EagleTribune.com, North Andover, MA

February 22, 2011

Answering questions about his push for casinos

By Shawn Regan
sregan@eagletribune.com

BOSTON — State Rep. Brian Dempsey, coauthor of the House proposal for resort casinos and slot machine parlors at racetracks, is considered one of the driving forces for legalizing casino gambling in Massachusetts.

The Haverhill Democrat answered The Eagle-Tribune's questions about his casino gambling proposal.

Q. The House leadership is pitching gambling as a solution to the state's annual revenue shortfalls. Yet those states with the largest casino gambling operations — Nevada, California, Connecticut, New Jersey and Illinois — are projecting huge budget deficits next fiscal year. How would gambling help solve Massachusetts' problems when it clearly has not helped those states?

A. Casinos are not a panacea or the complete solution, but they can be a piece of an overall economic stimulus. The three-casino plan will generate close to $2 billion in capital investments and more than 10,000 jobs. A clear benefit is casinos don't require the kind of tax breaks and state subsidies that have been given to manufacturing and emerging industries. If you look at other industries like life sciences and biotech manufacturing, we have given them tax breaks and other incentives to attract and keep them here. But we don't have to make a financial commitment to casinos like we do for other industries. It can be another sector in Massachusetts and we know there's a strong market for it here because we're losing in excess of $1 billion a year to casinos in Rhode Island and Connecticut.

Q. Why are you and the House speaker so insistent that slot machines at racetracks be included in the expanded gaming bill?

A. We want to help existing racetracks that are struggling and where there is already existing infrastructure around an existing gaming venue. When Maryland considered an open bidding process, owners of shopping malls and people who owned large pieces of land applied. But we don't want slot parlors popping up around the state in places were gaming would be new to the area.

Q. Let's assume that Massachusetts passes gambling, some casinos are built, and new licensing and tax revenues flow into state coffers. What will you do with that extra money?

A. The plan is to put all one-time revenue from licenses — about $250 million — into the state's rainy day fund. We're going to bank that money to replenish our reserves, which are down to about $560 million, and improve our bond rating. Casinos are projected to generate between $300 million and $500 million annually in tax revenue. We intend to split that between local aid, education aid and the rainy day fund.

Q. In states with casinos, revenue from them, and therefore state tax receipts from them, have plummeted during the recession. Aren't you essentially recreating the problems of the capital gains tax, which generates piles of money during boom times but evaporates during busts? How does that help the state's fiscal stability?

A. It's true we have had problems with capital gains receipts being down and those numbers did get baked into the budget during better economic times. But we've learned from that and last year we passed legislation that everything over $1 billion on capital gains tax revenue goes into reserves. ... We're going to do the same thing with tax revenue from casinos.

Q. Since Gov. Deval Patrick vetoed last session's casino gambling proposal over his opposition to slot machines at racetracks, what makes you think he's going to change his mind?

A. New talks with the governor haven't taken place yet this legislative session, but we believe he may have a new position on slots at racetracks given the economy and the jobs picture. We think the promise of much-needed jobs will lead to the governor revisiting this and perhaps having a willingness to compromise to get something done.

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