Tuesday, July 26, 2011

Please answer three simple questions before finalizing gaming legislation.

There are many critical questions members of the Joint Committee and our elected officials need to ask and get credibly answered before a finalized Massachusetts casino legislation package is presented as a done deal in September.  For those who are going to vote for such legislation this includes asking who benefits from any special interest carve outs, such as the tribal preference scheme desired by Governor Patrick, Therese Murray and the lobbyists for slot machine companies and foreign investors behind Indian casinos.  In 2010 these groups spent $3 million lobbying Massachusetts politicians and another $1.3 million in the first half of 2011 – of which they funneled $254,000 in campaign contributions to our elected officials so they must have something big at stake which they want included in this legislation.

To keep it simple, let’s just ask them to answer three basic questions.  Questions apparently Governor Patrick’s casino henchmen Greg Bialecki and Stan McGee aren’t asking (or simply don't want asked).  Perhaps State Treasurer Steve Grossman will give this an honest look?

1.     What are the economic differences to the state and local communities of Indian versus non-Indian gaming operations?  How does the Commonwealth’s budget coffers and those of impacted local communities benefit from a tribal preference which sets aside any region or site specifically for the purposes of Indian gaming versus a conventional non-Indian gaming operation?


·        Indian gaming operations cannot be taxed or controlled vis-à-vis their finances, size or operations in any manner by a state or localities (Sample references: 2011 Duluth-Fond du Lac casino contract ruling by IGRA and 2011 Rincon California court ruling)

·        Indian gaming operations pay no licensing fees or real property taxes for slot machines or other equipment (Reference: Wampanoag chairman Cedric Cromwell pledge to “crush the competition” by paying no fees or taxes.)

·        Indian gaming complexes  pay no state sales taxes for food, liquor, tobacco or other goods sold and create unfair competition for existing local businesses.  Indian gaming complexes pay no hotel taxes or fees.   Indian gaming “reservations” land and buildings are taken off the local rolls for real estate taxes and do not have to comply with local zoning laws (i.e., no building codes or permit fees) and cannot be forced to contribute towards costs for local services (i.e., additional emergency services, health or other costs which typically rise in localities neighboring casinos)  (Reference: Valley Journal and Indian Gaming Commission)

·        Studies show all new gaming, specifically those which include slot machines, have a negative impact on state lottery revenues.  Further, the studies show Indian gaming operations have a higher negative impact on state lotteries given their tax-free, high ratio of slots and no-limitation operations.  This means fewer lottery players and new costs required to compete with casino advertising for their market share of gamers. (Reference: Impact of Indian Casinos on State Lotteries, Siegel & Anders, Public Finance Review, March 2001)

2.     What are the job creation-related differences?  Many supporters of Massachusetts casinos say it’s all about jobs needed now, so what is the litigation, administrative and other corresponding delay risk for shovels-in-the ground jobs associated with including a tribal preference legislative carve out?  What are the long-term employment differences of having unregulated "reservations" where state and federal labor laws don't apply?


·        The land-in-trust qualification delay issue.  Indian gaming requires that tribes have lands set-aside into trust on which they operate their casino complexes.   Tribes with federally recognized reservations have lands-in-trust; no such reservations exist in Massachusetts other than the Aquinnah reservation on Martha’s Vineyard.  Based on current federal regulations, as recently defined by the U.S. Supreme Court in Carcieri v. Salazar, no Massachusetts tribe qualifies for nor may be granted new land-in-trust by the federal government.  To change this requires an act of Congress, which has tried and failed to pass such legislation in the past three sessions.

·        The land-in-trust administrative delay issue. If federal legislation is passed and signed into law to “fix Carcieri,” the Department of Interior (DoI) may then begin the process of reviewing new applications from tribes requesting lands be put into trust for their reservation, casino gaming and other purposes.  The current review time for such reviews is between six and 15 years and requires multiple economic, environment and other impact studies and public comment periods before DoI will approve any new land-in-trust reservation.

3.     What are the local community impact and control differences between an Indian gaming operation and a non-Indian gaming operation for the localities in which they are located and their neighboring towns compared with non-Indian gaming operations?

A Time Magazine investigation revealed foreign backers, like the Malaysian gambling syndicate Genting which is backing the Wampanoag deal in Massachusetts runs the show.  Tax-exempt cash flows into these foreign investors overseas bank accounts while local communities suffer.  Local law enforcement, zoning and other rules are no longer allowed once a reservation casino is established in your back yard. Only the FBI can intervene and only when specific tribal constitution rules are broken when it comes to dealing with crime and other problems localities have with Indian casinos - which were never envisioned for non-reservation type settings like Raynham, Fall River or Mashpee.

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