Massachusetts legislature compromises on casino subsidies

The Massachusetts legislature passed a compromise casino-gambling bill on Wednesday that reduced subsidies to the racing industry just hours after a conference committee cut racing in on a share of proceeds from the three casinos allowed in the legislation.

The state’s House and Senate passed the bill after reducing the racing industry’s share of the casinos’ net gambling revenue from 5 percent to 2.5 percent. A conference committee that had ironed out differences between two bills that had earlier passed in each house of the legislature had added the 5 percent share on Tuesday.

The bill legalizes three free-standing casinos and one slots parlor. The legislation that had previously passed the legislature had cut the racing industry in on 9 percent of the net gambling revenue from the slots parlor, but had not earmarked any of the proceeds from the casinos. The final version that passed Wednesday retained the 9-percent take from the slots parlor, along with the additional 2.5 percent from the casinos.

Suffolk Downs, which has a partnership with Caesars World to develop a casino, has indicated that it will apply for one of the casino licenses. If the legislature had not added the racing subsidy from casinos, Suffolk could have potentially been the only racetrack-casino in the United States that did not provide subsidies to its racing operation.

Gov. Deval Patrick has indicated that he supports the legislation. It was unclear, however, if Patrick would have signed the bill if the racing subsidy from casinos remained at 5 percent. The Boston Globe had published an editorial in its Wednesday edition that was highly critical of the racing subsidies.

Casinos are not expected to be up and operating in Massachusetts until at least late 2012. The bill requires the state to set up a gambling commission that will craft rules for the casinos and review bids for the available licenses.