Should distribution of gaming revenues be changed to help fund Mass. state budget?

BOSTON — Several state accounts supported by gaming revenue and designed to combat the public health and economic impacts of gambling may be in jeopardy under budget proposals from the Governor’s Office and the state House of Representatives.

The House passed a $58 billion budget for fiscal 2025 at the end of April, which would boost spending by 3.3% over the current year.

Gaming revenue distribution currently follows a system laid out by the Gaming Act of 2011. Doug Howgate, president of the Massachusetts Taxpayers Foundation, said it’s time to reassess the way revenue is distributed.

Gov. Maura Healey and the Senate Ways and Means Committee have called for freeing up $100 million in gambling revenue to spend on the fiscal 2025 budget, while the House would free up $79.7 million, according to the State House News Service.

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“This year’s proposal moves more of those resources into the (state) budget,” Howgate said. “I think that there could be some real value to that, especially as the state faces some more uncertain fiscal times.”

Massachusetts has three casinos —Encore Boston Harbor in Everett, MGM Springfield and Plainridge Park Casino in Plainville.

Plainridge is unique in that it has the only live harness horse race track in the state, and that it's only authorized for slot machines and electronic table games.

Horse race purses at Plainridge rely heavily on state tax revenue

Bob McHugh, president of the Harness Horsemen's Association of New England Inc., said horse race prize pools, or purses, rely heavily on state tax revenue, and a cut to funding could mean a 90% drop in available prize money.

“It costs a lot of money to bring a baby up from the time that foal is born to when it's in the races,” he said. “You could be talking $100,000 just to bring it to a race.”

Gaming laws carve out a designated state account called the Horse Race Development Fund. Eighty percent of the account goes toward purses, 16% goes to breeding farms and 4% to health and welfare benefits for racers.

While Encore Boston Harbor and MGM Springfield are considered Category 1 casinos, Plainridge Park Casino is a Category 2 casino, which limits the number of slot machines on the property to 1,250.

Expert: Redirecting purse money makes breeding not 'economically feasible'

According to the Massachusetts Gaming Commission, Healey’s budget would reduce Category 1 tax funding to the Horse Race Development Fund by $6.4 million. The usual 9% of Category 2 tax revenues from Plainridge Park Casino toward the HRDF — which totaled $13.5 million in 2023 — would also be redirected to the Gaming Local Aid account

Reducing purse money would make breeding no longer “economically feasible,” McHugh said, as racehorses can cost roughly $20,000 to $25,000 annually between training and land maintenance. He said his organization works with about 40 trainers in Massachusetts and other states.

“The breeding business would fade … and in turn, those farms would probably be sold,” McHugh said. “We would be done.”

While the state generated $14 million from horse race taxes in 2023, taxes from slot machine revenue at Plainridge Park Casino were more than four times that amount at $62.2 million, according to the MGC.

A bill proposed by state Rep. Jeffrey Roy, D-Franklin, would enable Plainridge Park Casino to host up to 30 live table games as well as an additional 250 slot machines.

Roy said adding table games would allow the casino to capture revenue from gamblers that would otherwise go across the state lines.

“Having that facility (Plainridge Casino) close by is advantageous,” he said. “There are hotels in our area that are generating business from that, restaurants in that area that are generating business from having these visitors come in.”

Rachel Volberg, a research professor at UMass Amherst, said adding table games may not even drive additional revenue — as the casino already has electronic table games — and it’s more of a matter of convenience for patrons.

The House budget would also redirect approximately $16 million away from the Community Mitigation Fund, which helps communities “in offsetting costs related to the construction and operation of a gaming establishment.”

Mansfield police chief seeks to fund crime analysis unit

Mansfield Police Chief Ron Sellon said his department is looking to fund its crime analysis unit by using Community Mitigation Fund money to measure the impact of the casino on local crime and quality of life.

According to the department’s grant application, police response to hotels and motels in close proximity to Plainridge has increased, and the department needs money to pay overtime to monitor and respond to incidents.

