Craven Capitulation: Massachusetts Edition

[Update: July 13, 2017: In light of the news that House Ways and Means Chair Brian Dempsey is stepping down, I note the following:

  1. ML Strategies is a lobbying powerhouse on Beacon Hill. Its biggest client in 2016, to the tune of $276,579.23, was Wynn Resorts.
  2. The budget provision that could give casinos (including Wynn’s Everett casino) a big competitive advantage was included as part of the House Ways and Means budget.  The Senate did not include such a provision.
  3. Today, House Ways and Means Chairman Brian Dempsey resigned from the House to become the chief operating officer at ML Strategies.]

_________________________________

[Original post: July 7, 2017]

While we’re understandably fixated today on the craven capitulation of our president over in Hamburg, let us pause to recognize a nadir of submission reached right here in Massachusetts — in the annual budget released this morning.

Casino magnate Steve Wynn, the finance chairman of the Republican National Committee and a friend and supporter of his fellow tycoon Donald Trump, has been busy lately twisting the arm of Senator Dean Heller of Nevada, one of the few Republican opponents of the Senate health care plan, to retract his opposition and get with the program. That health care plan, of course, would cost Massachusetts a billion dollars a year starting in 2020 (the year after Wynn’s Everett casino is scheduled to open). By 2025, the plan would have ruined our health care system and possibly our economy: a quarter-million of our poorest residents would have lost their health care coverage and annual costs would have nearly doubled.

Our state’s response? To amend our gambling law so that casinos could continue selling alcohol after the 2 a.m. closing time for bars and restaurants.  A spokesperson for the House of Representatives, where the amendment originated, explained that we need to “ensure competitiveness,” a rationale that will come as a surprise to the hospitality industry establishments that will be trying to compete without the advantage of the late hours (or a slots barn).

Anyway, a nice kiss for Steve Wynn that leaves the rest of us wondering — whatever happened to this piece of advice from the current POTUS? “Get even with people. If they screw you, screw them back 10 times as hard. I really believe it.”

 

The Gaming Commission’s Hurry-Up Offense: Dispatch from the “ATM’s in Casinos” Battlefront

The latest episode in the drama concerning the legality of placing ATM’s in casinos here in Massachusetts.

Quick recap. At present, a state law says that no ATM “shall be located upon premises where there occurs legalized gambling.” This law presents an obstacle of major significance to the casino industry, under whose business model casino patrons must have ready access to all of their assets. In a very lightly attended legislative session on Christmas Eve, the State Senate included a repeal of that law in an amendment to a much larger bill concerning the regulation of state-chartered banks. The maneuver did not go undetected, and those who favored more careful deliberation on this policy question succeeded in removing the proposed repeal before allowing the bill to pass.

The Gaming Commission, in sympathy with the casino industry, had earlier asked the state’s Division of Banks for its views, and last week the agency responded: no repeal of the law is necessary because it has already happened. Their argument goes like this: the 2011 gambling law included a directive to several state agencies to ensure that casinos do not allow “any credit card or automated teller machine that would allow a patron to obtain cash from a government-issued electronic benefits transfer [EBT] card.” This prohibition against EBT cards, the Division of Banks reasons, also operated to repeal the earlier law prohibiting the placement of ATM’s in casinos altogether. Despite the fact that the Legislature did not expressly repeal the ATM prohibition (as it did with seven other statutes it regarded as inconsistent with the gambling law), the repeal nevertheless occurred “by implication,” because no other interpretation is conceivable: the prohibition against the use of EBT cards can mean only that the Legislature intended that ATM’s capable of rejecting EBT cards are permissible.

Whether the Division of Banks is correct in its interpretation is certainly a matter of dispute. (Courts are very relucant to conclude that repeals “by implication” have occurred: the test for the principle of implied repeal is “whether the prior statute is so repugnant to, and inconsistent with, the later enactment that both cannot stand.”) For one thing, the Legislature evidently lacked confidence that the gambling law repealed the entire ATM prohibition “by implication,” or else it would not have attempted to repeal it expressly last month.

In any event, now that it believes it has a green light of sorts from the Division of Banks, the Gaming Commission has a hurry-up offense going. Draft regulations allowing ATM’s as long as they are 15 feet or more from the gaming area have been issued and the Commission is requesting comments from the public by 4:00 pm on this Monday, January 19 (yes, it’s a federal holiday).

The Commission’s decision on ATM’s is far from the final word. And they should know what you think. So this weekend, maybe while you’re watching the Patriots’ hurry-up offense, drop a line to the Commission with your thoughts — and remember, the wisdom of the ATM policy is fair game, too. Use ‘draft regulation comment’ in the subject line and email to mgccomments@state.ma.us.

