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Globe Editorial

Tough questions on gambling

GOVERNOR PATRICK owes Massachusetts residents more than a simple "go" or "no go" on casino gambling by his self-imposed deadline of Labor Day. If Patrick nixes the idea, the public will want to know how else he expects to generate hundreds of millions of dollars in needed revenue for the state. If the governor gives thumbs up on casinos, then he must provide substantive information on how much the state stands to gain from its share of casino revenues, how that money should be used, what the regulatory and oversight structure is likely to be, and how best to minimize any social problems, such as crime or compulsive gambling.

This is a legacy decision for Patrick. That explains why he'll be dragging his briefing reports around on vacation.

Many lawmakers, reporters, and members of the public also deserve an opportunity to review the stack of studies that will inform the governor's decision. But Patrick has turned down the Globe's formal request to release the documents under the public records law. The administration is splitting hairs by arguing that the completed studies are exempt from public disclosure as part of the governor's "deliberative process." Transparency will be essential if casino gambling is to succeed in the Commonwealth.

This is an industry, after all, that is not far removed from the days when crime syndicates routinely skimmed casino profits. Faced with his first test to make the pros and cons of casino gambling clear to the public, Patrick failed.

Who regulates it?
The issues haven't changed much since 2002, when an expert committee, which included current Public Safety Secretary Kevin Burke, outlined potential impacts of casino gambling for Acting Governor Jane Swift. The bottom line for that committee was that "the expansion of legalized gambling has the potential to provide substantial new revenues to help fund vital state and local services."

Such an outcome requires scrupulously independent and effective regulatory and oversight bodies. The Patrick administration isn't ready to discuss such details. But it is inconceivable that the governor would support lifting the state ban on slot machines or creating destination casinos in Massachusetts without giving serious thought to the structure of a state gambling commission.

Gambling commissions come in two basic sizes: a single body that oversees both licensing and enforcement, such as the one in Colorado; and the split-agency model like that in New Jersey, where the independent Casino Control Commission handles licensing and inspections while leaving matters of investigation and enforcement to the Division of Gaming Enforcement in the attorney general's office.

Regardless of whether Massachusetts opts for commercial casinos, Indian casinos, or some combination, the public would need ironclad assurance that such ventures will be on the up-and-up. The best way to ensure that is to separate the licensing and enforcement functions.

New Jersey builds in checks and balances by giving the enforcement division responsibility for conducting background checks for license applications and ferreting out violations. But it is the quasi-judicial control commission that rules on the license applications and assesses penalties. Similarly, it is the control commission's responsibility to collect the roughly $417 million derived from the state's 8 percent tax on gross revenues at the 11 casinos in Atlantic City. But it is the enforcement arm that performs an array of auditing functions and financial reviews on the state's take.

Trust shouldn't enter into it. Dan Heneghan, public information officer for the New Jersey Casino Control Commission, says the agency's inspectors are present around the clock when casino cash is being counted. Boxes with uncounted cash are fitted with two separate locks. Casino employees have one key, and the control commission holds the other. And the Gaming Enforcement division provides another level of oversight.

If the Patrick administration embraces casino gambling, it must be prepared to fend off what economists call regulatory capture -- the process by which regulators come to be dominated over time by the industries they oversee. One essential ingredient of an effective ethics code for a casino commission, says Heneghan, is a strict post-employment policy. New Jersey bars commission employees from seeking jobs at casinos for a period of two to four years. The longer, the better.

Where does the money go?
If Patrick gives the green light to casinos, he also owes the public an explanation of how the increased revenue will be used. Such knowledge is essential for public support. In New Jersey, the funds are earmarked for elderly services and the disabled. In Massachusetts, some of the most acute needs are in the areas of transportation infrastructure, the new healthcare law, and aid to cities and towns. This is likely to be an integral part of any legislative debate to legalize casinos in Massachusetts. Patrick should also address questions about the value of placing casino gambling, the Lottery, and pari-mutuel betting under one regulatory roof. There are potential savings through efficiencies. But revenues could also slide if the agencies are stripped of their incentive to compete.

Patrick has indicated that he has no deep moral qualms about casino gambling. But compulsive gambling could become a public health problem if left unaddressed. Dr. JudyAnn Bigby, the state's secretary for health and human services, has been analyzing the problem since the spring. The least the governor could provide is some specific details on ways he would prevent, minimize, and treat gambling addiction.

By ruminating so long and keeping his casino gambling studies under wraps, Patrick has whetted the public's appetite. It won't be enough for him to serve up scraps on Labor Day.