Showdown: Patrick won't sign gambling bill, DeLeo doubts veto

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By Jim O'Sullivan, Michael Norton and Kyle Cheney, State House News Service
Jul. 31, 2010

Gov. Deval Patrick withheld support Friday for a three-casino, two-racino compromise reached by legislative leaders in time for a vote Saturday, calling the restriction of the racino license bidding to racetracks unacceptable.

"Unfortunately, they have sent me something which I cannot support," Patrick said, saying he wanted lawmakers to alter the compromise Saturday by reducing the number of slot machine facilities and opening the slots licenses to a wider bidding market. He said that the decision by the Suffolk Downs and Wonderland joint venture to seek a casino license rather than the slot rights essentially left the bidding prescribed in the agreement to two tracks, Raynham Park and Plainridge Racecourse.

Patrick's resistance - coming a day after he said he would support one slot machine facility if lawmakers passed major bills that were on the move late Friday - could thwart the Legislature's labor-intensive efforts to allow the historic introduction of a new industry.

The governor drew a swift rebuke from House Speaker Robert DeLeo, the bill's biggest proponent.

"Governor Patrick says he won't support the bill because it doesn't include everything that he likes," DeLeo said. "This is despite the fact that the four currently-licensed gaming facilities will have to compete to receive one of two slots licenses, where gaming already takes place."

"I find it hard to believe that Governor Patrick will veto 15,000 jobs and the prospect of immediate local aid funds for cities and towns," DeLeo said. He told WBZ radio host Dan Rea the Legislature would take up the legislation as produced by the conference committee, according to a transcript of the show provided by DeLeo's office.

"That's the governor's prerogative, and we'll just have to continue to work to see where we end up," said Senate budget chief Steven Panagiotakos.

Pointing to the Senate's 25-15 vote in favor of a three-casino, no-racino proposal last month, Panagiotakos said the bill would likely clear the Upper Chamber.

"There's going to be some shrinkage, but we might get some additions, too, so we'll see where it ends up," he said, moments after lawmakers filed the conference reports with clerks, evidently in time to meet an 8 p.m. deadline. "It should be all right."

The compromise was filed in two parts, one a policy measure and the other containing appropriations language, a split that appeared designed to force Patrick to decide between vetoing or approving all the proposed facilities. He could make targeted changes to the appropriations bill, members said.

Patrick aides said the governor could send the Legislature amendments to the bill, which would likely require two-thirds votes in both chambers to return in formal sessions to take up. An aide said Patrick had informed legislative leaders of his decision late Friday. A midnight Saturday deadline cuts off formal legislative sessions for the year, likely preventing a potential override vote and likely votes on amendments unless lawmakers suspend those rules.

Regarding a potential special session, Senate President Pro Tempore Stanley Rosenberg said, "There's been no discussion that I've been part of."

Patrick pointed to lawmakers' inability to reach an agreement earlier in the session, saying, "They have waited until the last minute to come to terms." He added, "If it's crunch time, it's not because I put us in crunch time, it's because they have."

Conferees said the accord preserved controversial Senate language restricting local referenda on casinos in the state's largest cities to individual wards, rather than the whole city. That carve-out was championed by Sen. Anthony Petruccelli, who represents the district housing both Suffolk Downs and Wonderland, which have entered into a joint venture with hopes for a casino. DeLeo also represents the area.

DeLeo said he had tried to persuade Patrick by arguing for the jobs and revenue the speaker said would be created and saved through the bill.

"Hopefully he'll take that into consideration in the days ahead in making his decision on what he'll do with this bill," DeLeo said.

The compromise sanctions two slot machine licenses open to competitive bidding limited to the state's four racetracks and three casinos split by geographic region, while empowering the governor to negotiate with Native American tribes to settle their legal claims before casino licenses are bid.

Casino licenses would go for $85 million. Two-tiered slots licenses would fetch $20 million and $25 million, respectively, contingent on the number of machines.

The gambling breakthrough requires casino operators to spend $600 million to qualify, with $100 million for slots licenses allowing for 1,000 machines and $125 million for facilities with 1,250 machines. The higher racino threshold applies only if the licenses are in different regions.

From the licensing fees, $100 million would go to the state's main savings account, $77.5 million would go to a local aid reserve account, $20 million would pay for gambling mitigation programs, and $20 million would fund a regulatory commission's launch. According to a summary of the bill, the destination of another $77.5 million was to be determined by the House.

