In the eight years casino gambling has been legal in Massachusetts, a series of hurdles has beset the industry, leaving the state one casino short of what lawmakers envisioned.
Lower than expected gaming revenues and uncertainty around a proposal made by the Mashpee Wampanoag tribe to build a casino in Taunton have created uncertainty around whether the Southeastern part of the state would be able to support a casino.
The Expanded Gaming Act, which former Gov. Deval Patrick signed exactly eight years ago on Friday, allowed for three casinos and a slots parlor, and the carved the state into three regions. In June 2019, Encore Boston opened in Region A, which encompasses the eastern and central part of Massachusetts. The MGM Springfield in the western part of the state, or Region B, has been operating for a little more than a year. A slots parlor in Plainville opened in 2015.
Debate over what to do with Region C, which encompasses Bristol, Plymouth, Dukes and Barnstable counties, has been ongoing.
"Eight years ago, I think they expected to have all three casinos up and running in those three regions and the slots parlor a lot sooner than eight years,” said Providence College Professor Patrick Kelly, who studies casino gaming. “But here we are eight years later and there is no prospect in sight of an answer for Region C in the next year."
One question complicating the discussion is whether the market supports a full casino in the region, given disappointing figures from the state’s existing gaming establishments.
Paul DeBole of Lasell College, who studies casino gambling, said Encore Boston Harbor initially projected about $800 million in annual revenues.
"Even assuming they stay with about $50 million in gaming revenues a month, they’re still going to be about 200 million dollars shy on that,” he said. “For Plainridge Park, I know they were projecting $300 million [in annual revenues]. And they downgraded that to $225 million, and they downgraded that to $200 million.”
Debole said Plainridge Park is now projecting about $160 million in annual revenues. And he said MGM Springfield revenues are also coming in below expectations, too.
"There's a theory that there's a fixed amount of disposable income that people allocate towards gambling," DeBole said. He said we might have reached a point where the gaming market is saturated. "And isn't it better to have two more profitable facilities than three marginally profitable facilities?"
Despite the revenue issues, there are developers who are interested in trying. One proposed spot for a gambling facility is in a huge clearing in the woods of Wareham.
A development company called the Notos Group would like to build a horse racetrack on that site. And Tom O'Connell, the company’s founding member, said in order to make the project economically viable, they needed to add one key element — a gambling facility.
O’Connell’s plans don’t call for building a full casino. Instead, he’d like to pull what’s known as a category two level license. That would give him the ability to create a business with up to 1,250 electronic games.
“It’s not table games,” he said. “It's not a full casino by any means."
But there's a problem with that proposal. A slots parlor isn’t legal. The Expanded Gaming Act doesn’t allow the Massachusetts Gaming Commission, the body that approves and oversees casinos, to deviate from the three casino and one slot parlor mandate set by the legislature.
"It would be shameful to have this entire region not benefit from the jobs and economic activity that were promised in the original Gaming Act, just because people are locked into 2011 studies and dated studies that don't reflect current market condition," O’Connell said.
O’Connell is closely watching what happens with House Bill 4070, introduced in August by Rep. Susan Williams Gifford of Wareham. The bill would give the Gaming Commission the authority to issue a Category 2 license in Region C, “should the Commission determine that a category 2 license would better accomplish the Legislature's objectives.”
However, others — like Sen. Marc Pacheco — say a slots parlor isn't grand enough for the region. Pacheco visited the Gaming Commission last month to speak out against the bill that would allow a slots parlor license in his district, which is in Region C.
"Should be the same as A and B, not anything less,” he told the Gaming Commission. “We don't want anything less than that in Southeastern Massachusetts."
Part of the reason there’s no casino in Southeastern Massachusetts is an open question about the Mashpee Wampanoag tribe. Their plan to open a tribal casino in Taunton was dealt a serious setback last year when the Bureau of Indian Affairs reversed a decision to grant the tribe reservation land.
Patrick Kelly is a professor of accountancy at Providence College and studies casino gaming. He said the uncertainty around the tribe’s status puts the state Gaming Commission in a tough place.
“If you’ve got the Mashpee Wampanoag tribe and its ability to build a casino in question, I think [the Gaming Commission] would like to see that question resolved before they make another decision on a casino in that region,” Kelly said.
The Wampanoags’ compact with the state says a tribal casino wouldn’t have to pay any taxes if a resort casino opens up in the region. The compact was agreed to in 2013 — before it was determined where the state’s one slots parlor would be. So, as the hopeful Wareham developers are quick to point out, the compact stated if a slots parlor opens in Region C, the tribe agreed to pay a 15 percent tax. That would be on top of the 49 percent tax the slots parlor would pay.
It’s not clear what — if anything — will be built in Region C. And the Gaming Commission may go back to the drawing board. In an effort to move forward, they took the first steps last month towards ordering a new market analysis of the region.
