Bill would bar any casino bailout

Bill would bar any casino bailout
By John J. Monahan TELEGRAM & GAZETTE STAFF

BOSTON — A bipartisan group of Central Massachusetts lawmakers has launched a legislative drive to protect taxpayers from having to bail out casinos and to prohibit local and state elected officials from taking jobs at casinos for five years after leaving office.

State Reps. Matthew Beaton, R-Shrewsbury, and Kimberly Ferguson, R-Holden, are co-sponsoring the legislation, billed as a taxpayer protection bill.

They have gotten support in the Senate from James B. Eldridge, D-Acton, who tried to attach the five-year cooling-off period in an amendment to last year’s legislation that legalized casinos.

Mr. Beaton pointed to financial problems that have beset casinos in Rhode Island and Connecticut as evidence that the state needs to avoid a situation in which taxpayers would pay if casinos fail to be profitable.

“It’s vital that as Massachusetts begins to expand its gaming industry, it establishes a firm set of rules and not allow a dime of public money to be spent bailing out Massachusetts casino investors who made a bad gamble,” Mr. Beaton said.

The five-year job ban, he said, is also needed.

“It would ensure the public that we are operating on the merits for what is best for the commonwealth and not for future employment for legislators or their families,” he said. “It would remove all doubt in the public’s eye of the intent of legislative actions,” Mr. Beaton added.

The bill would do three things:

•Increase the cooling-off period preventing elected officials from working in the industry to five years instead of the one year provided for in the casino bill adopted last year.

•Prohibit casino operators from renegotiating to decrease the state’s share of gaming revenues.

•Prohibit taxpayer-funded bailouts of struggling or failing casinos.

When the casino legislation was debated last year, Mr. Eldridge filed an amendment in the Senate to impose the five-year cooling-off period, triggering what became the most heated portion of the Senate’s casino debate.

When some members appeared offended by the idea that anyone would see the need for a ban on former lawmakers holding casino jobs, Senate President Therese Murray abruptly halted debate on the amendment. She then recessed the Senate to caucus behind closed doors, and called it back into session a short while later to approve a different version.

That version, limiting the cooling-off period to only one year, was adopted with no debate.

The five-year cooling-off period was also originally in the House version of the bill, but was scaled back to one year by the time the House adopted the legislation.

Mr. Beaton said he believed the five-year period was the right way to go, specifically to eliminate the possibility or perception that state lawmakers or local selectmen, mayors or councilors who are involved in casino siting decisions could take jobs in exchange for favorable treatment of casinos.

Unlike other industries, “It’s an industry that is going to be controlled by the Legislature,” he said, and he wants to remove any perception that influence could be traded for future employment.

Mr. Beaton said he also has serious concerns that taxpayers would be on the hook to reduce tax rates on casino revenues or bail them out with public money if they were to run into financial trouble.

In 2010, he said, the state of Rhode Island put up $3.7 million in new annual marketing subsidies for the gaming operation to keep the Twin Rivers casino operating under new ownership. The bailout legislation obligated taxpayers to reimburse the owners for any losses incurred from other competitors in the state.

“They went bankrupt, and debtors assumed ownership, and some were large banks, including Bank of America,” Mr. Beaton said.

He said taxpayers also need to be protected from future efforts to reduce the share of gross gaming revenues that will go to the state. The current law calls for casinos to pay a 25 percent tax on gambling revenue, while the single slot parlor authorized by the law will pay 40 percent.

He said that since the bill was filed last week, he and Ms. Ferguson have seen lawmakers from both parties voicing support.

“We have largely gotten bipartisan support from supporters and opponents of casinos,” he said.

Mr. Eldridge said he doubts the legislation will come up for a vote in either the House or Senate this year because it was filed late in the session. The Legislature is scheduled to end its formal session for the year on July 31. But he said the legislation is needed.

Meanwhile, Mr. Eldridge, who supports a constitutional amendment to curb new rights of corporations to spend unlimited amounts on political campaigns granted by the Supreme Court ruling in the Citizens United case, said he remains concerned about the ability of casino backers to influence local officials and local elections where casinos are proposed.

He said the new ability of corporations to spend unlimited amounts to influence local elections could play out even in local development controversies. For example, a developer may advertise against the election of a local planning board member who may not favor a particular development they want to build.