In a referendum held earlier this week, Massachusetts voters cleared the way for two new casino resorts and a slots parlor in the state.
Wynn Resorts, MGM Resorts International and Penn National Gaming are free to move forward with their plans of turning Massachusetts into a proper gambling state. According to this week’s gambling news, voters rejected an initiative to repeal a three-year-old law that welcomed casino developers to the state.
Despite a heavy anti-gambling campaign, voters decided to uphold the 2011 casino law by a 60% to 40% margin. Now the Massachusetts Gaming Commission has to take a vote on final license approvals for two major gambling companies – Wynn and MGM – who both promised to invest millions of dollars into casino and entertainment resorts.
Massachusetts gambles with its future
According to the American Gaming Association, 39 states have casinos, but the US gambling industry has been struggling over the past few years and several properties were forced to close in New Jersey and Mississippi. But Massachusetts is going to try its luck anyway.
Geoff Freeman, president and chief executive officer of the association said during a conference call: “A 60-to-40 decision is about as big as it gets in today’s political environment.”
With American gambling laws leaving it up to state authorities to decide whether they allow casinos or not, lawmakers in Massachusetts went for it and in 2011 passed regulations to authorized plans for three casino resorts and a slot-machine facility.
Wynn Resorts and MGM quickly got their hands on two of the three available licenses. The former proposed a $1.6 billion resort located in Everett, just outside of Boston, and the latter offered to spend $800 million on a gambling complex in Springfield.
Penn National, a company based in Wyomissing, Pennsylvania, grabbed the sole slots parlor permit offered in the state, and was so confident that the vote would be in its favor that it continued the venue’s construction as planned, throughout the entire campaign. Penn will spend $225 million to add a slot machine parlor to a horseracing track in Plainville.
Heavy competition at the border
As competition between neighboring states keeps growing, Massachusetts is trying to keep up with casinos located in its vicinity. These attract a lot of gamblers from the state, but all profits and tax revenue stays there.
Richard McGowan, associate professor of the Carroll School of Management at Boston College explains: “Most states are trying to reclaim revenue from bordering states. The reason why Massachusetts approved casino gambling in the first place was to reclaim revenue from tribal casinos in Connecticut and Rhode Island.”
In a recent statement, the Massachusetts Gaming Commission promised it would seek to maximize casino revenue, boost economic development and do everything it could to create new job opportunities, while trying to minimize “the unintended and potentially negative consequences.”
Casinos shares have been dropping recently and experts say the phenomenon is caused by a gambling slowdown in Asia. In New York, MGM recently lost 2.8% to $21.71, while Wynn dropped 3.8% to $178.22 and Penn fell 2.5% to $13.03.
The future of gambling in Massachusetts
Now that the referendum has passed and all casino plans are back on, Massachusetts gamblers can expect to have more options right in their home state.
Penn National plans to open its $225 million slot parlor at the Plainville harness racing track by June 2015. Once it’s completed, the venue will offer some 1,250 machines, plus a restaurant, bar and entertainment options. Gamblers won’t be able to play blackjack or roulette here, but those will be available at the state’s other casinos. The slots parlor will create 1,000 temporary jobs and an additional 500 permanent ones.
MGM Springfield is an $800 million project expected to begin this spring. While it could take about two and a half years to build, the venue will provide customers with a complete offer of casino games, with 3,000 slot machines and 75 gambling tables, a hotel with 250 rooms, as well as shopping, dining, business and entertainment facilities. The project will create 2,000 temporary and 3,000 permanent jobs.
Wynn’s project in Everett is still years away from completion. The company has to do an environmental cleanup before it can start construction on the 30-acre chemical plant site previously used by Monsanto. If everything goes according to plan, the casino could open in late 2017, offering 160 table games, 3,200 slot machines, a nightclub, restaurants, shopping facilities and a convention space. It would create 4,000 temporary construction jobs and 4,000 permanent casino jobs.
The third – and last – casino license will be awarded in the near future.