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GREG DERR/The Patriot Ledger
George Carney, owner of Raynham/Taunton Greyhound Park, stands in a section of the park under renovation. Raynham/Taunton and other Massachusetts tracks hope to emulate the success of Lincoln Greyhound Park in Rhode Island, below, with casino-style gambling.

Racetracks and some legislators say slots in the tracks
would be a bonanza; others call it a ‘handout’

By TOM BENNER ~ Patriot Ledger State House Bureau -- 1-18-03

-- BOSTON

he state's four racetracks are on the fast track toward convincing at least some legislators that they are the quickest, cheapest, easiest way to introduce casino-style gambling to Massachusetts.

While some call it an industry bailout or an outright handout, top legislators say the four tracks have a big advantage over Las Vegas-style casinos as the state considers expanded gambling as a way to boost revenues.

“They have a leg up to the extent that for people who see this as a solution to the fiscal situation, this would allow a fairly quick source of revenues,” said House Minority Leader Bradley H. Jones Jr., R-North Reading.

Industry experts doubt that the tracks can survive for long, citing a decades-long decline in the popularity of racetracks. But if Beacon Hill allows them to install slot machines, the tracks stand to become thriving gambling operations - and their owners stand to make many millions in the process.

That’s exactly what happened in several other states that allowed racetracks to add slot machines. Just over the Massachusetts border, the Lincoln Park greyhound track in Lincoln, R.I., has enjoyed 10 successive years of double-digit growth since slots were added in 1992.

Some Massachusetts legislators buy the argument that turning the tracks into “racinos,” or racetracks with casino-style slot machines, is a likely scenario if the state opts to expand gambling.

“They are established, they own the real estate and they are generally in good locations - it’s not like anybody’s averse to that in the community,” said Sen. Michael W. Morrissey, D-Quincy, who co-chairs the committee that acts on gaming-related legislation. “It’s the quickest way to get the cash flowing into the commonwealth.”

Morrissey said he’d rather see racinos run by racetrack owners, who are used to dealing with gambling regulations, security and tax payments, than by newcomers in search of a host community, or by the state itself.

“Do we as a commonwealth want to get into managing more personnel and owning equipment, or do we want to sit back and take a percentage of the take?” he said.

Under several proposals before the Legislature, the state stands to pocket about half the gross income on slots at racetracks.

Massachusetts has two greyhound tracks, Raynham/Taunton Greyhound Park in Raynham and Wonderland Greyhound Park in Revere. In addition, there is the Suffolk Downs thoroughbred horse track in East Boston, and the harness-style Plainridge Race Course in Plainville.

George Carney, owner of the Raynham/Taunton track, is already making renovations in the hopes that Beacon Hill approves slot machines at racetracks.

“Eventually somebody’s going to have to see light at the end of the tunnel,” Carney said.

Ten years ago, Raynham/Taunton did $240 million a year in business, and paid $20 million in taxes. Today business is down by about half, and the track generates between $5 million and $7 million in taxes, Carney said.

GARY HIGGINS/The Patriot Ledger
 

Carney said his track can be converted into a racino in about three months, while approving, building a licensing a Vegas-style casino could take five years or more. In addition, racinos draw a tamer crowd than full-fledged casinos, with their high-roller areas and table games, Carney said.

“The average persons playing the slot machines are the old women, along in years, who take a bus and it’s the only out they have,” he said.

Wonderland owner Charles Sarkis makes far more from his thriving Back Bay Restaurant Group (which includes Joe’s American Cafe, Atlantic Fish Company, Paparazzi and Abe & Louie’s steakhouse) than from his greyhound track in Revere. But he sees huge growth potential with slots, and says instate businesses can be trusted to usher casino-style gambling into the Bay State.

“The tracks are all owned by Massachusetts businesspeople, we’ve been here, we pay taxes and we’re large employers in the community,” Sarkis said. “People focus on making the tracks rich or something, that’s not what we’re talking about. We’re talking about economic development, we’re talking about paying the commonwealth enormous amounts of money immediately and creating thousands and thousands of new jobs.”

