Crosby: Casino Resort Projects In MA Serving As Economic Catalysts For Host Communities

MA Gaming Chairman: Casino Host Communities Already Benefiting Economically From State’s Development Strategy

pringfield Massachusetts Economic Benefits From Casino
In a recent Boston Globe op-ed, Massachusetts Gaming Commission (MGC) Chairman Stephen Crosby was happy to report that the vision Massachusetts lawmakers laid out when they legalized casino gambling in 2011 is coming to fruition.

In the op-ed Crosby states:

Our casino legislation proposed an audacious strategy: a clarion call for additional amenities in the gaming establishment; criteria for integration with other economic drivers in the region; a very high minimum capital investment requirement (assuring large construction projects and quality facilities); and a mid-range tax rate (25 percent of gross gaming revenue), to hopefully provide the economic and policy tools to support broad-based economic development.

In Crosby’s estimation, “The Commission’s recent visit to Springfield demonstrated that the commitment to this strategy is working.”

The strategy is an interesting one, and it will likely be copied by other states wherever possible.

The Massachusetts model proving its worth

Last year, I wrote a column praising the way Massachusetts is blazing its own gambling path, and seeing positive results from its careful approach to regulations.

As one of the most recent states to legalize casino gambling, Massachusetts was able to look at what other states had done and incorporate the positives while eliminating or tweaking what didn’t work, or led to unintended consequences.

While casino supporters were touting all the jobs and revenue the industry would bring, Massachusetts lawmakers recognized that casinos aren’t all puppy dogs and rainbows.

Naysayers like to conjure up ominous images of crime, traffic, and blight. And even though they’re hyperbolic, they can become a reality if the proper precautions aren’t taken.

In Massachusetts, gaming wasn’t seen as a quick fix to boost revenue and job numbers. The state decided early on it wanted gaming to be the proverbial tide that lifts all boats, and any adverse effects needed to be minimized.

On this front, Massachusetts is teaching other states an important lesson on how casino development should be tackled: with caution, care, and an eye toward the future.

As Crosby said in his op-ed, “Rather than simply promoting jobs and revenue, the casino legislation in Massachusetts prescribed ‘destination resort casinos,’ designed to also produce broad-based economic development.”

The state is starting to see sprouts from the seeds it planted when it made sure the casinos and host towns were committed toward a common goal.

Fully committed and working together

Massachusetts certainly required a high minimum capital investment for casinos, but it also fostered competition through its licensing process that limited growth to a single casino in each of the three established regions.

If a company wanted one of the coveted Massachusetts casino licenses, its project would have to outshine the other proposals.

Very early in the process it became quite evident that the minimum capital investment established by the state wasn’t going to get it done, as projects quickly crept toward a billion dollars or more.

MGM Springfield will come in at a final cost of approximately $1 billion, and Wynn Boston Harbor will eclipse $2 billion.

But this initial investment has its benefits, as it grants the licensee exclusive rights in the area. So, by limiting licenses, the state gave the casinos peace of mind that they could make this type of investment without having to worry about competition opening up down the road.

At the 2016 summer session of the National Council of Legislators From Gaming States (NCLGS), Wynn Resorts’ Robert DeSalvio said there was no way Wynn Entertainment would have made a $2 billion investment in Massachusetts without regional exclusivity.

Furthermore, to invest 10 figures the casinos needed to know that the host communities were going to be willing partners. This was solved by holding local referendum votes on casino gambling and coming up with payments to the host and surrounding communities.

Jay Snowden of Penn National, which operates Plainridge Park Casino in Plainville, summed it up during a luncheon keynote at NCLGS 2016: If states want casinos to invest, the best thing they can do is eliminate as much uncertainty as possible.

Exclusive rights and a strong partnership between the casino and the local community did just that, but the state wanted more.

Don’t focus entirely on gambling

In his op-ed, Crosby also noted Massachusetts isn’t necessarily focused on slot revenue and gambling.

MGM and Wynn aren’t simply building casinos in Massachusetts; they’re building entertainment complexes. This is by design.

This is par for the course from Steve Wynn, whose casinos routinely generate more revenue from non-gaming amenities than from gaming. But it’s a departure for most casino operators.

Crosby’s op-ed noted the mid-range 25 percent tax, high capital investments, and innovative gaming regulations to minimize the adverse social aspects of gambling were calculated risks designed to push casinos beyond gambling.

In doing so, they would revitalize interest in the area, and not just attract patrons to the casino itself.

Can’t argue with the results

“The MGM plan promises a comprehensive mixed-use development project, which includes not only a casino, a four-star hotel, and restaurants, but also extensive retail, a movie theater, a bowling alley, an outdoor ice skating rink, a seasonal public market, and 54 units of market-rate housing,” Crosby said in the op-ed.

The MGC chairman also noted economic development-related investments in Springfield were up 16.4 percent since December 2014.

Everett, the site of the Wynn Boston Harbor project, is also seeing an uptick in investment. Crosby cited the comments of Everett Mayor Carlo DeMaria from an MGC meeting:

As we all know, the Wynn Resort is at the center of Everett’s environmental and economic revitalization. Everett was recently named one of the top 10 places to live in the Commonwealth. Our commercial and residential property values are on the rise, and our waterfront is being restored as a wonderful natural resource and recreational asset for our residents. With a new harbor walk, we realize a once-in-a-lifetime opportunity to open a waterfront that’s been fenced off for more than a century and then invite all our residents and neighbors and guests to enjoy it for generations to come.

Crosby ended his op-ed by rhetorically asking, “Can a destination resort casino serve as a major economic catalyst for the rejuvenation of small post-industrial cities?”

From his perspective the answer is “yes.”

“The Legislature believed that it could, and the Gaming Commission is cautiously pleased to say that it is looking more and more like they were right.”

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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.