Expanded Gaming Becomes Law in MA

Gov. Deval Patrick signed the bill Nov. 22, which contains industry subsidies.

By Lynne Snierson

Expanded gambling became legal in Massachusetts Nov. 22, when Gov. Deval Patrick signed the bill to authorize three destination resort casinos and one slots facility, which will all be competitively bid with no guarantees for racetracks. Nonetheless, the law provides subsidies that will benefit directly the state’s struggling horse racing industry.

Horse racing interests are set to receive 9% of the revenue from the slots facility, 5% of the projected $280 million licensing fees for all four gaming facilities, and 2.5% of the state's 25% share of the gross gaming revenue from the three resort casinos. A five-member gaming commission to be chosen with input from the state’s attorney general and treasurer will oversee the new industry.

“Expanded gaming in Massachusetts, for me, is about creating jobs,” Patrick said before signing the bill. “I am pleased to sign this bill today and proud of the work my team and the legislators have done to bring it to this point.”

Speaker of the House Robert DeLeo, who represents the district where Suffolk Downs is located and is the son of a late-long time worker at the track, was instrumental in passage of the legislation. Suffolk Downs, which has partnered with Caesar’s Entertainment and intends to seek the casino license designated for the Boston region, is viewed as the prohibitive favorite to win that bid.

While appearing on Boston talk radio station WTKK before signing the bill on the morning of Nov. 22, the governor took umbrage when host Jim Braude intimated the gambling bill’s multi-million dollar subsidy for the horse racing industry was an “entry fee” required by DeLeo.

“I think that’s unfair,” Patrick said. “A lot of the breeders, a lot of the horse farms are right here in Massachusetts. We’ve got other things in this bill that are about other protected industries if you will, like the requirement that cultural venues like the Hanover Theater in Worcester will get a portion of the proceeds and some rules about the size of the entertainment venues at casinos in order to protect their markets. People can quarrel about whether it was done with the right precision.”

The bill also extends the minimum number of days required for live racing once gaming becomes operational. Suffolk, which now conducts a meet of 80 days, would race at least 105 days in the first calendar year of operation, 115 the next year, and 125 days the following year. The live racing dates and requirements will be subject to review by the new gaming commission.

Resort casino licenses each carry a fee of $85 million and the successful bidders are required to invest at least $500 million in their facilities. The single, competitively bid slots-only parlor operator will have to pay a $25 million licensing fee and invest a minimum $125 million. While the casinos are designated for three separate regions of the state, the slots facility can be located anywhere.

It is estimated the licensing process will take at least one year and it will be another year before the slots parlor is operational, and then another two years at a minimum before the resort casinos open their doors.