Gaming bill poses risk, high costs

Brian Watson: Gaming bill poses risk, high costs


The proposal to build two casinos somewhere in Massachusetts and install 3,000 slot machines at the state's four racetracks, would fold quicker than a pair of twos in a back-room poker game if it were subject to the kind of scrutiny and analysis it should be receiving. But House Speaker Robert DeLeo and the track owners, casino developers and lobbyists who favor this proposal will try to get the legislation passed this week.

Proponents of the gambling bill have touted the recent report by the Spectrum Gaming Group, which outlines the anticipated revenues that could come from the new casinos and slot machines. The state would receive licensing fees and a yearly percentage of the casino and slot winnings.

But nowhere in the 78-page document are there estimates for the costs to the state and its taxpayers that would accompany legal gambling. There is indeed a substantial financial downside to the proposal that supporters of the legislation have refused to tally.

The experiences of other states with casinos also show that the costs increase over the years while revenues decline. The licensing fees, for example, are one-time, one-year, gains. And invariably, after a few years, casino owners renegotiate sweeter deals for themselves, with smaller revenue percentages for the state.

Meanwhile, as costs associated with problem gambling expand over time, the state is left to address them. Gambling can cause some degree of hardship or disruption in up to 30 percent of players, and these problems spill into society in many costly ways.

The worst cases — addicted gamblers — lose their jobs; destroy their families; default on loans, bills, and credit cards; and steal and commit crimes. Their actual financial burden on the taxpayers is significant. You and I pay for the extra costs that they place on financial institutions, insurance companies, the medical system, law enforcement agencies, the court system, social service agencies, and the prison system.

In milder cases, where poor people simply gamble away their paychecks, society pays in subtler ways. First, there are the losses to the gamblers themselves. Their money won't be used to support more constructive endeavors in their own lives that would have a much bigger economic multiplier effect for the growth and productivity of society as a whole.

Secondly, other members of their families then often need financial assistance and other help to compensate for the lack of family savings and resources simply to pursue normal, educated, productive lives.

Want numbers? If we end up with roughly 40,000 problem gamblers (or families) every year, each of whom requires an average of $10,000 in state services — ranging from brief counseling to full incarceration — that would total $400 million a year in costs, which is exactly the average annual revenue that the state would receive from the casinos and slots.

Furthermore, the casinos and racetracks themselves require oversight and regulation. Hundreds of new state officials would be added to the Attorney General's office, the State Police, and to a new "Gaming Commission." Incredibly, an entire new prison could become necessary.

Add all the costs together, and the gambling legislation is a money-loser for the commonwealth. Not in the first few years, to be sure, but for all the years thereafter.

Speaker DeLeo is fond of saying that this is a jobs bill. I say let's take the more than $400 million that casinos and slots would cost the state every year and use it to build jobs programs that are much more constructive and economically productive.


Brian T. Watson of Swampscott is a regular Salem News columnist.