Cape and Islands towns could lose a combined $1 million in local aid per year if three casinos and a slot parlor attract customers away from the state lottery at the rate projected by a state legislator, an analysis by a group looking to repeal the casino law concluded.
The report released Wednesday by Repeal the Casino Deal projects Barnstable would lose between $171,000 and $205,000 in local aid, about 11 percent of its total, for fiscal 2015. Other towns losing six figures would include Bourne, Falmouth, Sandwich and Yarmouth, according to the report.
The projected loss statewide is $103 million.
The numbers are based on a 2008 study done by state Rep. Thomas Conroy, D-Wayland, a casino critic who ran unsuccessfully for state treasurer. Based on Conroy's research, the repeal effort projects casinos would eat away 21.9 percent of state lottery sales if they open in the Bay State.
Gamblers who would typically purchase lottery tickets would instead spend their money at casinos, the report says.
Jon Carlisle, a spokesman for state Treasurer Steven Grossman, said the effect of casino gambling on the lottery remains an unknown.
"It will likely have an impact, but no one knows what it will be," Carlisle said in an email.
The Expanded Gaming Act provided for slot parlors to be taxed at 49 percent of gross gambling revenues, with 40 percent of that money going to local aid. For the state's three casinos taxed at 25 percent, 20 percent is earmarked for local aid.
"This was done to ensure that the local aid presently funded by the lottery is not impacted," Carlisle said.
A report prepared by Spectrum Gaming, a casino consultant hired by the state in 2008, concluded lottery sales would be affected in the short term near casinos, but "long term our view is the lottery will not be significantly affected." The report pointed to "cross-marketing plans" as a way to protect lottery revenue.
That money won't make up for the lottery shortfall, John Ribeiro, chairman of the repeal effort, said.
"When you're talking about local aid, that's money being spent on firefighters, police officers, teachers and roads," Ribeiro said. "This shows a direct hit to every single city and town, no matter how far away you are from casino site."
Wooten Johnson, campaign manager for the Coalition to Project Mass Jobs, did not respond to an email seeking comment.
On the coalition's website, casino supporters argue gross gambling revenues will add to the money available for local aid, but no specific amounts are projected.
The American Gaming Association issued a statement saying casinos contribute $38 billion in federal, state and local taxes nationwide that pay for public services. "It's clear that critics' 'sky-is-falling' scare tactics fall flat in the face of facts," the association said.
The analysis by repeal organizers comes less than a month before the Nov. 4 election where Massachusetts voters will decide whether to repeal the law that licenses three casinos and one slot parlor. It also comes as the repeal effort is facing an uphill battle, both in campaign fundraising and in polls that show a majority of voters support keeping the casino law in place. State campaign finance records show casino supporters have raised six times as much cash as those working to repeal the law, with Penn National Gaming and MGM Springfield providing the bulk of the $3 million.
Ribeiro is undeterred, saying the odds were stacked against casino opponents in local referendums in places like Palmer and East Boston as well. "We've shocked the world before and we're prepared to do it again," he said. "Our voters are a lot more motivated than the no voters."
The Repeal the Casino Deal analysis assumes the Mashpee Wampanoag Tribe will win federal approval to open a Taunton casino. Under a compact negotiated between the tribe and Gov. Deval Patrick, approved by the federal Bureau of Indian Affairs, the tribe would pay 17 percent of its gross gambling revenues to the state instead of the 25 percent that commercial casinos are required to pay.
The Massachusetts Gaming Commission is seeking casino applicants for Southeastern Massachusetts, known as Region C, through Dec. 1. If a commercial casino is licensed, the projected losses would decrease.
David Guarino, a spokesman for the repeal effort, said the analysis used the gross gambling revenues projected by the gaming commission. Even using the rosiest projections, the losses to cities and towns are great, he said.
"This is a conservative analysis," Guarino said.
Follow George Brennan on Twitter: @gpb227.
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