Massachusetts Considers HHR Expansion Amid Casino Revenue Concerns

Massachusetts lawmakers are evaluating a proposal to introduce historical horse racing (HHR) machines at Suffolk Downs and Raynham Park. Existing casino operators and other stakeholders have voiced opposition, citing potential revenue losses for state and local governments.

What Happened

Massachusetts is currently experiencing growing opposition to a legislative effort that seeks to permit historical horse racing (HHR) machines at two former racetracks: Suffolk Downs and Raynham Park. This proposal, part of a House version of an economic development bill passed in July, would allow these venues to operate HHR machines under their former racetrack licenses, according to GamblingNews and The Boston Globe. The Senate’s version of the bill does not include this provision, making it an issue for resolution in a conference committee.

House Speaker Ron Mariano has publicly defended the measure, stating its intention to generate additional funds for healthcare, specifically for the state’s Health Safety Net trust fund. This fund assists hospitals and health centers in providing care to uninsured and underinsured individuals. Proponents of the expansion project that these new gambling operations could generate $120 million annually in tax revenue by their third year of operation, as reported by GamblingNews.

However, the state’s three currently licensed casino operators, Encore Boston Harbor, MGM Springfield, and Plainridge Park, dispute these revenue projections. They have jointly called on lawmakers to reject the measure, supporting their concerns with an economic impact study conducted by Morowitz Gaming Advisors and Global Gaming and Hospitality. This study suggests that HHR operations could divert between $131 million and $216 million in gambling revenue from the existing casinos, potentially leading to annual losses of $45 million to $73 million for state and local governments. The report also warned of potential job losses and reduced business for casino-affiliated companies.

Key Details

• The Massachusetts House gambling proposal, if enacted, would allocate 2.5% of the total amount wagered on HHR machines to the state’s Health Safety Net trust fund, according to House Speaker Ron Mariano via GamblingNews.
• An economic impact study commissioned by existing casino operators projects that HHR operations could result in annual losses of $45 million to $73 million for state and local governments due to siphoned revenue, GamblingNews reported.
• The proposed House amendment does not impose limits on the number of HHR machines or their operational locations, nor does it explicitly restrict online HHR wagering, a point of concern for potential competition with the Massachusetts Lottery, as stated by GamblingNews.
• The Mashpee Wampanoag Tribe, which operates the First Light Casino, has formally opposed the HHR expansion, citing concerns about the potential impact on tribal economic interests and sovereignty, according to Tribal Chairman Brian Weeden, as reported by GamblingNews.

Why It Matters

The proposed expansion of gambling operations in Massachusetts through historical horse racing machines introduces a new competitive dynamic within the regulated gaming market. Current state regulations limit casino development to three geographical areas, requiring licensed operators to negotiate agreements with host communities and adhere to specific regulatory frameworks. The HHR proposal, however, does not include these limitations regarding the number of machines or operational locations, and it also contains language that could permit online HHR wagering, potentially competing with the Massachusetts Lottery’s recently launched online platform, according to GamblingNews.

This regulatory discrepancy and the potential for new competition have drawn significant opposition from established casino operators and the Mashpee Wampanoag Tribe. The financial projections from the casinos’ commissioned study, indicating substantial revenue losses for both the operators and state/local governments, underscore the economic implications for the commonwealth. The debate highlights a tension between generating new revenue streams for public services and safeguarding existing economic contributions from established regulated gaming entities, as detailed by GamblingNews.

What’s Next

The HHR proposal’s inclusion in the House version of an economic development bill, and its absence from the Senate’s version, means that lawmakers must now address the provision in a conference committee, as reported by The Boston Globe via GamblingNews.