Raynham Casino, Racino, Slots, Raynham Taunton Dog Track in Massachusetts.

$100M will be recaptured from Rhode Island slot parlors
Connecticut casino revenues mostly unaffected

If state leaders next year approve 1,000 slot machines at each Massachusetts racetrack, the four tracks will generate at least $300 million, according to a preliminary review by the Center for Policy Analysis (CPA) at the University of Massachusetts/Dartmouth. Estimates show that the 4,000 slots will also capture $100 million from Rhode Island’s two slot parlors --- Lincoln Park and Newport Grand.

House and Senate legislation filed for the 2005 session seeks approval of slot machines at the state’s racetracks and the licensing of two casinos --- one in western Massachusetts and the other in either Bristol or Plymouth County. A more detailed analysis will be contained in the center’s “2005 New England Casino Gaming Update,” scheduled to be released in late January.

CPA Director Dr. Clyde W. Barrow said that slots “could be the first step toward recapturing some of the $1 billion-plus spent annually by Massachusetts residents at Connecticut’s casinos and Rhode Island’s slot parlors.” Last year’s New England Casino Gaming Update estimated that Massachusetts residents spend about $829 million, and Rhode Island residents more than $300 million, at Foxwoods and Mohegan Sun.

“Massachusetts slots will spur intense competition for the region’s convenience gaming dollars that are now monopolized by Lincoln Park and Newport Grand,” Barrow said. Rhode Island’s facilities offer video lottery terminal (VLT)-style gaming --- similar to slot machines --- and simulcast betting on horse and greyhound racing. Lincoln Park also offers live greyhound racing.

Barrow said that CPA’s analysis is a "conservative estimate." But with Massachusetts residents representing a sizable percentage of Lincoln Park and Newport Grand’s patrons, he added, "once Massachusetts' slots come on line, the Massachusetts tracks will begin to cannibalize a significant portion of Rhode Island’s VLT revenues, and capture additional dollars due to currently unsatisfied demand for convenience gaming." He also said that Massachusetts residents account for half of New England’s population and, with most residing in communities from Worcester County east to Cape Cod, "that demographic suggests the four Massachusetts tracks are ideally situated to dominate the region’s convenience gaming demand."

Barrow cautioned the legislation's reference to casinos is highly speculative and does not note the investment and size of a casino project, specific sites, the gaming tax, and forms of gaming and non-gaming amenities. "As such, discerning the fiscal and economic impact at this time would be difficult."

Conservatively assuming a win-per-machine (wpm) of $200 per day, the 4,000 slot machines would achieve $292 million in new revenues. Foxwoods, Mohegan Sun and Lincoln Park all have wpm per day averages exceeding $300, while Newport Grand’s exceeds $200. Massachusetts slots could soon approach or exceed a $300 wpm per day, but to do that, Barrow said, "Massachusetts convenience gaming would need to mature, require increased marketing, and need to capture some of Foxwoods and Mohegan Sun's Massachusetts patrons." The latter, Barrow added, "may not be so easily achieved."

Despite Lincoln Park and Newport Grand’s decade-long convenience gaming monopoly and revenue success, neither Rhode Island facility has been able to intercept the $829 million that Massachusetts residents spend annually at Foxwoods and Mohegan Sun, nor have they been about to recapture the $300 million that Rhode Islanders spend at Foxwoods and Mohegan Sun. "That’s because slot parlors and destination-casinos attract different clientele and occupy distinct niche markets," Barrow said.

Barrow said with southeastern Massachusetts' Raynham-Taunton Greyhound Park (Raynham) and Plainridge Race Course's (Plainville) proximity to Rhode Island, "there’s no question that Massachusetts slots will seriously impact Rhode Island’s VLT revenues," But without casinos, "Massachusetts, like Rhode Island, will continue to lose hundreds of millions of dollars annually to Foxwoods and Mohegan Sun."

The difference between Rhode Island's slot parlors and Connecticut's casinos is that racetracks require little capital investment to house and operate slot machines," Barrow said. "Casinos built to compete with Foxwoods and Mohegan Sun will require at least $500 million in initial capital investment, but no corporation is going to invest such monies if a gaming tax renders it incapable of competing."

