New England States Leap Into Gambling Fray
Eyeing Connecticut's windfall, other states turn to gambling to boost jobs and revenue, but critics question long-term effects
Dazzled by $800 million in gambling revenues earned annually by the huge Foxwoods casino in Connecticut, four other Northeastern states now want some of the same green and silver elixir.
Massachusetts, Rhode Island, New Hampshire, and New York, in one way or another, are scrambling to be the first to be second. Either by approving casinos on Indian reservations or unleashing a flood of moneymaking slot machines, many officials want to keep gambling money at home, not flowing into Connecticut. And they want gambling revenues filling strapped state coffers, too.
While some towns and areas in the region are resisting efforts to introduce gambling, many state and local officials are convinced that if Foxwoods can do it, so can they.
But the Foxwoods casino and hotel complex is enormously successful mainly because it is now the only gambling casino in New England.
Located in a rural setting, the casino welcomes a daily stream of cars and tour buses from all over New England. Owned by the small tribe of Mashantucket Pequot Indians, the reservation casino is a 200,000-square-foot gambling powerhouse, one of the most lucrative in the world since it opened four years ago.
According to a tribal spokesman, on weekends as many as 60,000 people a day gamble at Foxwoods. Soon to be expanded to 244,000 square feet, the casino has had a monopoly on gambling in the state because of an agreement hammered out with former Governor Lowell Weicker.
Federal law allows states to negotiate gambling compacts with tribes. No other casinos have been allowed in Connecticut under the compact with the Pequots. In return, the tribe shares 25 percent of revenue from slot machines with the state.
"This fiscal year their slot machines sent $135 million to the state, and next year the figure should reach $150 million," says Brian McCarthy, a revenue analyst for Connecticut.
But the conditions are destined to change, as the state has now approved a second casino for Bridgeport, an economically depressed city just 50 miles from New York City (and 100 miles from Foxwoods). A bidding war was under way between the Pequots and Mirage Resorts from Las Vegas to build a spectacular $900 million complex with a high-speed shuttle to New York. Republican Governor John Rowland favors the Pequots' proposal and has promised that the new casino will increase state revenues by $200 million over the next three years. He says the money will provide property-tax relief for cities and towns. The legislature may decide on the casino before the end of the year.
Only 10 miles from Foxwoods, the Monhegan tribe is in the early stages of planning to build and operate a $250 million casino on tribal land with 3,000 slot machines.
In Massachusetts, Governor William Weld signed an agreement with the Wampanoag tribe to build a casino on a golf course in New Bedford. If built, the casino would retain a six year exclusivity on gambling in Eastern Massachusetts, and the state would receive some $90 million a year from the tribe.
Part of the agreement included approval of up to 700 slot machines at six race tracks in the state, an accommodation to keep the tracks competitive. Tribal revenues would also support nonprofit organizations, including those serving compulsive gamblers.
"This [agreement] would create six [other] casinos in Massachusetts, says state Attorney General Scott Harshbarger, who opposes casino-style gambling and slot machines in the state. "A racetrack with slot machines is no longer a racetrack, it is a casino," he says.
Legislative approval of the governor's agreement with the Wampanoags is likely to be contentious, as the state's powerful horse-race lobby is pushing for approval and many churches and social organizations are opposing it.
Mr. Harshbarger lists a host of problems that can follow gambling: huge regulatory costs, increased crime and corruption, local businesses declining because few people leave self-contained casinos, and a rise in compulsive gambling.
Studies have shown that interest in gambling in the United States has historically moved in cycles. Initial support and enthusiasm turns sour some years later as social and economic decline and corruption increases.
"A vast expansion of gambling is the kind of operation that can suck a lot of money out of an economy," says Robert Goodman, a professor at Hampshire College in Amherst, Mass., and author of the new book "The Luck Business" (The Free Press).
"It can entice people into activities that are incredibly profitable for the operations," he says, "but they don't produce a product, and the odds are always stacked against the people gambling."
"What happens is that the operations get greedy," Mr. Goodman says. "Enormous influence peddling starts, and the political landscape of the state changes when gambling lobbyists become powerful." He cites racetrack lobbyists in Massachusetts as an example.
But the "me too" gambling rationale captivating New England states, as well as other regions of the US, stems initially from officials hoping to boost sagging local economies quickly. Casinos provide thousands of jobs during construction and later employ thousands to run the operations.
When the town of Bridgeport approved gambling in a referendum vote, Mayor Joseph Ganim said, "Never before has one development project had the ability to resuscitate the region's economy so quickly."
Ninety miles north of New York City, the Oneida and Mohawk tribes are tentatively exploring casino possibilities in the Catskill Mountains in Sullivan County where the tourism industry is struggling.
"The lure of having all these jobs that come with a casino has been attractive to us as one way of working toward economic revival," says Pat Pomeroy, chairwoman of the county planning board. "What we probably need to do now is look more seriously at the long-term effects of gambling."
In New Hampshire, the first state to approve a lottery, state Senator Leo Fraser (R) drafted a bill recently to approve 4,000 video-gambling machines at key tourist locations and the state's horse and dog tracks. An estimated $40 to $50 million will be generated for the state, Mr. Fraser says.
Law-enforcement officials are expected to resist the plan.