If you build it, corruption may come

If you build it, corruption may come
Review of out-of-state casinos finds...
By Dave Wedge And Chris Cassidy

Beacon Hill has bet the house on casinos providing an economic boom, but in other states, the gleaming gaming palaces have brought political corruption, drugs, prostitution and other social vices — including some scandals involving gambling goliaths seeking to do business in the Bay State.

“You want to have a pool on when the first indictment comes down?” asked Barbara Anderson of Citizens for Limited Taxation, which took a neutral stance on legalized gambling. “There’s no doubt in my mind it’s going to cost us a lot more money than it brings in, and in the long run, the state’s going to regret having done this.”

Scandals have wracked states that have recently expanded or approved gaming, among them:

•    In Alabama, 11 people, including four state lawmakers, two casino owners and two lobbyists, were indicted last year for bribery, extortion, fraud and other charges in a scheme to buy pro-gaming votes;

•    In Pennsylvania, a grand jury issued a report in May hammering the new state’s gambling control panel as a secretive patronage haven that failed to properly screen casino investors because of political pressure;

•    In Iowa, four people, including two casino investors, were charged last year with making illegal campaign contributions to the state’s former governor to influence a gaming license; and

•    In Florida, the feds launched a probe in July into a Republican congressman and a $1 million consulting contract between a casino and a company owned by his mother.

With billions on the table since the Bay State OK’d casino gambling, national gaming companies are lining up for lucrative licenses, including some with issues in other states.

Caesars, which has partnered with Suffolk Downs to bring a casino to East Boston, was fined $250,000 in September 2010 for gaming violations in Las Vegas. A Caesars’ spokesman could not be reached, but Suffolk Downs spokesman Chip Tuttle called Caesars “the most highly regulated gaming company in the United States” and said the track and Caesars “intend to have best practices ... as we work to earn a license.”

The Las Vegas Sands, owned by Sheldon Adelson, is under federal investigation for bribery of public officials in Macau. Adelson, who is eyeing a Massachusetts casino, has denied his company violated any laws and blamed the probe on a disgruntled fired employee.

A Sands spokesman declined comment and referred to comments Adelson made in September, in which he said: “I and the company are fully cooperating with (the) investigation and will continue to do so. ... I am 100 percent — no 1,000 percent — certain that neither I nor any senior executive of this company has ever asked any employee ... to do anything improper.”

Penn National, a gaming company considering a Springfield casino, was hit with an $800,000 fine in Illinois in 2008 for sending discounts and free play coupons to problem gamblers who asked to be removed from mailing lists.

The company did not respond to calls seeking comment, but a spokesman was quoted at the time saying the incident was inadvertent and isolated and the firm had taken steps to prevent a similar occurrence.

Ameristar Casinos, which recently acquired land in Springfield for a possible casino, was hit with $167,000 in fines for gaming violations in 2010. Spokesman Troy Stremming said: “Team members understand that our gaming license is our lifeblood and everything we do has to be done in a fashion to protect that license.”

Street crime also has become a problem in many casino cities, including drugs, prostitution and theft. A recent University of Nevada at Las Vegas study found that 60 percent of gambling addicts admitted kiting bad checks while 30 percent copped to stealing from their workplace.

In December 2010, the Hard Rock Hotel & Casino in Las Vegas was hit with a $650,000 fine — the largest in Nevada history — after eight people, including several employees, were busted for selling pot, cocaine and Ecstasy at nightclubs.

Stephen Crosby, tapped by Gov. Deval Patrick to head the state’s new gaming commission, pledged vigilant enforcement and rigorous screening of casino applicants. “(The) highest priority is to assure the people of Massachusetts that this process will be transparent and evenhanded, and will conform with the highest possible standards of ethics and the law,” Crosby said.