“Every community is stretched for every dollar right now,” Sellon said. “Mansfield is no different than any other community in the fact that we have our own fiscal challenges.”

Specifically, he said the department has been looking at whether there’s been an increase in human trafficking, but COVID-19 left a “dead spot” with its data.

Sellon said while increased incidents may be correlated with the introduction of the casino, the department cannot say for sure without further analysis.

“We need to be mindful of the obvious addiction-related issues that are associated with (the casino),” he said. “We also need to be mindful of the fact that … various things tend to operate in the orbit of casinos and gambling that are crime-related.”

Legislator calls proposed cut to Public Health Trust Fund 'concerning'

Under Healey’s budget proposal, the 5% of gaming revenue to the Public Health Trust Fund would be reduced to 2.5%. According to the MGC, this change would mean $6.4 million less for the funding the prevention, treatment and research of problem gambling.

State Rep. Adam Scanlon, D-North Attleborough, called the proposed cut “concerning.”

“We should never be cutting that fund for any reason,” he said. “It's pretty clear that a rise in problem gambling is on the horizon.”

A Massachusetts Executive Office of Health and Human Services spokesperson said no programs would be cut under the governor’s proposal, as there is already enough money in the fund to continue the current level of services. The fund has a balance of $28 million, the spokesperson said, and the governor’s budget would still add a projected $7.5 million.

A recent study by the Social and Economic Impacts of Gambling in Massachusetts, a UMass Amherst research project funded by MGC, found that 1.4% of Massachusetts residents were considered problem gamblers, while an earlier study in 2013 found that 2% of residents were considered problem gamblers.

“I think people were still surprised that we have three casinos in Massachusetts and we haven’t seen a significant increase in problem gambling,” said Volberg, noting that SEIGMA is the world's longest ongoing gambling study.

She said men under age 65 and people of color are most likely to experience a gambling problem, but unlike other places Volberg has studied, problem gamblers in Massachusetts are not significantly younger than the rest of the population.

Spending from the Public Health Trust fund is split, with 75% going toward the Office of Problem Gambling Services and 25% going toward MGC for research.

Scanlon said more money from the Public Health Trust Fund needs to be spent on treatment as opposed to prevention, especially in areas that are economically disadvantaged.

“You’re seeing millions of dollars being spent on consultants around communications and things of that nature,” he said. “Whereas our local treatment centers in the most economically disadvantaged areas, they don’t have the staff and the people they need to accommodate the rise in problem gaming.”

The Office of Problem Gambling Services reported it spent $7.8 million on prevention and $1.95 million on treatment in 2023. Prevention items included communication campaign spending and community initiatives.

Marlene Warner, president of The Massachusetts Council on Gaming and Health, a nonprofit that helps protect consumers from gambling-related harm, said while there is a “strong” variety of responsible gambling services," the state does not have “robust” treatment services.

Warner said her organization is looking to expand the number of languages in which its materials are available, as well as develop “culturally relevant approaches” to intervention.

“In terms of problem gambling services, I’d say we’re fairly weak,” she said. “I think there’s a lot more we can be doing for folks who are currently struggling with a gambling disorder.”

In addition to its advocacy, the council operates GameSense Info Centers in casinos, which informs gamblers on how casino games work. The Council on Gaming and Health received $2.92 million from the Public Health Trust Fund in 2023.

The Senate published its Ways and Means budget on May 7, which allocated 5.5% toward the Public Health Trust Fund but left out funding from Category 1 casinos for the Community Mitigation Fund and Race Horse Development Fund.

Scanlon said he's not against gambling, but that state regulation helps provide programs and structures for individuals to seek support.

“I don’t think anyone envisioned the plethora of ads that people see on a daily basis from sports betting, for example,” he said. “It’s a moving target, and we have to figure out ways and strategies to sort of combat that issue alone, but there are many issues.”

This article originally appeared on The Milford Daily News: Healey, legislators want to tap gaming accounts for fiscal 2025 budget