring a little bit of scenic Atlantic City to our doorsteps, and to offer some predictions about how all of this is likely to play out.

1. Licensing Fees:  Proponents - including the casino champs Governor and Speaker DeLeo - estimate that each of the three regional casinos authorized by the bill that passed this week will garner an initial licensing fee of at least $85 million.  This is already a steep discount from the $200 million per license floor that was promised during the first Patrick Administration go-round on casinos.  Why?  Simple: because the economy stinks, and even though it will improve eventually, more and more states keep legalizing casino gaming.  With each new potential market, the amount a developer will be willing to pay to break into any one of them will drift inexorably lower.

2.  Revenues: We're promised anywhere from $300 to $500 million per year in casino revenues.  One word: Ha!  Not likely.  Same reason as above, only this time it won't be the developers who are stretched thin across the suddenly casino-studded landscape.  There are only so many people out there who are inclined to spend their time losing money in casinos.  If the market is not already saturated (and the sagging fortunes of Connecticut's casinos and Rhode Island's gaming facilities suggest it may be), then it will be soon.

3.  Jobs: Casino proponents, including the Governor, the Senate President and the Speaker, have promised 15,000 permanent jobs.  Recently the Globe reported that in Pennsylvania, ten full-scale casinos employ exactly that number of people.  We're planning three.  Math.  Look for pols to start referring to jobs "saved or created," and shortly thereafter to use the jobs shortfall as a rationale for more casinos (see next prediction).

This box can't open just a crack
4.  Before Long There Will Be More Than Three: A big selling point in Governor Patrick's early pitch was that casino licenses in Massachusetts will be limited to three (plus one "slots parlor").  We won't end up like California, with a sad, tacky little casino storefront at every interstate rest stop.  Pandora's Box can be opened but a crack.  NonsenseAccording to the Globe, there are already at least ten casino developers eying various locations across the Commonwealth, with more expected to jump into the fray as the highly-political and contentious local battles over the license bidding process heat up next year.  Three of these will get their licenses, and their casinos.  The others will sue, and eventually they will win. Even if they don't (or perhaps before they get a chance), politicians disappointed by the failure of revenue and jobs projections for three casinos to live up to expectations (see points 1-3 above) will quickly decide to double down - and will repeat their fanciful predictions in justification of the next round of licenses.

4.  Some of the dire predictions about increased drunk driving deaths, political corruption, crime, graft, addiction and bankruptcy won't come true.  Some, on the other hand, will.

5.  We'll see our first major gaming-related scandal within six months.  It might have to do with the license bidding process, or it might be retroactive to this year's backroom assemblage of the legislation passed this week.  But Massachusetts being Massachusetts and our ruling machine being what it is, investigative reporters are going to have a lot to work with going forward.

6.  During the next budget crisis after casinos revenues start coming in, we'll be no better off than we were during the last.  As has occurred in each and every state that legalized gaming before us, the revenues that are generated - whatever they end up being - will be eagerly spent.  Our pols will dig the next hole just as deep as the last one.

 7. Despite all of this, Governor Patrick, Speaker DeLeo and their allies will count the casino initiative as a success.  Whatever the revenues from licensing fees and operations, and whatever the jobs total, the pro-casino caucus will continue to use their own numbers: $300-$500 million in revenues, 15,000 permanent jobs.  Occasionally a reporter will call them on it; more often the press will dutifully parrot the claims. 

Although I realize that I could easily be mistaken for a puritan on the gaming issue, in truth my personal opposition to the notion has never stemmed primarily from fears about the social impacts that these gaming megaplexes are bound to have on our communities.  What has bothered me all along is the patent nonsense that has passed for pro-casino argument, ever since Governor Patrick in his first year in office suddenly designated gaming the sum total of his plans for economic development in the Commonwealth. That, and the fact that one of the aforementioned developers wants to put a casino in my back yard.

What our legislature (on a bipartisan basis) has just done is deliberately create a whole host of new problems, for very little in return. We've been sold a bill of goods - much the same one, ironically, that casino operators sell to the patrons who come through their doors, desperately hoping to solve their financial problems with a roll of the dice or a pull of the lever.

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