Massachusetts' Gambling Regulatory System Could Set An Example For Other States
Online Poker Report

The Massachusetts Model Could Become The Gold Standard For Gambling Regulation

Massachusetts gambling regulation model
Massachusetts may have been late to the casino party that’s swept across the United States during the past two decades, but now that it has arrived on the scene, the state is blazing new trails on a number of fronts.

This includes everything from the number of licenses to the application process for licensees to installing robust responsible gaming procedures that go above and beyond anything currently in place.

This new way of doing things, what I’ll call the “Massachusetts Model,” was highlighted during the recent National Council of Legislators from Gambling States (NCLGS) conference in Newton, Massachusetts.

Before I delve into what Massachusetts is doing, here’s a quick review of the situation on the ground in the Bay State.

An overview of Massachusetts casinos

Massachusetts first passed a bill legalizing casino gaming in 2011.

Following a failed referendum to repeal the law in 2014, the first casino (Plainridge Park, a racino in Plainville) opened its doors in June 2015, a full five years after the gaming expansion bill was passed.

The first full-fledged casino is scheduled to open sometime in 2017, assuming the construction of First Light Casino in Taunton remains on schedule — the casino’s hotel isn’t expected to be completed until the following year, but this is now in question following a recent court ruling. First Light is a tribal casino that will be owned and operated by the Mashpee Wampanoag tribe.

Two resort-style casinos are also under construction: the $1.3 billion MGM Springfield, which is expected to open its doors in September 2018, and the $2 billion Wynn Everett, which is slated to open in the spring of 2019.

Getting it right

As Massachusetts Gaming Commission Chairman Stephen Crosby indicated during a panel discussion at the NCLGS conference, with more than 72 percent of the state’s population visiting casinos each year, Massachusetts had been “exporting the benefits of gaming [revenue, jobs, and economic development] and importing the negative social consequences” for years.

According to the state’s analysis, a casino expansion bill would generate $250 million in tax revenue and create 8,000 jobs, so Massachusetts went to work on developing a casino bill that would import the benefits of gaming, but also mitigate the negative social repercussions.

As Mark Vander Linden, the director of research and problem gambling for the MGC, noted at NCLGS, Massachusetts’ late entry allowed it to learn from the state’s predecessors, see what did and didn’t work, and maximize the benefits of gaming while diminishing the adverse effects.

According to Vander Linden, these two things are not mutually exclusive, pointing out when adverse effects rise, the benefits of gaming tend to erode.

License zones and host community approval

To ensure the state reaped the benefits of gaming, the casino law was designed to attract the right kind of companies and the right kind of projects. On this front, Massachusetts limited licenses and required multi-layered community approval.

For interested casino corporations, the first step was to have their proposed casino approved by the local government. Next, the proposed casino project would go to the local voters as a referendum. Finally, any locally approved projects would go before the Massachusetts Gaming Commission, which was tasked with choosing the winning project for that zone through a grading system that took place at public meetings.

This corporate and investment competition, and need to win over the host community, led to the best projects being selected. The resulting casinos were built in communities with local governments committed to working with their new gaming partners and welcomed by the residents excited for the economic boost these projects are expected to bring about.

As Wynn ResortsBob DeSalvio indicated at NCLGS, without the assurance of regional exclusivity, there is no way Wynn Entertainment would have made a $2 billion investment in Massachusetts. The limiting of licenses was key to attracting committed companies willing to invest billions, rather than companies willing to invest a few hundred million in smaller-scale projects.

If there was a single obvious takeaway at the NCLGS conference it was this: The casino industry doesn’t like uncertainty.

The industry likes stable and reasonable tax rates (Massachusetts imposed a 25 percent rate on commercial casinos, a 49 percent rate on the slot revenue from Plainridge Park, and a 17 percent rate on the tribal casino), and assurances against competition popping up in the future.

As Jay Snowden of Penn National (Penn runs the Plainridge Park Casino) made clear during a luncheon keynote, if you want casinos to invest in your state, the best thing you can do is eliminate as much uncertainty as possible.

