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March 7, 2008

New report backs Mass. governor's casino estimates

BOSTON -- A study by the Greater Boston Chamber of Commerce supports many of the economic assumptions outlined by Gov. Deval Patrick in his proposal to build three resort-style casinos in Massachusetts.

In the report, the chamber said that by 2012, the casinos would generate up to $2.3 billion in gross revenues per year, leaving the state with up to $429 million in tax revenue.

The casinos also would create up to 21,000 permanent jobs and up to 11,500 construction jobs.

Patrick has been lambasted this week by House Speaker Salvatore DiMasi for apparently overestimating the number of construction jobs at 30,000, but the study bolsters his projections of 20,000 permanent jobs and $400 million in annual state revenue.

-- The Associated Press


The $80,000, 129-page report released yesterday also suggests Patrick was conservative when he proposed a minimum licensing fee of $200 million for each casino. In 2004, Illinois received a $518 million bid for a casino license.

While the survey is largely silent on social costs, citing wide fluctuations in research and circumstance, it said, "In no instance did a study find a reduction in problem gambling, crime or personal bankruptcy rates following the introduction of casino gambling."

Chamber leaders said they were taking no official position on Patrick's proposal now, but wanted to fill a void with a neutral analysis.

"We thought the chamber's role was to illuminate the debate with the most objective study that we could fund and generate," said Chamber Chairman Ralph C. Martin II, the former Suffolk County district attorney.

Chamber President Paul Guzzi said in his many conversations with business leaders, "what I'm hearing is that it would be helpful to have data and analysis to make decisions."

Martin added: "People in the business community are essentially agnostic on the issue of gambling, but very gung-ho on legitimate ways to generate revenue for the commonwealth and also to generate jobs. And if this turns out to be a net-positive, people will be receptive to it."

A casino opposition group, Casino Free Massachusetts, said other chambers of commerce, such as that for the South Shore, have concluded adding casino gambling will not boost economic development.

"This appears to be another rosy outlook of casino development in a report that relies heavily on numbers provided by the gambling industry and its cheerleaders," the group said in a statement. "All these promises of jobs gained ignore the issue of jobs lost. Casinos do not hire the unemployed, the untrained and inexperienced. They hire retail workers, office support staffs, teachers, secretaries, hotel workers, bartenders and restaurant personnel, which results in huge labor gaps in those employment sectors."

The report was written by UHY Advisors FLVS Inc., which uses accountants and other analysts for consulting, forensic accounting and risk management services.

While the company is not aligned with any party in the casino debate, company officials conceded that up to 10 of the 200 studies they examined for their report were written by casino operators.

The bulk of the studies, including most of the 50 cited in the report, were conducted by academics, the officials said.

Patrick, making a monthly appearance on WTKK-FM talk radio Wednesday, said he considered the report "generally good news" and hoped for a fair hearing when his proposal is heard before the Joint Committee on Economic Development on March 18.

The governor said he thinks Rep. Daniel Bosley, D-North Adams, an opponent who is co-chairman of the committee, "has prejudged this," a criticism he also leveled earlier in the week against DiMasi.

DiMasi referred comment to Bosley, who sent House members an e-mail Thursday disputing Patrick's argument that casino gambling is inevitable, either through the commercial licenses he proposes or on Indian lands being sought by the Mashpee Wampanoag Tribal Council.

The e-mail noted that the federal government must still approve property for the site, as well as gambling on it, before the tribe negotiates a compact with the state. At that time, Bosley said, the state could block the slot machines popular at similar casinos, since they are already illegal in Massachusetts.

"Since slot machines make up 70-80 percent of a casino's gambling revenue, it is highly questionable whether casino developers would be interested in investing in a casino that does not have slot machines," Bosley wrote.

Patrick has taken to communicating directly with House members - first in a letter and then with a brochure - as he tries to have them focus on facts rather than any perceived threat from breaking ranks with their chamber leader. He reiterated that point on the radio.

"There's got to be a way for the leadership and I to differ on a point of view without the vote being some sign of personal allegiance or disaffection," the governor said.

Posted by Jack Perry  at 8:56 AM | Permalink

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