If Former Gaming Chair's a Little Worried, Maybe We All Should Be

Friday, August 9, 2019

The Boston Globe's Shirley Leung had a great idea for a column this past week: invite Steve Crosby, the original (now former) chair of the Massachusetts Gaming Commission, to lunch at the newly opened Encore Boston Harbor casino in Everett and get his reactions to the Wynn Corporation's lavish gambling mecca on the Mystic, ("Ex-chief of gaming panel is wowed by new casino," 8-8-2019). It was Crosby's first visit to the completed casino.

Now, Crosby did a superb job as founding chief executive of the government entity that had the tall order of bringing casino gambling appropriately to life -- of actualizing the will and the vision of the legislature when, in 2011, it legalized gambling at one slots parlor and as many as three casinos in Massachusetts.

He has not yet received the credit due for his model service as commission chair. Over time, I hope what Crosby did in that high-pressure/high-stakes role will be seen in a proper light and he will be esteemed accordingly.

The best part of Leung's column, I felt, was its conclusion, where Crosby expressed concern that Encore Boston Harbor might not generate sufficient revenue to justify the Wynn Corporation's multi-billion-dollar investment -- that is, to make it sufficiently profitable in the eyes of those who make big investments in publicly traded companies. 

My long-lingering, oft-expressed fear that, one day in the not-too-distant future, we will see a casino rescue bill filed in the Massachusetts legislature seemed all of a sudden reasonable.

Excerpt from Leung:

"...then there's the question of whether Wynn Resorts can make a return on its investment.  When the company won the license in 2014, it planned to spend only $1.6 billion, not a billion dollars beyond that.

" 'It's got to cause everyone to pause,' Crosby said. 'Now we all just hold our breath and hope it works.'

"As for his role in shaping the state's casino industry, here's a bit of self reflection: 'Even with many years of experience in high level politics and public life, I underestimated the PR, political and legal maelstrom that establishing casinos would engender.  On top of it, I made my share of mistakes.  So how has it worked out?  I would say so far, so good.  But the truth is we will not know the long-term cost/benefit trade-offs of destination resort casinos for years or even decades.' "

We can thank Crosby for his honesty and candor. 

How's this whole thing with casinos going to work out for Massachusetts?  Who really knows?  Time will tell.

In the meantime, I'd say the odds of a bill being filed to reduce the level of taxation on gambling establishment proceeds from 25%, where it now stands, to somewhere between 15% and 20%, are better than even. 

If the rate isn't cut, gambling chiefs will say, many hundreds of casino and slots parlor jobs will have to be eliminated.

Consider that, in April, revenue at the MGM casino in downtown Springfield was $4 million lower than it had been in March, and that, in no month since it opened (in August, 2018), has MGM Springfield reached its pre-opening projections of $34.8 million in monthly gross revenues.    In April, for example, it grossed $21.8 million.

MGM Springfield officials say they are pleased with its overall performance.  How long will their patience last?

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