Responsible gaming pilot programs

As part of its commitment to responsible gaming, Massachusetts is conducting one of the most exhaustive and comprehensive research programs in gaming history. The state first collected baseline data prior to casinos opening their doors to see what effect gaming is having in terms of local fiscal and infrastructural impact, as well as on the following fronts:

  • Does it increase crime? And what types of crime?
  • Does it increase the rate of problem gambling in the state?
  • Is it driving out other local businesses?

With one casino open, and more coming down the road, the state continues to collect and extrapolate from the data it’s receiving, allowing Massachusetts to make tweaks if necessary. But the data has also influenced the way Massachusetts approached responsible gaming from the outset, taking what Vander Linden termed an “evidentiary and precautionary approach.”

In addition to adopting the baseline responsible gaming standards promoted by the American Gaming Association (AGA), and the best policies currently in place in the industry, Massachusetts is in a trial stage with two programs, GameSense and PlayMyWay, that the state is hoping will take responsible gaming to the next level.

Based on the early results at Plainridge (during his NCLGS presentation, Vander Linden noted that seven percent of Plainridge visitors have signed up for PlayMyWay), we can expect GameSense and PlayMyWay to be implemented at all forthcoming casinos. First Light is a possible exception, due to state regulators having less authority over tribal casinos, so I’m not sure if they would have to use these programs.

Here’s a look at these two interconnected programs.

GameSense

GameSense is the first layer of Massachusetts’ responsible gaming system. Sixteen hours a day, Plainridge Park Casino is staffed by GameSense employees specifically trained to promote responsible gaming through friendly interaction and education.

GameSense employees meet and greet visitors and offer their services, which range from simple interactions with players to walking customers through the voluntary self-exclusion process. Employees also assist with enrollment in PlayMyWay and educate patrons on the mechanics of casino games and how to bet wisely.

Think about that for a moment. In addition to dealers and floor workers who’ve gone through RG training, Massachusetts casinos have employees whose sole job is to protect the consumer.

Anecdotally, conference speakers said, players choosing self-exclusion have rated Massachusetts’ system far superior to other locales, as the GameSense employees don’t make them feel like criminals and emphasize what an important and good decision they are making.

PlayMyWay

PlayMyWay is a second layer of protection, and is what is known as a pre-commitment program. Unlike GameSense, PlayMyWay is not a personal interaction with a human. Here’s how it works.

When a player inserts his or her players’ club card into a machine to set a budget for playing, this budget can be daily, weekly, or monthly. Players enrolling in the program choose an amount they are willing to lose, and the machine gives reminders when they reach 25 percent, 50 percent, and 75 percent of their allotted budget.

When players hit their budgeted amount, the machine stops play and asks the player if they would like to continue gambling. The machine does not cut the player off, and if the player continues, the reminders persist at 125 percent, 150 percent, and so on.

Crosby explained the mechanics of the program thusly: “It’s not our job to cut them off.” Rather, PlayMyWay is designed to have players make an affirmative decision if they want to continue playing after they’ve reached their preset budget.

You may have already recognized that down the road there will be a glaring hole in this program, as PlayMyWay is a machine-based program that doesn’t track table games.

When the resort casinos open in a couple years, it will be possible for a player to budget a certain amount, say $100, play slots for a while, go to a blackjack table and win $500, and then go pump $250 into a slot machine. The program will view this as the player going way over budget without taking into consideration the table game windfall.

While the scenarios that could bring about misleading data are many, the program has been successful. As noted above, seven percent of players have registered for PlayMyWay (many with the help of GameSense employees).

And if they are repeat customers, the percentage of Plainridge visitors using PlayMyWay could be as high as 10 percent.

Final thoughts

There will certainly be some kinks along the way, and the stiff regulations and RG policies create barriers that don’t exist in other states. But in the end, Massachusetts is working toward doing precisely what Mark Vander Linden stated: maximizing the benefits of gaming and allaying its negative effects.

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Steve Ruddock
- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.