To SELL Predatory Gambling to an unsuspecting electorate, EXPERTS overstated revenue projections that were easily disproved.
There are no consequences to the foolhardy, but there are for lawmakers who follow the same Yellow Brick Road.
Gaming projections can't be taken seriously
It would nice if the rosy tax revenue projections from the state's budding casino empire come true, but we're expressing caution.
Don't spend what you don't have.
But Gaming Commission Chairman Steve Crosby already is greasing the way for the tax-and-spenders on Beacon Hill to expand the budget belt buckle a few notches.
Crosby told the State House News Service that once the resort casinos in Springfield and Everett are opened, Massachusetts can anticipate $300 million in annual gaming revenue. His estimated breakdown follows:
n $100 million from the MGM casino in Springfield;
n $100 million from the Wynn Boston Harbor casino in Everett;
n $80 million from the slots parlor at Plainridge Park in Plainville.
Sounds all well and good -- if it happens.
We're not sure how Crosby arrived at his figures, but his expert analysis hasn't proved correct at the slots parlor.
In more than a year since it opened, Plainridge Park has yielded the state $68 million in tax revenue -- a far cry from the original annual projection of $83 million. At present, the slots parlor has a monopoly, but when the competition of two full-blown casinos arrives, it's going to be a tough slog for Plainville to increase its take -- and yet Crosby's estimating an $80 million tax haul.
Also at play is the impact of the Mashpee Wampanoag tribe's First Light casino in Taunton, a 30-minute drive from Plainville.
The first phase of the $1 billion project is expected to open next summer, although federal litigation over a land dispute could cause a delay.
Then there's Twin River Casino in Lincoln, R.I., which is but 20 minutes away from Plainville.
The competition is heating up both inside and outside the Bay State.
Massachusetts gaming law directs nearly all of the tax revenue derived from the casinos and slots parlor to local aid for cities and towns. That's a good thing. So even if Crosby's estimates don't turn out exactly as promised, the resulting yield will be a much-needed boost to municipalities.
But casino-gaming revenues -- just like capital-stock gains -- can't be counted on to deliver the same or higher returns from year to year. A Center for Gaming Research study (2001-2015) at the University of Nevada Las Vegas shows that gaming revenues in 23 states closely mirrored the ebbs and flows of the U.S. economy. And the growth is minimal at best. (In 15 years, total U.S. gaming revenue has grown from $35 billion to $40 billion annually -- a modest 14 percent increase largely attributed to the growing number of casinos.)
Massachusetts continues to run an annual "structural" deficit, now pegged at $240 million but more likely it's $350 million because of health-care premium increases that the Legislature left on the table.
The $39.1 billion budget is built on a Hail Mary pass that tax revenues will materialize down the road. A more realistic scenario is that Gov. Charlie Baker will be forced to make 9C emergency spending cuts during 2017 to balance the budget.
It's all comes down to a simple equation: the state shouldn't spend more than it takes in.
Likewise, it shouldn't count on gaming-tax revenues until the greenbacks are counted in the state treasury.