PHILIP MARCELO, Associated Press
BOSTON (AP) — In a rarely used strategy to address gambling addiction, Massachusetts regulators may require casinos to reward their customers for voluntarily setting limits on how much time and money they spend at slot machines.
The state’s recently licensed casino companies — Wynn Resorts, MGM Resorts International and Penn National Gaming — have voiced strong concerns over the proposal, suggesting such programs have not proved effective elsewhere.
The programs, sometimes called play management, limit-setting or pre-commitment programs, are in place in New Zealand, Singapore, Norway, Sweden and Canada. Australia has piloted a limiting system in four of its states. Massachusetts would be the first in the U.S. to attempt such a program, according to casino and state officials.
Stephen Crosby, chairman of the Massachusetts Gaming Commission, said giving gamblers the option to monitor and limit their spending is no different than calorie counting or setting limits on how much alcohol to keep in a home.
“Settling limits on activities which might get us in trouble is a reasonable and commonplace activity,” he said in a letter sent this month to the state’s three casino operators, stressing he hasn’t yet made up his mind on the issue.
Casino executives, addressing the commission yesterday, said research has shown that such programs do not work — a point that regulators disputed.
The American Gaming Association, the industry’s trade group, noted in a letter that the Canadian province of Nova Scotia discontinued its limit-setting program in September after nearly nine years, citing low usage and declines in gambling revenues.
“It has failed,” said Alan Feldman, an executive vice president for MGM, which is building an $800 million resort in Springfield.
Stop Predatory Gambling, a D.C.-based nonprofit, supports the play management idea, saying it would help mitigate the lure of slot machines, which the group says can be addictive.
“Electronic gambling machines are built mathematically so users are guaranteed to lose their money the longer they play,” the organization said. “It is an absolute mathematical certainty that citizens will lose all of their money the more they continue to use the machines.”
Jay Snowden, chief operating officer for Penn National Gaming, which is building a $225 million slots parlor at the harness racing track in Plainville, said his company is concerned there isn’t enough time to roll out the system before its planned June opening.
He suggested the state pilot the program before making any long-term commitment. MGM’s and Wynn’s casinos are expected to open in 2017 or later.
The commission took no action on the proposal yesterday.
Casino executives said they oppose enrolling slot machine players automatically and giving them an option to decline participation, as a commission consultant has recommended.
They warned such a “mandatory” arrangement might turn off customers, making their facilities less competitive and jeopardizing the $300 million to $500 million in annual tax revenues Massachusetts is anticipating from the new industry.
“If we make the experience difficult, cumbersome or embarrassing for our slot customers, I do worry that they will make another choice and go somewhere else,” said Robert DeSalvio, who is overseeing Wynn’s $1.6 billion casino project in Everett.
The executives also objected to a recommendation that the casinos provide incentives to customers who sign up for the voluntary program and stick to their predetermined limits.
“If someone has a problem, the absolute worst thing we can do as an industry is give them an incentive that might actually (get) them to come back for a future visit,” DeSalvio said.
Meanwhile, MGM Resorts International and Wynn Resorts Ltd. announced plans yesterday to take on at least $1 billion in debt to help pay for new casino-hotel developments in Massachusetts and cover other incidental costs.
The two Las Vegas-based casino companies disclosed their plans in separate financial filings with federal regulators.
MGM Resorts said it planned to issue $1 billion in notes due in 2023 to pay for a variety of costs including the construction of its $800 million MGM Springfield project in Massachusetts and $1.2 billion MGM National Harbor development in Maryland, as well as pay off old debt due next year. That amount was later boosted to $1.15 billion by yesterday afternoon.
Wynn Resorts said its Wynn America subsidiary has secured a line of credit worth $375 million and a loan worth $875 million to cover some of the costs, including construction, of its $1.6 billion casino-resort near Boston.
Fitch Ratings was upbeat about MGM’s announcement.
Analyst Michael Paladino said in a report to investors that the funding would bode well for the company’s overall financial position as it looks to develop $5 billion worth of casino-hotel projects, including those in Maryland and Massachusetts as well as Macau.
PHILIP MARCELO, Associated Press