Casino Ruling Could Have Far-Reaching Consequences

The Massachusetts high court has dealt a blow to the prospects of casino gambling and slots in the state. Once seen as a sure thing, the Supreme Judicial Court ruled unanimously Tuesday that voters should decide if gambling should be legal.

The state Legislature approved casinos and slots three years ago, but now the question will be on the ballot this November, and the political fallout and financial impact could go far beyond gambling.

Coakley’s Response

In ruling that voters should determine the fate of gambling, the SJC overturned the opinion of state Attorney General Martha Coakley. Last fall Coakley refused to certify a petition initiative that would have put the question before voters.

Coakley argued that the state had implied contracts with gaming companies and that if voters decided gambling should be illegal it could violate the property rights of developers who have spent millions betting they could legally build casinos in Massachusetts.

“We made a call,” Coakley said at a press conference Tuesday. “That was our job to make a call. The court said, ‘We don’t agree with your call.’ That’s fine. They’re the final referee in this. And now it’s decided.”

In its 55-page decision the high court used harsh language to describe Coakley's reasoning over property rights, calling it "peculiar" and a departure from common sense. Coakley was unfazed.

“I think sometimes the law is not commonsensical in fairness,” she said. “And I think we tried our best. And I made the decision, so I don’t take that personally.”

Gambling Opponents React

At a sidewalk news conference outside the State House, those who led the fight against Coakely's decision were overjoyed with the court ruling.

“Today’s victory is a victory for democracy,” said attorney Tom Bean, who argued the case before the SJC. “It’s a victory for the people of the commonwealth who now have the opportunity to vote and decide that casinos are bad for Massachusetts, they’re bad for business and they’re bad for people.”

The anti-gambling forces are a coalition of groups that came together to defeat proposals in several towns. Coordinating the effort is John Ribeiro, head of Repeal the Casino Deal.

“We’ve been outspent in neighborhoods like East Boston, Palmer and Milford almost 100-1, so we’re welcoming this David v. Goliath story,” he said.

'There’s A Lot At Stake'

Goliath in this case would be the gaming industry. Under current law — passed in 2011 — there are to be up to three casinos and a slot parlor in the state. Estimated annual revenue: $1.7 billion.

“What’s at stake here are thousands of jobs and hundreds of millions of new tax revenues for the commonwealth,” said Eric Schippers, senior vice president of Penn National Gaming.

In February the state's gaming commission awarded Schippers’ company a license to install slots at the Plainridge Racecourse in Plainville.

Schippers is disappointed by the SJC's decision but said “the project is full speed ahead" with opening day a year from now.

“We’ve spent $25 million on a license fee already and we’re well underway with construction now on this $225 million project, and so there’s a lot on the line for us,” Schippers said. “There’s a lot at stake. But we remain confident that voters are going to want to protect jobs instead of destroy jobs come November.”

Preparing For A Fight

Schippers said Penn National is going to team up with MGM Resorts International to fight the anti-gambling ballot question. MGM recently received a license to build a casino in Springfield but doesn't have to pay the $85 million fee until after the November election.

“We look forward to a vigorous campaign that is going to be heavy on education of the voters,” Schippers said.

You can bet heavy on campaign spending. And that could influence the choice voters make when they cast ballots for governor. The SJC's decision throws a wild card into the race.

The court also acknowledges its decision could have an even bigger impact. The justices write, "The abolition through the initiative might even affect non-gambling companies’ estimation of Massachusetts as a reliable place to do business."