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Senate Passes Casino Bill Focusing on Job Creation and New Revenues for the State

July 1, 2010

The Senate on Thursday with a 25-15 vote passed gaming legislation authorizing three resort casinos in separate geographic locations of the state that could generate more than $350 million annually for the Commonwealth, 15,000 full-time permanent jobs and up to 9,000 immediate construction jobs.

An independent study commissioned by the Senate also indicates the Senate plan would bring additional revenues for the Commonwealth, more than $250 million annually, from onsite hotels and the full-spectrum of attractions associated with destination resort-style casinos.

The bill sets casino-funded requirements for community mitigation, addiction services and local aid stabilization, and establishes a law enforcement and regulatory structure to ensure thorough and vigorous oversight of the gaming industry.

“Casino gambling will be a significant change for Massachusetts, and we took the right approach to ensure public analysis and input over the past year and to allow impassioned debate in the Senate,” Senate President Therese Murray (D-Plymouth) said. “I believe we have produced a bill that takes into consideration the Commonwealth’s reputation as a cultural destination and a place where tourism thrives and where tourism continues to be a big part of our allure and our economy.

“We have produced a bill that is responsible to the public and will do what’s best for our overall economic interests, creating short-term construction jobs and permanent long-term jobs,” Murray continued. “With the development and commitment to robust, profitable resort casinos that offer a wide range of services and attractions, we will help our economy grow and capture significant revenues for the Commonwealth currently being lost to other states.”

“With this legislation, we have the potential to create thousands of jobs for working families, including both short-term and long-term construction jobs and up to 15,000 permanent jobs,” said Senator Karen Spilka (D-Ashland), the Senate Chair of the Joint Committee on Economic Development and Emerging Technologies. “This bill creates strong provisions for community mitigation, including local advisory councils and upfront impact fees.

“It also takes an aggressive approach to problem-gambling, requiring a baseline study for the treatment of addiction before casinos even enter the state and ongoing research on the impact of casinos on both individuals and the Commonwealth,” Spilka continued. “Further, to ensure that we support all of the economic development activities in the state, this bill dedicates more than $130 million to an economic development fund that will fund our existing programs and invest in initiatives, such as STEM education, that will prepare our workforce for the future.”

“I want to thank my colleagues for their spirited debate,” Senator Stanley Rosenberg (D-Amherst) said. “We now have a strong proposal that will maximize job creation, help capture revenues lost to other states, and create mechanisms to address potential impacts. When Senate President Murray appointed me as the Senate’s neutral point-person on gaming three years ago, I vowed that I would seek to find the best result for Massachusetts regarding whether to allow casinos within our borders. I truly believe this bill meets that goal.”

The three resort casino licenses established under the bill are distributed among county-drawn regions – East, Southeast and West. The East region includes Suffolk, Middlesex, Essex and Worcester counties. The Southeast region includes Norfolk, Plymouth, Bristol, Dukes and Nantucket counties. The West region includes Hampden, Hampshire, Berkshire and Franklin counties.  A provision proposed by Senator Spilka that was accepted in the bill would prevent casinos from being located within a 40 mile radius of one another, thereby spreading the revenue generation and job creation throughout the state.

In addition to projected annual revenues, a one-time, up-front licensing fee of $75 million applies to all three regions for a total collection of $225 million for the state. Those funds would be distributed as follows: $105 million to the state’s Stabilization Fund; $85 million for local aid; $20 million for start-up costs; and $15 million for community mitigation.

The bill does not designate any licenses for racetracks or former racetracks, though any qualified bidder may apply. There will be an open, competitive and transparent bidding process for all applicants of all three licenses. An applicant must show financial viability through a rigorous disclosure process and execute an agreement with the prospective host community and the impacted surrounding communities that includes a local impact fee and a referendum vote by the host community. 

The legislation sets a 25 percent daily tax rate on gross gaming revenues to generate the estimated $350 million annually from gambling activities. Thirty percent of those revenues would go toward Commonwealth debt reduction; another 30 percent to the Gaming Economic Development Fund for statewide economic development programs; 30 percent to the state Lottery and Gaming Fund to protect Lottery aid and supplement unrestricted local aid; and 10 percent to the Gaming Mitigation Fund for social, community, cultural and racetrack relief.

The bill’s Gaming Control Board would be responsible for administering mitigation funds from initial licensing fees and gross gaming revenues. The Board consists of three full-time members appointed by the Governor for four-year terms. Additional responsibilities include drafting proposed regulations, reviewing license applications, performing casino and financial audits to ensure compliance with applicable laws, approving gambling machines, and monitoring daily gross gaming revenues.

The bill strengthens law enforcement efforts, creating a special unit within the Attorney General’s Office with dedicated state police resources to for the investigation and prosecution of gaming-related crimes.

The legislation also puts in place a focused regulatory structure containing significant new laws for money laundering and enterprise crime, as well as changing the wiretap laws to specifically include authority where gaming crimes are suspected.

Crimes of money laundering – those financial transactions resulting from criminal activity related to gambling – would be punishable by up to six years in prison or a fine up to $250,000 (or twice the value of the property transacted), or both. Subsequent offenses are punishable by up to 8 years in prison or a fine up to $500,000 (or three times the transaction value), or both.

Enterprise crime – or cooperative, organized criminal ventures related to gambling – would be punishable by up to 15 years in prison or a fine up to $25,000, or both. Those crimes include prostitution, child exploitation, and the manufacturing and distribution of narcotics.

The bill also adds new crimes of licensure violations, making false statements to the gaming board, underage gaming, and possession or use of a cheating or swindling devices.

Finally, the legislation defines state and local jurisdictions. Massachusetts State Police would be the primary enforcer inside a casino and share jurisdiction with the host community’s local police on other matters according to arrangements worked out in a memorandum of understanding facilitated by the gaming board. Those matters would include things such as police details and use of local police at casinos; 9-1-1 calls and emergency response; and internal investigations.

During the eight days of public debate in the Senate, the bill was amended to include a smoking ban in all casinos; a two-year extension on simulcasting at the state’s racetracks; local ward approval for cities larger than 125,000 population; property tax relief for senior citizens; and the removal of a land restriction in Fall River to allow construction of a casino.

The Senate legislation will now go to a conference committee where differences will be worked out with a bill passed by the House of Representatives.

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