By Seth Daniel
The lemons and cherries are lining up for another hot debate on slot machines, with State Treasurer Tim Cahill starting out the discussion last week when he proposed a plan for slot parlors to the state Legislature.
Once again, that plan has Revere right in the middle of the debate as Wonderland Dog Track and Suffolk Downs are considered major players in Cahill’s plan.
“I proposed slot parlors instead of casinos because I think the market is more conducive to slots,” he told the Journal in a phone interview. “My plan follows the governor’s general outline. We will propose one slot parlor north of Boston so that would put Suffolk Downs, Wonderland or a combination of the two in the mix certainly.”
Cahill’s plan proposes three slot parlors – including the one north of Boston, a parlor south of Boston (he envisions Raynham Dog Park or Plainridge Horse Track being players there), and one in western Massachusetts.
Instead of allowing the tracks to have slots by right, Cahill piggybacks on Gov. Deval Patrick’s failed casino bill from 2008 in which the state would auction off licenses to the highest bidder.
“What I’m saying is we shouldn’t give them to the tracks by right, but auction them off,” he said. “There’s value to those licenses. There are definite advantages to locations like Suffolk Downs or the tracks down south. They already have the parking, the access and the infrastructure.”
Cahill’s plan would also tax the slots at a much lower rate than most states tax slot machines. He proposes a 27 percent tax, whereas Twin Rivers in Rhode Island taxes at 60 percent and most other states tax at 40 to 60 percent.
By doing that, he said, he estimates that with 3,000 slots per location, the state could realize $200 million to $240 million per year in revenues. He added the state could also realize as much as $2 billion for the one-time auction of slot licenses.
One key, he said, is to keep the taxes on the machines low.
“The more they’re taxed, the less likely you’ll get upfront money,” he said, “and the less likely you would get development around the slot parlors.”
Cahill said he is making the proposal because he is the administrator of the state lottery, and the lottery has been declining in revenues for the past couple of years.
Some have said he is proposing the measure because he has expressed an interest in running for governor and is trying to one-up Gov. Deval Patrick leading up to the 2010 gubernatorial election.
Cahill denied that, adding he is only concerned with declining lottery proceeds, even going so far as to include a provision in his slots plan that would privatize the lottery.
“I am also open to the idea of privatizing the lottery,” he said. “If we have private slot parlors or casinos, it makes sense to have a privately run lottery. That may be the best way to protect the revenue stream.”
In Revere, Mayor Tom Ambrosino said he would favor the proposal as long as it includes expanded gaming in Revere. “I’m strongly supportive of expanded gaming in whatever form the state wants to propose it,” he said. “Whether it’s the treasurer’s plan, the governor’s plan or the Legislature’s plan, I support it.”
Likewise, in talking with the City Council on Monday, State Sen. Anthony Petruccelli (D-Eastie) said he has been a longtime supporter of slots and is ready for another debate on the issue.
“I have always supported slot machines at racetracks, theoretically and philosophically,” he said. “What would that look like at our racetracks? I don’t know…There’s an opportunity I believe, but I don’t know when that might be.”
At the tracks, Wonderland CEO Dick Dalton said he is sitting back and waiting to see what happens with the latest slot machine discussion.
“I think at this time we have a new speaker of the House, and it will be an open and vigorous debate,” said Dalton. “Obviously, there’s a bunch of ideas floating around, and all of it is helpful. Even if people don’t agree with the treasurer, there is discussion, and that keeps the issue upfront.”
However, Dalton warned that the state had better take a good look at what has worked and what hasn’t in other areas of the country.
“Look around at other states, the auction process is not one that has worked,” he said. “You also have to have the right balance between the tax rate and the number of machines. Overtaxing is something people can look at short-term that would be harmful to us in the long run. The lower tax rates produce far more employment and far more investment. The advantage Massachusetts has now is it can look at a number of states and see what’s worked.”