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Deval Patrick's Racino Problem

Why Massachusetts pols are addicted to gambling.

Aug 16, 2010, Vol. 15, No. 45 • By CHRISTOPHER CALDWELL
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Deval Patrick's Racino Problem

Like his friend Barack Obama, Massachusetts governor Deval Patrick campaigned with dire warnings of major crisis and then, once in office, decided he felt like thinking about something else. In Obama’s case, of course, this involved leaving to one side the biggest financial crisis in history in order to pursue a national health care plan. In Patrick’s case, it meant transforming the Athens of America into the Atlantic City of New England. Elected in 2006, Patrick aimed to open up the Bay State to what he called “destination casinos.” Unlike the president, he failed. Like the president, he is discovering that the issue has become an albatross that will flap alongside him to the end of his term. 

Patrick’s plan was for Massachusetts to cover a $1.3 billion budget shortfall by selling three gambling licenses at $200 million apiece, and then taxing the take at 27 percent. The idea was popular in the abstract until voters began to educate themselves on the economics of it. When you factor in the damage to competing businesses (from restaurants to theaters to sports stadiums), the cost of infrastructure and law enforcement, and the steep toll of gambling addiction and its treatment, gambling takes much more out of an economy than it puts in—about three times as much, according to the economist Earl Grinols. 

So far, so Obama-esque. But, unlike the president, Patrick was not able to push his plan through. Sal DiMasi, then the speaker of the Massachusetts house, laid out the numbers, and the legislature killed the bill—really killed it, by a vote of 108-46.

A week ago, something strange happened. On the very last day of the legislature’s final session, DiMasi’s successor as speaker, Robert DeLeo, presented Patrick with a bill that included everything he had fought so hard for two years before—all three super-casinos. Slightly lower licensing fees would be compensated for with new tax levels of 25 and 40 percent, permitting Patrick to make the same promise (equally dubious) of $400 million a year in new revenue. Patrick had been pummeled in the polls for his love affair with casinos. They had nearly (and may yet) cost him his political career. So what did he do when his close ally and friend laid the gift in his lap? 

He refused to sign it. Patrick sent the bill back to the legislature amended (per gubernatorial prerogative) to show the kind of bill he would have signed, adding an elaborate schedule of affirmative-action set-asides for minorities, women, and the disabled, broken down in stages to apply to design and architectural jobs, construction jobs, and permanent jobs. But this was a mere good-faith gesture to his troops. The legislature has adjourned. A newly elected legislature is scheduled to come into session in January.

This was a bizarre outcome. The vote in the house was 115-36, which is veto-proof, and had the support of both Democratic and Republican leaders. The vote in the senate was 25-15, which was 2 votes away from veto-proof. A massive increase in gambling has been the main cause of Patrick’s short life in electoral politics. (He headed the Justice Department’s Civil Rights Division under Bill Clinton.) The legislature passes the massive increase in gambling by majorities so overwhelming that it doesn’t actually need the governor’s signature at all (two votes in the senate being easy enough to flip). And no new gambling at all results. 

The governor’s explanation was that the bill contained something he hadn’t asked for—“racinos.” The state has four dying racetracks. DeLeo’s father worked his whole life at one of them, Suffolk Downs, down the street from the Winthrop district he represents. (Winthrop is the pretty peninsula full of double-deckers and lace-curtain-Irish mansions that you see when your plane is taxiing at Logan airport.) DeLeo’s idea is to fill these places up with slot machines. This, he thinks, will produce “jobs.” Patrick has two objections to racinos: First, they would produce enough competition to render his beloved “destination casinos” unprofitable. And second, although he puts it rather more delicately, people who play the high-stakes table at a “destination casino” don’t get addicted and do all those horrible things you see on the news shows the way people who gamble at the Wonderland dog-track would. 

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