Massachusetts: Ensuring the Nation’s “Best” and Most Rigorous Regulations By Ken Adams March 26, 2014 at 9:46 pm Massachusetts came late to the gambling game. Actually, Massachusetts is not quite there yet; it is still in the process of getting into the game. The fact that Massachusetts is so late entering into casino gaming might lead one to think the process in the Bay State would be easier than in other states. After all, Massachusetts has the benefit of the experience of thirty-eight states with casinos and an 80-year national history of regulated gaming to use as a model. It should not be necessary to spend a great deal of time devising regulations, licensing procedures, taxation, fees or regulatory enforcement mechanisms. Any interested state could just pick a state or several states with casinos and use those regulations as models for their own. What could be easier? That might be true for some states, but not for Massachusetts. Besides coming late to the game, Massachusetts came with a different attitude, an attitude of elitism and superiority. Massachusetts became interested in casino gaming because of the Great Recession. As it did in most states, the recession led to a search for added tax revenues and in that search lawmakers hit upon casinos as a plan, On November 22, 2011, Governor Deval Patrick signed Chapter 194: An Act Establishing Expanded Gaming in the Commonwealth. The legislation was designed “to provide significant benefits to the Commonwealth by advancing job creation and economic development.” Massachusetts was going to allow casinos because the state needed jobs, economic development and tax revenues. That is not terribly different than the rationale used by Nevada in the 1930s or New Jersey in the 1970s. Their act, however, attempts to set Massachusetts apart from other states. The Massachusetts act divides the state into three zones with a casino resort in each and another type of license for a slots only casino. It establishes fees, taxes and a set of basic principles, including: “a transparent and competitive bidding process, maximum long-term value to the Commonwealth, protection for host and surrounding communities, mitigation for social impacts and costs and ensuring the nation’s best and most rigorous public safety, regulatory and enforcement mechanisms.” Note that the act calls for the best and most rigorous policies in the nation. It also establishes a gaming commission to oversee the process. It was the commission’s job to write the regulations, put the detail into the act’s general framework, do background checks and grant licenses. The commission has been very diligent in fulfilling its mandate. It has not followed other states, rather it seeks to carefully examine each issue and find a unique “Massachusetts” solution. The purpose of the Massachusetts Gaming Commission is “to create a fair, transparent, and participatory process for implementing the expanded gaming law.” There is nothing controversial here. However, the real mission of the commission is found in the language of the act: “a transparent and competitive bidding process, maximum long-term value to the Commonwealth, protection for host and surrounding communities, mitigation for social impacts and costs and ensuring the nation’s best and most rigorous public safety, regulatory and enforcement mechanisms.” Each of the words in the act has been interpreted by the gaming commission in the strictest sense possible. After three years, only one license – the slots only license, has been issued. That casino hopes to open in 2015; it will be at least 2017 before any other casino opens – six years after the act was signed into law. Now, the commission after spending three years working on the first half of that sentence, has moved into the second half of the sentence, the social impacts portion. On Friday, March 21st the commission issued a 21-page proposed set of regulations to cover “mitigation of social impacts.” It is filled with detailed procedures covering every aspect of casino activity; the intent of proposal is to limit gambling activity in an effort to protect gamblers from their potentially compulsive nature. The proposal got no coverage from the press and might have escaped noticed if not for the American Gaming Association. The AGA read the proposal and responded with a letter to the gaming commission. The AGA agrees that compulsive gambling is a serious issue and should be taken seriously. But, the AGA would like the commission to slow down and consult with the AGA and the industry, arguing that the wheel does not have to be reinvented and anecdotal evidence is not scientific evidence. AGA Voices Concern with Draft “Responsible Gaming Framework” Massachusetts (expansion) – Stephanie Chan, AGA – Launching a new effort to inform state-level gaming policy, American Gaming Association’s (AGA) President and CEO Geoff Freeman submitted comments to the Massachusetts Gaming Commission on Friday regarding its proposed draft “Responsible Gaming Framework.” AGA’s comments were critical of the Commission recommendations that ignored prevailing best practices. “The Massachusetts Gaming Commission draft recommendations seem to value anecdote and inclination over proven science,” said Freeman. “Not only are these proposals unlikely to aid vulnerable populations, they are likely to negatively impact the playing experience of the more than 97 percent of the Americans that gamble responsibly. We hope to have the opportunity to work with the Commission to meet our shared goal of protecting those in need.” American Gaming Association, 3-25-14 The proposed regulations are different from any other compulsive gaming controls, but, they are not terribly different from accounting regulations. They resemble Nevada’s internal control regulations. In Nevada, all casinos submit to the gaming control board a plan of internal controls; the plan describes in great detail how the casino plans to adhere to Nevada accounting regulations. That plan is then used as a measure of the casinos’ compliance with the regulations. That is what the proposed regulations would require for compulsive gambling controls; a detailed plan to be approved by the state, an internal department to audit the plan and a state division to audit casino compliance. Given its way, the commission will impose a procedure that unnecessarily complicates the operation of a casino, adds significantly to cost of operations and artificially limits a player’s ability to play. I don’t wish to suggest that it is inappropriate to have some process for identifying and helping compulsive gamblers – it is appropriate and necessary. But as the AGA points out, there is a great deal of research available on the subject and some very good models that could be used for that purpose. However, that is not the Massachusetts Gaming Commission’s way. The commission seems to believe the way to best and most rigorous in the nation requires a unique solution to each issue. I would argue that the commission is not on the road to best, but rather on a path of overkill, excess and waste.