slides: Critics Say Failed Casino Deal Cost Worcester Millions

Thursday, October 17, 2013

Paige Pihl Buckley, GoLocalWorcester Contributor

Plans for a Worcester casino were abandoned in June.

As Mohegan Sun Massachusetts announces more than $20 million in traffic and roadway improvements to Palmer, Worcester residents are wondering whether a failed bid to install a slots parlor in Worcester could be costing the city millions.

“It is anticipated that the successful implementation of The Gaming Act will provide the citizens of the Commonwealth with 8,000 to 10,000 construction jobs, 8,000 to 10,000 permanent jobs and $300 to $500 million in annual revenue,” said Elaine Driscoll, Communications Director for the Massachusetts Gaming Commission.

For the history of Worcester's casino debate, see the slides, below.

Some critics say Worcester could be missing out on its share.

“The public doesn’t know what happened to it and why it didn’t progress,” said John Giangregario, President of the Canal District Alliance, of the proposed slots parlor in Worcester.

“Given the disadvantages of some gambling issues, legalized gambling was approved by the voters,” he said, “and it certainly presented an opportunity to the city of Worcester in terms of tax revenue, jobs, and economic development.”

Giangregario was disappointed that a potential slots parlor in Worcester’s Canal District, proposed by Rush Street Gaming, was not explored further. According to Rush Street Gaming’s proposal, the slots parlor would have brought $240 million in investment to Worcester’s downtown and at least 600 permanent jobs. The construction of the casino and accompanying hotel may have brought several temporary construction jobs as well.

“We were in favor of it,” said Giangregario.

“We thought that this billionaire developer who has a history of opening up casinos near water, with deep pockets, had the capacity to invest in the Blackstone Canal, which would provide economic development for the entire city of Worcester,” he said. “Now Worcester is left with all the problems of legalized gambling and none of the benefits.”

Other Development In The Works

Others agreed that Worcester was in need of economic development, but were not sure a slots parlor would have brought the shot in the arm the city needs.

“I was not here in my current capacity during that discussion,” said Tim Murray, President and CEO of the Worcester Regional Chamber of Commerce. “There was no formal proposal that was presented to the community and, as the city manager said, they weren’t able to come up with an agreement.”

He stressed the Chamber’s current “recruit, retain, and incubate” agenda, saying that while many may view the failed slots parlor proposal as a missed opportunity, Worcester has been making considerable progress without it.

“The last five years Worcester has seen construction cranes on its horizon – a lot continued to happen, all of those projects continued to go forward when projects in other cities including Boston were shelved,” said Murray. “I think it speaks to the momentum in Worcester that these projects endured despite the great recession.”

That momentum was not enough to carry the controversial casino proposal forward. It was officially abandoned in June after the city of Worcester and Rush Street Gaming failed to make an agreement. The Chicago-based company then shifted their focus to a similar proposal in Millbury, however that eventually fell through as well.

Short Term Investment Not Worth The Long Term Consequences

“The promises always sound great but the long term negative impacts outweigh the short term, perceived gains,” said John Ribeiro, Chairperson of Repeal the Casino Deal, a statewide organization fighting to include a repeal option on November 2014’s statewide ballot.

“Another way to look at it would be to compare it with a natural disaster like the Springfield tornado,” Ribeiro said. “As a result of that disaster, there was a tremendous amount of money infused into the economy in terms of construction and rebuilding costs but they came at a tragic cost. A casino doesn't have the acute impact of such an event, but one could argue that in the long term the negatives are even greater.”

Steve Abdow of the Episcopal Diocese of Western Massachusetts gave more concrete examples.

“There will be a shift in money spent away from the state lottery, away from entertainment venues and restaurants, away from auto repair shops and appliance dealers and department stores as discretionary income is spent at a casino,” he said. “The discretionary income is finite. The customers will not be affluent people with extra money.”

Abdow also cited the Institute for American Values’ recent report, Why Casinos Matter: Thirty-One Evidence-Based Propositions from the Health and Social Sciences. The report says that while casinos may inject much needed revenue into communities in the short term, in the long run they extract wealth from communities and hurt local businesses and property values.

“Massachusetts has the benefit of witnessing the effect casinos have had on the economy in several other states,” said Brain Ashmanksas, Campaign Director of Repeal the Casino Deal.

“In all cases the so-called investment has been revealed to be a mirage,” he said. “The jobs it creates are funded by redistributing wealth from the very community they are employing, rather than creating or bringing in new wealth, so it results in a net job loss when dollars spent on slots cease to be spent at local businesses.”

While both sides of the debate have studies and expert opinions on their side, one thing is clear, that Worcester residents will not have the opportunity to decide the slots parlor issue at the ballot box, unlike in Palmer, where residents will vote on Mohegan Sun Massachusetts’ proposal on November 5.

Related Slideshow: The Evolution of Worcester’s Slots Parlor Debate

Prev Next

State House Okays Casinos

In 2007 Governor Deval Patrick proposes bringing casino gambling to Massachusetts. The state is divided into three casino zones with one license to be awarded in each zone. Worcester falls into the state’s Western district, and is considered a prime location for a potential casino. Worcester voters endorse casino gambling in a nonbinding referendum.

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Lines Are Redrawn

In November 2011, the Expanded Gaming Act passes Beacon Hill and is signed by the governor. The new law redraws casino zones and places Worcester in the highly competitive Eastern district and in direct competition with developer favorite Suffolk Downs. Then-State Rep. Vincent Pedone (D-Worcester) says he advocated for the districting change as a way to keep casinos out of Worcester.

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Slots Parlor in MA?

With Worcester County now part of the competitive Eastern district, developers eye potential locations for slots parlor in Central Massachusetts. Casino proposals in and around Boston are considered a lock, so slot parlor proposals are the safer bet. Several developers throw their hats in the ring.

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Rush Street Gaming

Last spring, Rush Street Gaming proposes a $240 million slots parlor in Worcester’s Canal District as well as a separate hotel in the immediate downtown. The Chicago-based company claims the development will bring 600 permanent jobs and several hundred construction jobs to the Worcester area. The Canal District Alliance supports the proposal as an economic boon for an area in need of investment.

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No Deal

Rush Street Gaming and the City of Worcester are unable to reach an agreement leading to a formal proposal. They withdraw the tentative proposal in June of 2013. It never goes to a referendum vote. Rush Street begins pursuing a potential slots parlor in neighboring Millbury, but that proposal is eventually withdrawn when it becomes clear that the majority of residents do not support the proposal.