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TAKING THE GAMBLE IN MASSACHUSETTS

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TAKING THE GAMBLE IN MASSACHUSETTS

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    1. TAKING THE GAMBLE IN MASSACHUSETTS?

    2. THE U.S. CASINO INDUSTRY

    3. NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM (NAICS) The North American Industrial Classification System (NAICS) is the statistical classification standard underlying all establishment-based economic statistics in the US, Canada, & Mexico NAICS classifies business establishments into twenty different Sectors and assigns each business establishment in North America a six-digit classification code.

    4. NAICS MAJOR SECTOR CODE 71 Sector 71. Arts, Entertainment, & Recreation: Subsector 711. Performing Arts, Spectator Sports, and Related Industries Subsector 712. Museums, Historical Sites, & Similar Institutions Subsector 713. Amusement, Gambling, & Recreation Industries Definition: The Arts, Entertainment, and Recreation Sector includes a wide range of establishments that operate facilities or provide services to meet varied cultural, entertainment, and recreational interests of their patrons.

    5. THE U.S. CASINO INDUSTRY

    6. COMMERCIAL CASINOS In 2005, the U.S. commercial casino sector: Earned $30.29 billion in gross gaming revenue Employed 355,467 people Paid wages of $ 12.6 billion Contributed $ 4.6 billion in direct gaming taxes to states Avg. effective tax rate of 15.1% (including NV & NJ) and 25.6% (non-traditional jurisdictions)

    8. RACETRACK CASINOS In 2005, the U.S. Racino sector: Earned $3.1 billion in gross gaming revenue Employed 17,122 people Contributed $ 2.0 billion in direct gaming taxes to states Avg. effective tax rate of 64.7%

    10. NATIVE AMERICAN CASINOS (2005)

    11. SUMMARY (2005)

    12. CASINO GAMBLING IN NEW ENGLAND Casino gaming is a $3.6 billion industry in New England Casinos/racinos employ nearly 25,000 people in New England Casino gaming is one of the fastest growing components of New England’s leisure & hospitality sector: 2006-2008, the region’s casino, video lottery, and slot parlor facilities will make nearly $1.8 billion in new capital investments to expand their operations: $700 million expansion at Foxwoods Resort Casino, $740 million expansion at Mohegan Sun $220 million expansion at Lincoln Park, $20 million expansion at Newport Grand (possibly $1.4 billion), $140 million facility at Hollywood Slots existing facilities plan to add 4,500 new jobs over next 2 to 3 years

    14. CASINO GAMBLING IN CONNECTICUT

    16. RACINO GAMBLING IN RHODE ISLAND

    17. RACINO GAMBLING IN MAINE

    18. CASINO GAMBLING IN NEW ENGLAND: Direct Tax Revenues Casinos, VLT facilities, and racinos have become an important source of revenue in New England’s state budgets (2006): Foxwoods and Mohegan Sun generated more than $434 million in revenues to the Connecticut state treasury. Rhode Island’s VLT facilities generated more than $244 million – making its two VLT facilities the 3rd largest source of state revenue. Maine’s slot parlor generated $18 million in 2006, with monies earmarked for the city of Bangor, the “Healthy Maine” initiative, scholarships to attend Maine’s state universities and community colleges, and other initiatives to strengthen the pari-mutuel racing industry.

    19. CASINO GAMBLING IN NEW ENGLAND: Indirect Payments by MA Residents Massachusetts residents indirectly paid $220.5 million in gaming taxes to CT & RI in 2006

    20. CASINO GAMBLING IN NEW ENGLAND: Exported Social Costs CT & RI exported $71 million in gambling related social costs back to Massachusetts

    21. Where Do Massachusetts Residents Gamble? Foxwoods: 22% (976,579 persons) Mohegan Sun: 13% (567,779 persons) Lincoln Park: 3.2% (151,430 persons) Newport Grand: 1% (47,322 persons) 6.9 million visits to CT 646 K visits to RI

    23. WHO GAMBLES? Average casino slot payer is a woman age 40+, with at least some college and annual income of $25-75K, who is willing to travel 60 minutes or more for general atmosphere & physical attractiveness of facility Average table game player is a young male (under age 40) with a high income ($75K+) and a high level of educational attainment. Racino players are lower-middle to middle income ($25-75K) with mid-levels of educational attainment (HS/AD), who are interested primarily in convenience gambling (a secondary market niche for casinos).

