THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Pattern shows first casinos are rarely last

Most states allow gambling to expand

By Casey Ross
Globe Staff / June 28, 2010

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Lawmakers poised to approve the first casinos in Massachusetts promise to control the spread of gaming, but pressure to expand has led to growth in slot machines, video gaming terminals, and new casinos in nearly every state that has legalized gambling in the last 20 years.

Illinois legislators, who first authorized gambling in riverboat casinos in 1990, last year approved 50,000 video poker stations at bars across the state; Michigan, which had just two casinos in 2000, has 23 today; and in Pennsylvania, which has nine gambling halls, lawmakers are proposing to help close next year’s $1.6 billion budget gap by allowing betting games in taverns.

“Once you get the breakthrough of legalization, there is always a push for expansion, and states almost never pull back,’’ said Nelson Rose, a professor at Whittier Law School in California who tracks the gambling industry. “It always happens one way or another.’’

Expansion can dramatically expand access to gambling and dilute the market, cutting revenue at large casinos and increasing the costs of addiction, crime, and government regulation, critics said.

Even gambling supporters in Massachusetts agree the trend is worrisome. The state Senate is pushing for three resort casinos, while House lawmakers passed a bill authorizing two casinos and slot machines at the state’s racetracks. The different versions have to be reconciled and approved by Governor Deval Patrick, a casino supporter, for a casino bill to become law.

But limiting the number of gambling facilities could be difficult. The state’s two federally recognized Indian tribes are already asserting their rights to build on sovereign land whether or not they get a state license. And future legislatures could approve more commercial gaming operations, as has been the case in other states.

State Senator Stanley C. Rosenberg, an Amherst Democrat and one of the principal authors of the Senate legislation, said he initially sought to include a provision in the bill that would require a super-majority vote of the Legislature to expand the number of gambling facilities. But, he said, that provision turned out to be unconstitutional.

“This is a real issue, and we’re trying to find a solution,’’ Rosenberg said. “All I can say is, first things first: Get the bill signed into law and set up a regulatory agency. It will be 18 to 19 months before licenses get issued, and during that period of time we need to find a resolution to this.’’

Rosenberg said the Senate bill attempts to stifle the urge to expand gambling by preventing the use of gaming tax revenues to fund annual state services. Instead, the bill requires a large portion of revenues from gaming be used to pay off debt or augment state assistance to communities.

“We’re not baking the money into the base of the operating budget, so that when we go into down cycles, we won’t suddenly be under stress,’’ Rosenberg said.

But senators opposed to gambling said colleagues are sending mixed signals with regard to potential expansion at the state’s racetracks. On the one hand, the Senate has rejected requests for slot machines from track owners, who say the extra revenue is necessary for survival; but on the other hand, the Senate has continued to extend simulcasting rights that could sustain the tracks so they can renew their appeals next year.

“It just keeps that debate going,’’ said state Senator James B. Eldridge, a Democrat from Acton and a vocal opponent of gaming expansion. “I’ve been a legislator for eight years, and for six of those years I’ve voted on slots at the tracks or so-called destination casinos. It’s not going to stop.’’

In other states, the urge to authorize more taxable slot machines or video terminals has fueled an explosion of gambling facilities. The number of casinos nationwide has increased to 899 last year, from 610 in 1999. States have also authorized more than 11,000 electronic or video betting terminals during the same period, according to the American Gaming Association, an industry group that represents commercial casino operators.

In some cases, expansion has created significant regulatory costs and complications. In Illinois, for example, the authorization of 50,000 video poker stations left the state’s gaming authority with the enormous task of trying to regulate hundreds of taverns where the machines would be installed. Meanwhile, dozens of Illinois municipalities have passed local ordinances to keep the video terminals out of their communities.

Despite the confusion, Illinois’s Legislature this month authorized further expansion by allowing video gaming machines at truck stops, hoping to raise money to fill a projected $13 billion budget gap.

New Jersey and Nevada also face some of the largest budget deficits in the country.

“The efforts to expand gambling never stop, because it starts to dictate economic policy,’’ said John Kindt, a University of Illinois professor who has been critical of the industry’s growth. “I would hope that Massachusetts, as the birthplace of American freedom, will be a leader in economic freedom and not be beguiled and seduced by this.’’

But gambling supporters said those arguments are overly political and ignore the benefits of expanding the industry. Rosenberg said refusal to license casinos in Massachusetts would mean forsaking more than $1 billion that now goes to casinos and slot parlors in Rhode Island and Connecticut.

Connecticut has been more effective than most states in restricting the expansion of its gaming industry, with Foxwoods and Mohegan Sun remaining the only gambling facilities in that state. However, both casinos expanded dramatically in recent years.

The Massachusetts Senate bill seeks to establish a framework for gambling similar to Connecticut’s, placing a limit on the number of casinos, but not the number of slot machines or table games, allowing facilities to grow as the market allows.

Rosenberg said the primary threat of too much expansion lies with the state’s two Wampanoag Indian tribes, both of which are vying to open gambling complexes in Fall River. The Senate removed from its legislation a provision that would have reserved a license for a tribal casino, preferring to allow a gaming authority to decide that matter.

“What we want is for the tribes to negotiate a contract with the governor and submit that as part of their application for a license,’’ Rosenberg said, “so the [gaming board] can plan the market and make those decisions.’’

Casey Ross can be reached at cross@globe.com.

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