Massachusetts state Rep. calls for casino revenue fund to be evenly distributed

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In Massachusetts, a bill that would require cities to share their take of tax and other related revenues from casinos with wards in those respective cities has been filed by State Rep. Bud Williams (pictured, below).

According to MassLive…

The Democratic member of the Massachusetts House of Representatives said that the $950 million MGM Springfield project had been supported by the entire city and “accordingly, the entire city should reap the benefits of equal funding with a concentration on public safety.”

PILOT arrangement:

Payments in lieu of taxes (PILOT) for Category 1 casinos, which includes Wynn Resorts‘ $2.5 billion Encore Boston Harbor currently under construction in the city of Everett and MGM Resorts International‘s hotel and casino complex situated in the heart of Springfield’s Metro Center, and property tax payments are targeted in Williams’ bill. Springfield has eight wards and Everett six.

Encore Boston Harbor has a planned opening date of June 24, 2019.

Each ward benefit equally:

Prior to the casino’s opening on August 28, 2018, Williams proposed that all city neighborhoods benefit equally from the estimated $25 million MGM Springfield will be paying the city annually over a 40-year period. The casino at the time having already made an upfront payment of nearly $14 million to Springfield for the 2019 fiscal year, Williams proposed then that each Ward receive $2.25 million from the tax agreement, according to WWLP.com 22News.

The representative of Massachusetts’ Eleventh Hampden state house district said that the bill’s intent is “to insure equal distribution of the gaming funds committed in the Host Agreement with MGM to each of the city’s Wards,” according to MassLive.

In a statement, Williams said…

“Each of the city’s neighborhoods should be protected the same way the downtown business district is being protected by our police department. Police sub stations will go a long way to insure safety in each of the city’s neighborhoods.”

Mayor response:

In response to that, Springfield’s Mayor, Domenic J. Sarno, reportedly communicated that all areas of the city are addressed in the current budget.

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Sarno added, “In preparation on the budget, there is consideration every year for the needs and services of every neighborhood in our city. Many of the projects that have been completed or underway across the city represent the concerns for every neighborhood.”

Revenue distribution:

MGM Springfield is taxed on 25 percent of its gross gaming revenue. Those revenues are apportioned to various specific state funds as determined by state law. Under the terms of its host community agreement, in lieu of taxes, MGM makes payments to the city of about $17.6 million annually.

Williams’ bill calls for equal distribution of funds among the precincts or wards to bankroll projects “that provide for public safety facilities and personnel; promote economic development; or improve infrastructure within each particular ward or precinct of that municipality.”

The bill also reportedly requires that the mayor submit a line item budget of host agreement funds for the city’s wards to the City Council.

Williams reportedly said he is confident that the Governor, along with his colleagues in the Senate and House, “will see the benefits of this legislation and move for swift approval.”

Declining GGR:

After reporting nearly $27 million in gross gaming revenue in its first full month of operations, the MGM casino reportedly generated $21.2 million in revenues in November, which was approximately $1 million below the $22.2 million recorded in October 2018, according to the Massachusetts Gaming Commission.

From its August 2018 opening through December 2018, MGM Springfield has paid $25,370,738.71 (pdf) (25%) in state taxes.