    24. 57% of Mass residents favor a resort casino (May 9, 2006 State House News Service/Chervinsky poll) 61% of Mass residents favor a resort casino (April 9, 2007 Boston Globe/UNH poll)

    26. BENEFITS VS. COSTS

    28. SOCIAL COSTS: Lifetime Prevalence Problem & Pathological Gamblers Life-time Prevalence: MA = 2.6% US = 2.7% Past-Year Prevalence: Gambling = 1.3% Drug Dependent = 2.8% Alcohol Dependent = 7.2% NGISC, 1999; Taking the Gamble V

    29. SOCIAL COSTS: Comparable Annual Costs Problem & Pathological Gambling = $6 billion ($1,382 per year per life-time for each life-time problem/pathological gambler) Internet Abuse = $54 billion Alcohol & Drug Abuse = $81 billion Smoking = $167 billion NGISC, 1999; adjusted to 2007 dollars

    30. SOCIAL COSTS: Problem & Pathological Gamblers Gambling = $170 million per year in social costs for MA 58% of social costs attributable MA pari-mutuel and lottery gambling (locally induced) 42% of social costs ($71 million) attributable to CT/RI casinos and exported back to MA NGISC, 1999

    31. LOCAL FISCAL IMPACTS: INFRASTRUCTURE & OPERATIONS Negotiate Development Impact Agreements Highway, road, signal, and ramp improvements Water & Sewer capacity (supply, delivery, & treatment) Storm water drainage Police & Fire protection (capital equipment & water pressure) Landscaping, curbs, & sidewalks Property Taxes Percent of Gross Gaming Revenues

    32. 7 MYTHS OF CASINO GAMING

    33. Myth 1 CASINOS PREY ON THE POOR & UNEDUCATED

    35. We believe that gaming will greatly compoud the problems of those who can least afford it....we believe that the gambling industry depends on vulnerable people being sucked into the illusion that they can get rich quickly. -- quote in New Bedford Standard-Times, Feb. 18, 2007

    38. CASINOS CANNIBALIZE LOCAL HOSPITALITY BUSINESSES Atlantic City had 311 bars, restaurants and taverns in 1977. Today there are fewer than 50 outside the casino complexes. -- quote from Sunday Standard-Times, New Bedford, MA, February 11, 2007

    42. LAW ENFORCEMENT COSTS WILL SKYROCKET

    49. MA CANNOT RECAPTURE (PA & UPGRADES TO A.C.) ...it is my feeling that the Commonwealth will not recapture much of this (Connecticut casino) money...“ ...Upon my arrival to the casino (Joliet, Illinois), I took a look at the cars in the parking lot...I found the lot about one-half full and could find only a few out of state cars.“ -- Commonwealth of Massachusetts Committee on Government Regulation, Report on Gaming Prosposals 1997

    50. PENNSYLVANIA -- Within 2 months of Pennsylvania opening its first two racinos (Nov. 2006), Atlantic City slot revenues began to decline. Observers attribute it to PA‘s ability to recapture its own Philadelphia gambling market. -- Foxwoods‘ & Mohegan‘s 2007 Mid-Atlantic traffic has dropped by 50% from 2004 primarily due to upgrades at AC and the introduction of slots in PA & NY (racinos/casinos).

    51. CASINO WILL DEVASTATE THE STATE LOTTERY

    54. CASINO REVENUES ARE VOLATILE & UNRELIABLE

    55. CASINO REVENUES ARE VOLATILE & UNRELIABLE

    56.

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