All annual revenues from slots would go toward local aid. Of the remaining gaming revenues, 30 percent - estimated at roughly $120 million - would fund local aid, 60 percent would be split evenly among education, economic development, savings and debt reduction, and the remainder would go toward community, social and cultural economy mitigation.

The bill also extends the tracks' simulcasting privileges for three years.

Triumphant lawmakers gathered in the Senate Reading Room after 6 p.m. Friday to hail the deal.

DeLeo said the bill would generate "immediate local aid."

Proponents predicted 15,000 jobs would result from the bill, in addition to construction jobs, along with $300 million in onetime licensing fees and annual net revenues of $400 million for the state.

"My concern has always been for the workers who struggle each and every day to make a living," DeLeo said of the racinos. "These venues will save jobs."

Describing "a very long road," Senate President Therese Murray said she was thankful the legislation included competitive bidding and required substantial capital investments from the tracks: "What I didn't want was a box with slots."

Labor leaders were on hand for Friday's presser to urge Patrick to sign the measure.

Critics of the bill gathered in the House clerk's office shortly before 8 p.m. to watch the report being filed.

A potential procedural hurdle for the bill emerged late Friday when the Senate recessed its session, meaning no new calendar for the chamber's Saturday docket would be printed. Without a calendar, any bill that comes up for action would require two-thirds support.

While he was unsure of his prospects, House expanded gambling opponent Rep. Matthew Patrick said he planned to attempt a filibuster in the final hours of formal sessions Saturday in an attempt to kill legislation that would launch Massachusetts into a new era of casinos and racetrack slot parlors.

"I guess you could call it that," Patrick, a Falmouth Democrat, told the News Service as legislative leaders mobbed the Senate Reading Room to outline their eleventh hour agreement on the bill. "I'll try to prevent it from happening."

"There's not enough time to read the bill," Patrick added. "The impact is too important on the state."
Patrick said he is working with anti-expanded gambling forces in the Senate, where lawmakers mounted a weeklong resistance to legislation that ultimately cleared that branch.

If his efforts are unsuccessful, he said, he wanted the governor to veto the bill.

Rep. Patrick said state officials should allow the economy to continue its growth by "traditional" methods, noting the addition of 45,000 jobs in recent months and a report out Friday that the state economy grew almost three times faster than the national economy in the second quarter.

"As far as I'm concerned it's a scam," the Falmouth Democrat said of expanded gambling. "It will do more harm to the families of the Commonwealth than good."

Republican state Rep. Paul Frost described the bill as "a bipartisan effort to create jobs," and praised the negotiating panel as an unusually inclusive one that granted input to GOP members, not a guarantee in most Beacon Hill conference committees.

"It was wide open, it was inclusive, and I appreciate that," Frost said during the press conference.

The bill would create special State Police and attorney general's office units to enforce gambling laws.

The regulatory commission would be run by appointees of the governor, attorney general and treasurer, with required experience in law enforcement and finance, "among other areas," according to the summary.

Rosenberg said he believed tribal gambling rights would likely come to pass, calling the regulatory commission a means of controlling that expansion.

Gambling facilities would have to enter into compacts with host communities and "any other impacted communities," the summary said.

Although DeLeo described an "immediate" revenue infusion from racetrack slot parlors, chief House negotiator Rep. Brian Dempsey said the earliest gambling revenue would arrive from operational slot facilities at racetracks would be "a year, a year and a half."

Asked about the effect of slot parlors on the state lottery, Dempsey said earlier studies could not be applied to Massachusetts because they focused on states that had at least 8,000 machines, far more than would be authorized under the Massachusetts proposal. He said the introduction of racetrack slots would have a "manageable effect" on the lottery.

Dempsey, asked about whether gambling facilities depend on addiction to make money, pointed to lawmakers' decision to commit funds to addiction services and noted that Massachusetts residents regularly visit Connecticut and Rhode Island casinos, and spend billions of dollars a year on lottery tickets and Keno.

"The vast majority do not have addiction problems," he said.

In a statement, Treasurer Timothy Cahill said, "I'm pleased that the House and Senate have compromised and reached a tentative agreement on the casino bill before the end of this legislative session. I've been a proponent of expanded gaming since I proposed it in May of 2007. If the Governor had displayed leadership, given his support on expanded gaming, we would have already created thousands of jobs and brought much-needed revenue to cities and towns over three years ago. I urge the Governor to sign this bill immediately and not play politics with our economy."

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