Casino bill progresses through Legislature

By a lopsided vote of 123-32, the House on Sept. 15 approved a bill that would allow the development of as many as three resort-style casinos in different regions of the state and one slot-machine-only facility.

The House-approved bill is based on an agreement announced in August between House and Senate leaders on legislation to allow casinos in Massachusetts as a way to create jobs and new revenue for the state and its cities and towns.

The Senate began its debate of a gaming bill, based largely on the House bill, on Sept. 27. A final bill is expected to reach the governor before formal legislation sessions end in mid-November.

The Legislature sent a casino bill to Gov. Deval Patrick last year, but he returned it with proposed amendments and it did not become law. The governor opposed the bill’s provision for slot machines at more than one track and the lack of an open and competitive bidding process for the slot licenses.

This year’s legislation includes changes intended to address the governor’s concerns, and he has said that key provisions of the bill are consistent with what he would support.

The bill approved by the House would permit the licensing of one resort-type casino in each of three regions of the state – central and eastern Massachusetts, the southeastern part of the state, and western Massachusetts – and a slot facility without a geographic limitation. There is a special provision that could allow the allocation of a casino license to a Native American tribe.

Under the new bill, a share of casino tax revenue would go to municipal aid and mitigation payments to cities and towns affected by the construction and operation of a casino. Casino developers would be required to address local impact concerns as part of the application and licensing process.

Casino developers would be required to invest at least $500 million in a proposed resort and pay an upfront licensing fee of at least $85 million. The minimum capital investment for the slot machine establishment would be $125 million, with a licensing fee of at least $25 million.

The state would receive 25 percent of casino revenues and 40 percent of revenues from the slot establishment, with an additional 9 percent assessment dedicated to a horse racing fund.

The bill approved by the House would direct 100 percent of the tax revenue from the slot machine facility and 20 percent of the tax revenue from resort casinos to a gaming local aid fund. Over time, an increasing share of the resort casino tax revenue would be transferred from the local aid fund to a new local aid stabilization fund, until the amount allotted to the local aid fund is reduced to 12.5 percent.

In written testimony on gaming legislation last May, the MMA reminded legislators that various studies indicate that expanded gaming would have an adverse impact on state Lottery revenues, and the MMA asked that local aid payments funded through the Lottery be protected. The MMA also asked that expanded gaming revenues be used to help fund a new and sustainable municipal aid program.

The testimony reiterated the long-time local government position that gaming legislation should provide strong mitigation measures to protect the host and neighboring communities from the impact of gaming facilities and operations on public infrastructure and municipal services, mainly public safety.

The bill approved by the House includes two categories of community mitigation. The first is mitigation through the signed agreement with the gaming establishment; the second is mitigation through a gaming commission-administered mitigation fund.

The House bill would require any applicant for a gaming license to identify the infrastructure costs that would be incurred by the host and surrounding communities as a result of the construction and operation of a gaming establishment and commit to a community mitigation plan for those communities.

Applicants would also be required to enter into a signed agreement with the host community setting forth the conditions for having a gaming establishment in that community. The bill would also require that the agreement include a community impact fee.

Each applicant would also be required to provide signed agreements with the surrounding communities, including a community impact fee for each surrounding community.

In addition, the House bill would establish a community mitigation fund, which would receive 6.5 percent of the annual gaming tax revenue from resort casino establishments to offset costs in the host and surrounding communities related to the construction and operation of a gaming establishment, including infrastructure, education and public safety services.