Gaming Commission Has to Try Some Fancy Footwork to Get Around ATM Ban

Last week’s meeting of the Massachusetts Gaming Commission included some lip service about responsible gambling, specifically, a discussion of the “Responsible Gaming Framework,” which the Commission says “is based on the commitment by the Massachusetts Gaming Commission and their licensees to the guiding value of ethical and responsible behavior.” (You may add your comment about oxymorons here.)

Among the topics addressed by the responsible gaming folks was how to prevent casino customers from emptying their bank accounts — I mean rather, how to encourage casino customers to empty their bank accounts responsibly. To this end, it was recommended that ATM’s be placed at least fifteen feet away from gaming areas, the idea being that a fifteen-foot stroll would suffice to deter a problem gambler.

Which is pretty funny, especially when you consider that there is a law on the books right now that says that no ATM’s “shall be located upon premises where there occurs legalized gambling, other than a state lottery.” Just how the Commission was planning to get around this law in order to allow ATM’s in the first place is not quite clear, but it would seem to involve a very restrictive definition of “the premises where there occurs legalized gambling” — so restrictive, in fact, that seven or eight steps will take you off the premises entirely and put you in front of an ATM.

Or maybe there’s another way around the law. How about getting rid of it altogether? Last month, our House of Representatives voted to do just that, as one small part of a big bill entitled “An act modernizing the banking laws and enhancing the competitiveness of state-chartered banks.” (Wonks: see section 31 of the bill.)

The repeal of the ATM casino ban was quietly added to the banking bill in January by the Joint Committee on Financial Services, whose House Chairman, retiring Representative Michael Costello of Newburyport, has been known to engage in clandestine efforts at lawmaking that only House leadership seems to be aware of.

Thankfully, the State Senate did not act on the bill before the Legislature’s formal sessions ended on July 31. So the Gaming Commission will likely have to rely on its fancy (fifteen) footwork to try to circumvent the law that now prohibits ATM’s at casinos.

(Imagine where we’d be if the gambling industry’s guiding value was not ethical and responsible behavior.)

Nice Casino Referendum You Got There: Too Bad if Anything Was to Happen to It

House Speaker Bob DeLeo, the Legislature’s biggest casino fan, had some ominous-sounding words to say to WGBH News yesterday about the possible budget consequences if the casino repeal succeeds at the polls:

Massachusetts speaker of the House Bob Deleo says lawmakers would have to patch a multi-million dollar hole in the state budget if voters choose to repeal the casino law in November.

“We would have to make some difficult decisions in terms of cuts. That’s one of the issues I thought about this morning actually,” DeLeo told reporters Wednesday.

The state is banking on $54 million in casino licensing fees and $20 million in slot parlor money in the budget for the fiscal year that begins July 1.

“We’ve already started to use it and depend upon it.”

OK, OK. Message received. We are to understand that there’s a threat of a big budget hole — something that would require either big budget cuts or big tax increases to fix.

Well, those of us who think casinos are a terrible idea also like to think of ourselves as problem solvers. And if budget cuts might be needed because the casino law is repealed, we offer up one suggestion to the House for the very first cut to make: give up the “sales tax holiday” that you have proposed for the second weekend in August.

The sales tax holiday weekend is a gimmick that’s been going on in the state for a decade. Its original purpose was to encourage people who to go buy things that they would not ordinarily buy during one of retail’s slowest months. But, even assuming that the holiday met its intended goal a decade ago, the fact that the Legislature has reprised the holiday in seven of the eight subsequent years has substantially reduced whatever stimulative power it once had. Now that buyers anticipate the holiday, it doesn’t encourage more sales, but simply shifts the timing of sales to coincide with the holiday. Little wonder that the Senate Ways and Means Chair, while defending the program, said in a moment of understated candor that it “may not be the finest public policy on the planet” (State House News, 7/28/11). On top of everything else, the accounting complexities the holiday requires of retailers favor bigger rather than smaller companies. The result? One weekend each August we shovel millions to our Walmarts.

According to the Department of Revenue, last year’s sales tax holiday cost the state over $24 million. We could make up one-third of the $74 million gap that Speaker DeLeo is forecasting just by bagging the sales tax holiday this year. Now that didn’t hurt too much — maybe this won’t be such a big problem after all. And eliminating the sales tax holiday is just one idea.

The budget hole that concerns the Speaker, when compared to the $22 billion in revenue that the state will collect amounts to…let’s see, about three-tenths of one percent. And by eliminating the sales tax holiday we’ve already made a big dent in that three-tenths of one percent.

The Speaker really shouldn’t worry so much.