Unlike traditional gaming tax structures, the Rhode Island Lottery Commission owns and operates the VLT’s, but contracts with the slot parlors to house the machines. The state then pays Lincoln Park, Newport Grand, technology providers, communications providers, and host communities a combined 40% share of VLT revenues. By compact with the state, Connecticut’s casinos pay 25% of the slot win to the state treasury; table games and other forms of gaming are exempt from the compacts. "Most Massachusetts residents aren’t going to drive to a Rhode Island slot parlor or Connecticut casino if they can have the same experience in Massachusetts," Barrow said, "and the best way to ensure that residents stay and play in Massachusetts is to frame slot or casino legislation that is competitive in size, types of gaming, amenities and tax structure."

Barrow said Massachusetts track owners should also take a page from Connecticut’s playbook. "Their tourism and hospitality industries embrace the casinos as economic partners and, as a consequence, southeastern Connecticut is now the state’s premier tourism region, and there has been strong growth in jobs, wages, hotels, restaurants and retail in that region."

Rhode Island’s tourism and hospitality groups have been less enthusiastic toward Lincoln Park and Newport Grand and, in many instances, advertise the state’s proximity to southeastern Connecticut casinos --- at the expense of Rhode Island’s slot parlors. The lesson to be learned, he added, is "Massachusetts will compete easily with Lincoln Park and Newport Grand, dominate the region’s convenience gaming market, and impact Foxwoods and Mohegan Sun’s revenues, if Bay State gaming operators work in tandem with Massachusetts tourism and hospitality groups."

Raynham Park Wants Slot Machines

Raynham Park dog track wants slot machines, and they don’t care whether or not Middleboro gets them because they know that they need them. George Carney, owner of Raynham Park, said right before the vote that it did not matter what Middleboro residents vote for, they will continue to pursue getting slot machines.

Carney says that the number of Massachusetts residents going over the state lines to Connecticut to play their slot machines is ridiculous. He says that if the governor were to send a trusted ally over there they would see that at least half of the cars there belong to Massachusetts residents.

He says that the amount of competition that they are facing from both Rhode Island and Connecticut makes it imperative that slot machines be approved for the tracks in Massachusetts as well. He is planning on going to the state to ask them to approve slot machines. He says that if the state sanctions casino gambling in Middleboro it will make the fight to just get slot machines at his track much easier.

Carney went on to say that before slot machines were approved in other states, Raynham Park actually did “more business than any dog track in the world.” They have been racing since the ‘40’s and have more than 800 people working there. If they were to go out of business, Raynham would be in serious trouble as they are one of the town’s top five taxpayers. It really is a necessity for both the town and the track to get slot machines approved.

Raynham Casino, Racino, Slots, Raynham Taunton Dog Track in Massachusetts.

The Raynham Casino Initiative will help strengthen the economy of Raynham and the entire region.

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•Raynham Casino will create construction jobs,permanent jobs and new jobs in our communities as local vendors and suppliers benefit from the increased demand for products and services that a casino in Raynham would require.

• Raynham Casino will mean Good Jobs and Good Benefits for the hard working families of Raynham, Bristol and the entire region.

• And the Raynham Casino will mean additional Revenue for our communities and for the Commonwealth of Massachusetts. Critically important funds that will help pay for vital services for our citizens.

Raynham Slots YES! —
Creating jobs, strengthening our economy, increasing state and local tax revenues while anchoring the growing tourism industry in Southeastern Massachusetts

Cahill wants 3 parlors for slots

Sees state gaining $244m in taxes

By Matt Viser

Globe Staff / March 3, 2009

State Treasurer Timothy Cahill plans to propose today that the state sell the rights to as many as three slot parlors across Massachusetts, a push far less ambitious than Governor Deval Patrick's bill for three casino resorts last year but one that Cahill will argue is the quickest way to boost state coffers.

Cahill, who is prepared to discuss the proposal at a legislative hearing today and fully unveil it at a speech tomorrow, estimates the state could reap up to $244 million annually by collecting a 27 percent tax on revenue from the slot machines, according to two state treasury officials.

In addition, licensing fees for 15- to 20-year operating rights could bring in between $2 billion and $3.3 billion in up-front payments, according to the two treasury officials who spoke on the condition of anonymity be cause the plan hasn't been made public. The figures are significantly higher than the governor's 2007 estimate, which was $600 million to $900 million.