Bob O’Malley, general manager of Suffolk Downs, estimates that each racetrack will have to invest between $35 million and $50 million to add slots.

“You can’t just plug this things into the wall,” said O’Malley, a Milton resident. “That’s the range of spending that’s going to happen, if you’re going to do this right and create an atmosphere that people are going to like.”

O’Malley believes racinos will detract less from the state Lottery than full-fledged casinos.

“Most of the studies point out if you put them into the existing destinations, you really don’t bother the Lottery,” he said.

Plainridge Race Course co-owner Gary Piontkowski argues that Massachusetts is losing money to Connecticut’s two casinos and the two slots emporiums in Rhode Island, Lincoln Park and Newport Grand Jai-Alai.

“You can raise taxes or raise revenues,” he said. “At this point we’re all taxed out. And this is a source of revenue that’s being chewed up by Connecticut and Rhode Island.”

The Rev. Richard McGowan, a professor of economics at Boston College who served on the recently concluded gambling study commission, noted another political plus for slots at the race tracks: two of the tracks, Suffolk Downs and Wonderland, fall within the district of Senate President Robert Travaglini, an East Boston Democrat.

“I think racinos are probably the first thing that would happen,” said the Rev. McGowan.

The world’s biggest casino conglomerates such as Park Place Entertainment and Harrah’s are lobbying lawmakers to approve full-fledged casinos. While they agree that racinos are a quick fix, casino industry sources say racinos lack the growth potential of casinos. They also argue that the state should take the highest bidder, with some casinos offering upfront money money in exchange for a casino license.

Larry Rasky, a local spokesman for Las Vegas-based Harrah’s casinos, acknowledges that racinos will generate quick revenues, but he sees a place for full-fledged casinos as filling a different niche, and generating more jobs and revenues.

“A company like Harrah’s is going to invest up to half a billion dollars if it comes into Massachusetts to launch this industry and put a major hotel complex alongside a casino,” Rasky said. “You’re just not going to get that kind of investment if you put slots in the tracks.”

Meanwhile, western Massachusetts lawmakers say it would be unfair to give slots to the racetracks - which are all in eastern Massachusetts - without allowing a casino operation out west.

Rep. Daniel Bosley, D-North Adams, said allowing racetracks amounts to a handout in the short term. But in the long run, he said, a racino cannot compete with a full-fledged casino.

“It makes those guys instant millionaires, but there’s a bigger consideration: Is it good social policy and good fiscal policy?” said Bosley, House chairman of the Legislature’s Government Regulations Committee, which decides the fate of gambling-related legislation. “If you do racinos, you’re going to do full-blown casinos, and that eventually hurts racinos, they’re not going to able to compete.”

Carey Theil of Grey2K USA, which sought to ban greyhound racing in Massachusetts three years ago, said permission to add slots to the state’s greyhound tracks amounts to an industry bailout.

“When the economy is strong, the dog tracks ask for tax breaks, and when the economy is weak, they ask for slot machines,” Theil said. “These wealthy dog track owners are constantly asking for handouts.”

Proponents of slots at racetracks include Rep. David L. Flynn, D-Bridgewater, who estimates that revenue from the slot machines would pump an additional $450 million to $500 million into the state’s coffers. He is the sponsor of legislation allowing 1,250 slot machines at each of the state’s four racetracks.

Rep. Ronald Mariano, D-Quincy, also said racinos have an immediate appeal as the state considers expanded gambling: “I think that’s definitely coming, at least with the slots at the tracks. You don’t have to do as much. It’s a quicker return.”

Paul Kelley, a co-owner of Ryan Iron Works, which sits next to the Raynham/Taunton track, said he’s all for the track expanding into a racino.

“I’m for it. They’ve got a business to run,” he said, adding that he expects that the coming of commuter rail service to the area would alleviate any traffic concerns.

Should the state approve slots at the four racetracks, existing federal law could allow the state’s only federally recognized Native American tribe, the Wampanoag tribe of Gay Head, on Martha’s Vineyard, to open a similar establishment, Morrissey said. However, the tribe would need legislative approval to open its own racino outside of Gay Head, Morrissey said.

Tom Benner may be reached at tbenner@ledger.com

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