On Politics
2:46 pm
Fri July 11, 2014

Scott MacKay Commentary: The R.I. And Mass. Casino Conundrum

It’s election year in Rhode Island. RIPR political analyst Scott MacKay parses the one issue that never goes away in our small state – casino gambling.

Slots are the only attraction at Newport Grand, but a group is trying to bring table games to the casino.
Slots are the only attraction at Newport Grand, but a group is trying to bring table games to the casino.
Credit RIPR FILE

There’s an old gallows humor joke about banks and creditors. If you owe the bank $30,000, the bank owns you. If you owe the bank $300 million, you own the bank.

This pretty much portrays Rhode Island’s relationship with the state’s two legal gambling emporiums, the Twin River Casino and the foundering Newport Grand video slot parlor.  When state-sponsored and promoted gambling grows to the third largest source of state revenue, the gambling companies are going to get about everything they want from the Smith Hill gang.

In the legislative session that just ended, Twin River was granted the right to issue credit lines of up to $50,000 per gambler and to serve alcohol from 6 a.m. until 2 a.m. on weekends, as well as on evenings before state and federal holidays. Lawmakers also voted to hold  yet another statewide and local referendum on turning Newport from its current reliance on one-arm bandit slots into a full-fledged casino with table games.

Former Republican Gov. Lincoln Almond, the last true opponent of state sponsored gambling to hold the second-floor office at the Statehouse, was prophetic with his warning before the 1994 Narragansett Indian tribe West Warwick casino vote. ``Once you go down the casino path, there is no turning back,’’ said Almond.

Rhode Island’s gambling policies have been complicated by Massachusetts government’s 2011 decision to jump on the casino gravy train. Gov. Deval Patrick and Bay State lawmakers set up an elaborate strategy to ensure that licensing casinos in their state would be a rational process. Restrictions were placed on political influence and what looked like strong provisions to ensure that characters with shady backgrounds were not allowed in the business.

It hasn’t worked out that way.  How could it when so much money is at stake; the estimated revenue from a casino located in the Boston metro market is $750 million a year. The process has turned into a messy lawyer and lobbyist Lollapalooza replete with lawsuits, endless public controversy and what the Boston Globe’s casino reporter (old friend Mark Arsenault)  labels  a ``nose-wrinkling aroma of lurking felons and organized crime.’’

Now, Massachusetts voters will face their own referendum in November on whether to repeal the casino law. Globe polling shows the referendum to be close; which side you are on depends largely on socio-economics. Rich people don’t want casinos, poor people do.

In the very-strange-bedfellows politics of casinos, one has to wonder if executives of the two Connecticut casinos, Mohegan Sun and Foxwoods, are secretly rooting for repeal in Massachusetts. Both of those venues have applications pending to run casinos in the Bay State, but they might be better off with less competition for their Connecticut operations.

If Rhode Island’s history with casino votes is any guide, the Massachusetts ballots will break largely along demographic lines. All you need to know is that in 2006, the surgeons and bankers of leafy Barrington rejected a Narragansett tribe casino by a vote of 80 percent to 20 percent. In that same election, the factory workers and janitors of struggling Central Falls said yes to the casino by a 66 to 34 percent margin.

The view that there is a pot of gold at the end of the casino rainbow drives this industry. Three years ago, there were just two full-blown casinos in New England. Now, as many as eight are in the works. Casinos breed more casinos as states rush to poach gamblers from their neighbors.

Newport voters have long scuttled casino gambling. It’s an industry that doesn’t fit with Newporters’  image of their city as a destination that attracts tourists because of the Gilded Age mansions, the world-class golf courses, its foodie restaurants and shimmering beaches. Call it NIMBYism or snobbery, but many voters in a city rich in history and sailboats just don’t see it as a gambling mecca.

Now comes a new group led by former Providence mayor Joe Paolino that wants to pump millions into the tired Newport Grand slot parlor and add attractions more in synch with Newport’s other tourist venues, such as a Canyon Ranch-style spa.

Newport Grand is an old dowager badly in need of a facelift. It has morphed over the years from a Jai Alai fronton to a slot parlor. Time, neglect and competition from other gambling venues have taken their toll.  Income from the slot terminals has plummeted from about $80 million in 2005 to $40 million this year.

Paolino and his investors say they will go through with the sale and renovations only if Newport voters approve table games. There is also a sweetener for Newport homeowners. The new owners would pay the city host fees of about $6 million over the next six years.

Into this muddle are Rhode Island taxpayers. Wouldn’t it be nice if the next governor and lawmakers could develop some new businesses so that we could wean ourselves off the increasingly precarious gambling revenue.

P.T. Barnum said famously that a sucker is born every minute. Yet, do we really want to yoke Rhode Island’s economic future on luring more suckers?

Scott MacKay’s commentary can be heard every Monday on Morning Edition at 6:35 and 8:35 and on All Things Considered at 5:50. You can also follow his political reporting and analysis at our `On Politics’ blog at RIPR.org