"We think there is a market for this," said one of the treasury officials. "There's no appetite for casinos because nobody wants to - nor do they have the funds to - build the infrastructure. But for this particular market there is an appetite. At some point it's going to happen, and we have to capitalize on it."

Cahill's proposal appears certain to reinvigorate the debate on expanded gambling in Massachusetts and could be a bridge between Patrick's proposal for more elaborate and expensive resort casinos and House Speaker Robert A. DeLeo's desire to allow slots at racetracks, including those in his district.

It would not create the vast number of construction or hotel and restaurant jobs that resort casinos would, making key union support uncertain. Indeed, Cahill's proposal is a stark contrast to the lavish casino developments initially promoted by Patrick and supported by Cahill himself, designed to spur thousands of construction jobs before attracting conventions and visitors looking for high-quality dining and entertainment. Patrick has been lukewarm about slots without casinos.

But what they lack in amenities, they make up in immediacy: Slot parlors are often housed in quickly erected, warehouse-like structures that could supply a revenue stream at a time when Massachusetts is suffering its worst budget crisis in decades.

"We all know we're in a recession. This will allow for immediate revenue," one of the treasury officials said. "It's cash, and it's quick cash."

Cahill, who has been seen as a rival to Patrick and a possible gubernatorial candidate, will describe the plan in an address tomorrow before the Greater Boston Chamber of Commerce. The topic is expected to arise today when he testifies before the Legislature's joint Ways and Means Committee.

Under Cahill's plan, which would need approval from the Legislature and the governor, two or three licenses would be put out to bid. Each developer would be authorized to install 2,500 to 3,000 slot machines, potentially bringing as many as 9,000 slots to Massachusetts.

Commercial casinos and racetrack casinos mean jobs, revenues and opportunity for 20 states across the country. To see how commercial casinos contribute to your state, refer to the chart below.

STATE NUMBER OF LOCATIONS STATE AND LOCAL TAX CONTRIBUTIONS JOBS
Colorado 40 $115.41 million 7,925
Delaware 3 $216.63 million 2,891
Florida 3 $101.15 million 2,270
Illinois 9 $833.90 million 8,337
Indiana 13 $841.99 million 15,671
Iowa 17 $314.78 million 10,434
Louisiana 18 $559.19 million 18,009
Maine 1 $20.59 million 167
Michigan 3 $365.60 million 7,650
Mississippi    29 $350.44 million 30,572
Missouri   12 $417.33 million 12,160
Nevada   339 $1.034 billion 201,953
New Jersey   11 $474.72 million 41,672
New Mexico 5 $63.64 million 1,660
New York 8 $449.90 million 3,741
Oklahoma 3 $10.17 million 822
Pennsylvania 7 $461.07 million 3,753
Rhode Island 2 $283.61 million 1,500*
South Dakota 33 $14.93 million 1,558
West Virginia 4 $439.94 million 5,275
TOTAL    560 $7.369 billion 378,020
Tax and employment figures are as of 12/31/2007
* Rhode Island employment figures include only one of the two properties in the state.

Q. How will local communities benefit from slots at the tracks?

A. The Governor and state legislature will decide how slots revenues are to be distributed among state and local needs. Clearly, education funding needs are a top priority, as are local requirements for improved community services, such as improved recreational facilities, enhanced public safety measures, and job training and other economic development tools. The local communities will also gain many new jobs, both at the tracks and through the increased economic activity generated by the increased visits to the tracks. Local hotels, gas stations, restaurants and other service businesses will benefit in a meaningful way. State and local government tax receipts will grow through increases in new jobs and spending, both at the tracks, in the local communities, and from the suppliers of goods and services to the tracks and local businesses.

Political, economic changes may usher in slots at Raynham Dog Track

From where George Carney sits, it seems all the pieces might be falling into place.

The owner of Raynham Park, the area’s greyhound racetrack, has been thumping to get slot machines there for more than a decade. Faced with falling profits year after year, Carney has long insisted that slots would save the track, the jobs it provides to local families and the revenue it provides locally and statewide.

Despite years of elbow-rubbing and pleading, every attempt has been snubbed by Beacon Hill. And now, thanks to a ballot question approved by the majority of Massachusetts voters last November, the track can no longer race dogs as of Jan. 1, 2010.