Casinos’ Newest Ask: Let Us Take Food From the Mouths of Children

You’re probably thinking that I’ve got to be exaggerating with the headline on this post. But I’m not – here’s the story.

Some of the corporations pursuing casino licenses in the state say that in order for them to operate profitably here, some changes need to be made to our gambling law. One of the changes they want is to be relieved of the responsibility of checking to see if casino winners are on the list of persons who are delinquent in paying child support that they owe and to deduct those past due amounts before making payouts (this requirement also applies to past due taxes).

The public policy objective here — that obligations to family and community come first — is universally recognized: people who fail to pay child support can have their paychecks garnished, their personal property seized, their driver’s licenses suspended. The state lottery cannot make payouts without first checking for these unsatisfied debts.

But the casinos are of the view that they should not have to play by the same rules requiring them to deduct past due child support from a gambler’s winnings. And — the Gaming Commission agrees with them (a pause here to note that a poll released yesterday shows public confidence in the Gaming Commission to be under water). This week, the Commission went to bat for the casinos and asked the Legislature to suspend this requirement. But only for the casinos — it would remain in effect as to lottery winnings, paycheck garnishment, etc.

Yes, we totally get that being identified as a deadbeat parent can take the sizzle out of a gaming excursion. And, as the children who are being deprived of their parents’ resources can tell you, that’s no picnic either.

There are 71 days remaining in the Legislative session — stay tuned to see what happens.

PS – the Gaming Commission has not attempted to reconcile its proposal to exempt casinos from child support checks (while leaving the lottery subject to that requirement) with its obligation under the gambling law to enhance and support the performance of the state lottery. Surely the prospect of more take-home winnings from casinos would draw a certain class of gambler away from the lottery,

Another Month, Another Lawsuit: Maybe the Gambling Industry in Massachusetts Will Just Destroy Itself

From the excellent Mark Arsenault of the Globe, we learn of another lawsuit (to be filed tomorrow) in the great stampede for casino gambling licenses in Massachusetts.

This time the aggrieved party is a jilted Palmer landowner.  And the claim is that casino developer Mohegan Sun, after entering into a contract to locate a casino on Palmer land, engaged in “secret talks” with Suffolk Downs about locating a casino there instead, then intentionally ran a “lackluster” campaign in Palmer for the necessary approval of its voters. In November, Palmer voters rejected the casino proposal, and now the landowner is preparing to sue Mohegan Sun for breach of contract.

This brings to at least three the number of lawsuits to which the casino industry, itself not yet born (no casino has opened and no license has even been awarded), has given birth. In addition to the Palmer litigation, casino developer Caesars Entertainment is suing Gaming Commission chairman Steve Crosby over a claimed conflict of interest, and casino backers are seeking to keep the entire question of casino gambling from being put to the voters in the November statewide election.

All this contentiousness somehow brings to mind the image of the mythological Ouroboros, the serpent that destroys itself by eating its own tail.

220px-Serpiente_alquimica

(We can dream, can’t we?)

Caesars Entertainment in Town to Give Us a Taste of Casino Employment Opportunities

State House News Service is reporting that Caesars Entertainment and Suffolk Downs are jointly hosting an employment forum on Thursday (10/3) “to give local residents a taste of the employment opportunities that await them if the bid to build a casino is successful” — and, just possibly to influence their vote in the November 5th referendum that will determine whether the casino moves forward.

Since I will not be able to attend the forum, I spent some time on Caesars employment website to find out what jobs in a modern casino are like. Of course, everybody knows that modern casinos no longer involve games of baccarat played on plush furniture by rich and exotic people who use cigarette holders. They involve slot machines — in fact, modern casinos are barns packed full of slot machines. Modern slot machines are sophisticated computers designed to extract as much money from players as possible, and the biggest players are people of low and moderate income.

So it may not be a surprise that among the employment opportunities that await the people of East Boston and Revere if the bid to build a casino is successful are jobs like “slots foreperson.” This job involves keeping slots players happy during the hours they spend losing their money and keeping their mind off how much they’re losing. Or, as perhaps only Caesars could describe it:

Slots Foreperson: Actively patrols assigned sections looking for opportunities to surprise and delight guests. Enhances guest’s slot entertainment experience by creating a fun, high-energy environment through the celebration of slot wins and building players’ perception of luck. Displays attentive, upbeat, and enthusiastic behavior throughout the shift. Develops customer loyalty by delivering unparalleled guest interactions as directed by company trained initiatives.

If you’re the kind of person who looks forward every day to “building players’ perception of luck,” which apparently means explaining why it’s not totally a bad thing that the rent money is all gone, this is a job you might want to look into.

(And if anybody finds out what Caesars means by “unparalleled guest interactions,” please write. I am imagining the worst.)