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No Outside Review Of New Mass. Casino Bill Planned

Massachusetts House leaders have opted not to commission an independent economic analysis of Speaker Robert DeLeo's proposal to build two casinos and allow 3,000 slot machines at the state's race tracks.

Instead Democratic leaders are basing their tax revenue estimates on their own projections combined with an updated version of a report that looked at an older three-casino plan.

When he unveiled the bill last week, DeLeo said the proposal to build two resort casinos and allow 750 slots at each of the four tracks would generate between $1.4 billion and $1.9 billion in added spending each year - or about $300 million to $600 million in tax revenues.

Gov. Deval Patrick has urged lawmakers to commission a new economic analysis of DeLeo's plan. Casino foes said the state has yet to conduct any review of the costs associated with expanded gaming in Massachusetts.

"They have consistently refused to take the basic steps for an independent cost-benefit analysis," said Kathleen Conley Norbut, president of United to Stop Slots in Massachusetts. "If we don't have credible data, which we don't, this should be thrown in the hopper."

The bill is set to be debated by House lawmakers next week.

To help make the case for his casinos and slots proposal, DeLeo's office last week released a new version of a report by the New Jersey-based Spectrum Gaming Group first conducted two years ago.

That report looked at a three-casino model proposed by Gov. Deval Patrick in 2007 and subsequently rejected by the House.

Michael Pollock, Spectrum's managing director, said the market research group simply was asked to update the earlier report. Pollock said he couldn't offer revenue estimates on DeLeo's bill.

Rep. Brian Dempsey, House chairman of the Committee on Economic Development Committee, said lawmakers used the Spectrum report to make sure the gambling market hadn't collapsed.

He said the report confirmed the potential gaming market in Massachusetts still was strong. He said the committee combined the information in the Spectrum report with the committee's own estimates to come up with the projected tax revenues for DeLeo's bill.

"That allows us to at least get a reading on where the market stands currently and what we would expect the gross gambling revenues to look like," Dempsey said. "We think these numbers are certainly very sufficient."

The revenue estimates in the bill are based on a series of new fees, new taxes and assumptions about how much people will spend at the gaming facilities.

Among the new fees are $100 million in upfront licensing fees for each of the two casinos and $15 million in licensing fees for each of the four race tracks - a total of $260 million in licensing fees alone.

The bill also sets a tax rate of 25 percent of all gaming revenues at the casinos and 40 percent of the tax revenues at the tracks. The rate is lower for the casinos because they need to be built as opposed to the tracks, which already exist, Dempsey said.

Until the casinos are up and running, the bill assumes that the tracks will generate at least $100 million in tax revenues annually, all of which will be returned to cities and towns as local aid.

The Spectrum Gaming report found three casino resorts in Massachusetts could generate about $1.7 billion each year in spending by 2016 - or about $455 million in tax revenue for the state.

The report found location makes a big difference.

A casino in northeast Massachusetts could be expected bring in on average about $606 million in total revenues each year, compared to $598 million for a casino in southeast Massachusetts and $482 million for a casino in central or western Massachusetts.

The numbers are based on a casino model of 3,000 slot machines, 100 table games, and 40 poker units and 2,000 hotel rooms. The revenue estimates do not include tax revenues from hotels, meals and entertainment.

By 2016, the report estimated, Massachusetts would be scooping up more than $634 million in annual gaming spending that is now going to casinos in other states. That's more than 54 percent of what Massachusetts adults currently spend at out-of-state casinos.

Michael Pollock, Spectrum's managing director, said the group came up with its estimates by looking at how many adults live within a two hour drive of possible casino locations and trying to judge how many would visit the casinos, how much they would spend and how often they would return.

"We try to be very conservative in our assumptions," he said.

This program aired on April 6, 2010. The audio for this program is not available.

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