Rep. David L. Flynn, D-Bridgewater, said in the fall he intended to file a bill this year — for the third time — to get slots at the tracks. At the time, he didn’t have high hopes.
But a perfect storm, so to speak, of recent changes in the political and economic landscape may enable Carney, Flynn and their supporters to strike it lucky this year.
“God knows the state needs the money,” said Carney, who would need to invest in “a major expansion” to accommodate slots. “It’s going to be a hard thing for them to turn down.”

The newest bill proposes installing 2,500 slot machines at each of the state’s four racetracks — Raynham, Suffolk Downs in East Boston, Wonderland in Revere, and Plainridge Racecourse in Plainville.

Strapped for cash

Although legalized gambling has long been politicized, the state is hurting for cash amid a national recession. Citing massive budget shortfalls, Gov. Deval Patrick recently rescinded millions in local aid money mid-year from communities statewide, warning of deeper cuts next fiscal year.

Meanwhile, unemployment continues ballooning, and hundreds more are about to become jobless when dog racing is illegal and the track would otherwise be shuttered.
“I have between 600 and 800 people working for me,” Carney said, counting his employees and contractors. “Every one of those jobs — at minimum — can be saved.”

The new Speaker of the House, Robert DeLeo, D-Winthrop, has a sympathetic ear toward racetracks and slot machines — contrary to his predecessor, the fiercely anti-gambling Sal DiMasi. “Everyone in the world knows now that I’ve been a proponent of slots at the racetracks. I see that as a way of getting some immediate funds into the commonwealth,” DeLeo said last week.

But could slots also open the door to casinos in Massachusetts? Critics paint legalizing them as a sort of gateway drug to tribal casinos, arguing approval for slots would essentially make Class III gaming, or casino-style gaming, legal. That could pave the way for a casino in Middleboro, which has been proposed by the Mashpee Wampanoag tribe, provided the tribe gets federal approval.

“It makes the Middleboro concern more likely,” said Richard Young of Middleboro, president of Casino Facts, a Middleboro anti-gambling organization.

Odds are in bill’s favor

If approved at the Statehouse, the bill allows for each host community to have the final say as to whether they want slots in a town meeting vote. And it looks promising that it could pass. The track has an emotional tie with many in Raynham because of its reputation for providing jobs.

In perhaps any other town, the introduction of slot machines in its backyard might make residents recoil. But in Raynham, it’s embraced.

“Anything to keep our tax rates down,” said Maurice LaFlamme of Raynham, whose two brothers, now deceased, worked at the track. “I like the idea of slots,” said Jayne Champagne, 54, who describes herself as “real townie.”

“It might cause a problem with traffic, but wherever you go there is traffic anyway,” she said. “A lot of people I know are out of jobs. This would be a good thing for the town — and for jobs.”

In a survey Flynn mailed to 400 voters in Bridgewater, Raynham and Easton last summer, nearly seven of every 10 respondents — 68 percent — favored slots at all racetracks.

If slots were approved, the law would allow the machines to be installed after 90 days — an immediacy that counters the sluggish path of legislating and building a casino.
In the past, Flynn has estimated the state would reap $700 million from slots in their first year and $400 million annually thereafter, but since the economy has continued slumping, he has backed off any firm figure.

“If they wish to say I’m too optimistic and cut them in half, I’m fine with that,” said Flynn, D-Bridgewater. “It’s still a few hundred million dollars we don’t have.” But opponents of expanded gambling call the predictions a ruse.

“A lot of people will say it’s an economic boon, but what it does is takes money from preexisting businesses,” said Young, who also heads up Casino Free Mass, a statewide coalition of groups that oppose casinos. Young argued local restaurants, shops and tourist industries would lose if slots come to town because that’s where visitors would take their disposable income.

Then there is Twin River. The Lincoln, R.I., greyhound track and slot parlor was expected to reap $246.8 million from slots for the state this year — the third-largest revenue source for Rhode Island — but is reportedly unable to repay its lenders, the Providence Journal reported last month.

Saddled with the possibility of losing its quarter-billion-dollar share, Rhode Island lawmakers are considering a state buyout or takeover of the business, the ProJo reported.
Flynn said he expected the House to take up the vote by April.