Casino Tax Benefits Bring $1 Billion to Massachusetts
It’s been 11 years since commercial gambling became legal in Massachusetts after the passing of the Expanded Gaming Act in 2011. The bill authorized three destination resort casinos and a slots-only facility, allowing the destinations to take real money bets on games of chance. After more than a decade of legitimate commercial gambling, the state’s decision has proved beneficial. Massachusetts casino tax benefits given to the commonwealth have now exceeded $1 billion, a pay-off from what was a gamble on commercial casinos.
A Billion Dollars from 11 Years of Commercial Gambling
Governor Deval Patrick (D) signed the Expanded Gaming Act in 2011, opening doors to commercial real money casinos. Massachusetts gambling and casino law MGL c.23K permitted three destination casinos and one slots-only casino. Today, Massachusetts hosts two destination casinos; Encore Boston Harbor and MGM Springfield. The city is also home to the Plainridge Park slots-only parlor. According to the Massachusetts Gaming Commission (MGC) chair Cathy Judd-Stein statement, the three gaming properties have collectively provided more than $1 billion in gaming taxes to the commonwealth. The figure is for total taxes and assessments over the last 11 years.
One More Commercial Casino License Still in MGC’s Possession
The Massachusetts Gaming Commission possesses one online casino license for the final destination allowed within the Expanded Gaming Act. Only casinos from the southeastern region will receive the permit, but MGC is holding on to the license because of market saturation concerns from nearby Rhode Island. The Massachusetts tribe is also building a gaming property in Taunton, so the commonwealth will have to make do with tax revenue from existing destinations. Once everything is resolved, another destination in the southeast could translate to bigger tax revenue for the following years.
Tax Revenue Benefits Massachusetts Economy
The $1 billion+ collected from casinos operating in Massachusetts benefits the local economy. According to a statement from the MGC Chair, the revenue bolsters local aid and funds transportation and infrastructure projects. The funds are also used to back important community mitigation initiatives. Ultimately, the health and safety of the industry and everyone involved in it remain the top priority. The tax revenue is set to increase with population increase and return to normalcy after the pandemic.
Industry Success Post Expanded Gaming Act
Since the enactment of the Expanded Gaming Act, Massachusetts has seen growth in commercial gambling activity and revenue. Plainridge Park was the first casino to open after the act, and slots became available at the horse racetrack as early as June 2015. However, MGM Springfield would become the first destination casino to open in the city. This happened in 2018, and it only took a year for Encore Boston Harbor to open in June of 2019. Both destination casinos paid the $85 million license fee, $60 million more than the one-time $25 million Plainridge Park paid for its slots parlor license. Once the licenses became effective, the casinos were liable for taxes. Encore and MGM both pay gross gambling revenue (GGR) of 25%, while Plainridge pays 49% tax for slot profits.
Pandemic and Post-Pandemic Rebound
The pandemic affected all industries, especially brick and mortar destinations like the land-based casinos in Massachusetts. Most destinations have been operating at below-normal levels for a long time, but recent times have shown remarkable promise. All three casinos are nearly back to pre-pandemic levels, according to the February GGR figures announced by the MGC. The gross gambling revenue for the previous month was $85.5 million, which is just shy of the $86 million all three casinos generated (won) in February 2020.
Encore Boston Harbor still dominates the gaming industry in Massachusetts and won $54/7 million in the last month. It was followed from a distance by MGM, which generated $19.9 million, and Plainridge came third at $10.9 million. The pandemic benefited online casinos, which became the ideal destination for punters seeking real money games. Lucrative casino bonuses from sites like CBN make it easy for players to join online destinations instead of land-based platforms. However, Massachusetts casinos are nearly back to normal operations after the long pandemic and decline in business.
Massachusetts Could Soon Have Sports Betting
The entire buzz is currently about the $1 billion threshold set for tax revenue collected over the past 11 years. However, Massachusetts is set to have another gaming tax generator if the current legislative discussions around sports betting materialize. Sports betting talks are ongoing in Boston. If sportsbooks become legal in the commonwealth, the expansion will undoubtedly increase gambling tax revenue. However, it’s too early for state lawmakers to project new tax income from sports betting before the scene materializes. Bookmarking is also a low-margin gambling business with minimal tax revenue than slot machines and table games.
There are no doubt casinos have boosted tax revenue in Massachusetts, and the figure has eclipsed a billion dollars since 2011. With business rebounding after the pandemic and sports betting prospects, the gambling revenue is poised to increase. The larger percentage of the income is often allocated for local aid, which translates to more development and better services for the residents of Massachusetts.
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