Massachusetts Gambling Bill Reshuffles the Deck in New England

By: - August 30, 2011 12:00 am

Massachusetts leaders have ended more than a year of negotiating over proposed gambling legislation by agreeing to open three casinos and a slots parlor in the Commonwealth. Even before the plan is voted on by rank-and-file lawmakers, however, it is causing anxiety for adjoining states. 

A new report by Moody’s Investors Service confirms what many state officials in Connecticut and Rhode Island feared: The opening of four gambling venues in Massachusetts will drive business away from their own casinos. That, in turn, could hurt tax collections in both states.

Moody’s says Connecticut’s two major casinos, Foxwoods and Mohegan Sun, “face the biggest risk,” since many of their customers make the commute from Massachusetts to gamble. “We believe the addition of casino-style gaming to Massachusetts would have a profound, long-term effect on Foxwoods…and Mohegan Sun,” the report says.

Rhode Island’s Twin River slots venue also could suffer “a major blow,” according to Moody’s. The Providence Journal underscores the potential implications for the state , noting that Rhode Island “keeps roughly 61 cents out of every dollar a gambler leaves behind” at Twin River, or an expected $275 million this year alone. Rhode Island leaders already have prepared for the impact of Massachusetts gambling by approving a 2012 referendum that could add blackjack, roulette and other forms of regular casino gambling at Twin River, The Journal reports.

States have spent much of the last decade competing with one another for gambling dollars, and that, according to Moody’s, is part of the reason why new casinos can cause such consternation in states that already have them. Rather than create new business, Moody’s points out, they simply represent another slice of the same pie, particularly during an economic downturn.

“Unlike the pre-Great Recession years,” the Moody’s report concludes, “we do not believe further expansion of gambling will necessarily be accompanied by a material increase in consumer spending on gaming.”

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