An Economic Fiscal and Social Analysis Carl Jenkins CPAABV Managing Director CBIZ Tofias Background Commissioned by the Greater Boston Chamber of Commerce and completed in 2008 Examined critical issues including ID: 449268
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Slide1
Casino Gaming in Massachusetts:
An Economic, Fiscal and
Social Analysis
Carl Jenkins, CPA/ABV
Managing Director, CBIZ TofiasSlide2
Background
Commissioned by the Greater Boston Chamber of Commerce and completed in 2008
Examined critical issues including:
Demand for casino gaming
Potential gaming revenue
Socioeconomic effects
Analysis and report are based upon:
Public data
Casino patronage and expenditure patterns in other states
Documented models and methodology
Interviews with policymakers and stakeholders
Forecasts and projectionsSlide3
Economic Impact
Revenue will be
dependent
on the specific circumstances of the particular region and type of development.
Origins of Revenue
Destination Effect:
Drawing visitors from outside the host region. Spending by casino patrons from outside the region increases the aggregate amount of economic activity within the region.
Recapture Effect:
Residents of the host region will be less likely to engage in gaming activities outside of the region. These individuals will patronize casino gaming within the host region.
Substitution Effect:
Casino gaming cause a reallocation of expenditures by individuals within the region. The increased expenditures for casino gaming will cause a decrease in expenditures on other forms of consumption or in net savings.Slide4
Economic Impact
Destination Resort Casinos:
Establishments that offer amenities and entertainment options that extend beyond gaming
Including luxury hotel, high-end retail shopping and dining, golf courses, sports arenas and convention facilities
Analysis assumes the development of three destination casinos in different regions of Massachusetts and does not include the possibility of tribal casinos.
Current plans for development now include:
Three destination casinos (Category 1)
One slot parlor (Category 2)Slide5
Fiscal Impact
Basis for Revenue Projections
Projected Revenue
Market Size: $2.15 billion in gross gaming revenues (GGR)
Assumptions of 2008 Report
Current Expenditures and Requirements
Estimated dollars spent
by Massachusetts residents on casino gaming in CT, ME, RI
$800 million
$909 million
Initial license fee for Massachusetts
$200 million
$85 million
for Category 1
$25 million for Category 2
Massachusetts
g
aming tax on GGR
27%
25% for Category
1
40% for Category 2Slide6
Socioeconomic Impact
Employment Opportunities
Social impacts are difficult to quantify as studies are contradictory
Potential Social Benefits: increased employment, higher average income
Social Costs: infrastructure, added fiscal pressure on surrounding area, housing, schools
Disputed Effects: crime, bankruptcy, problem gaming
Other
Employment
Report Projections
for 3 Casinos
Current Projections for 3 Casinos
Estimates for Revere Casino (1 casino)
Casino
17,000 – 20,000
12,000 – 15,000
4,000
Construction
10,000
– 11,500
7,500 – 9,000
2,500Slide7
Contact Information
Carl F. Jenkins, CPA/ABV, CFE, MST
Managing Director, CBIZ Tofias
Forensic, Litigation and Valuation Services Group
Direct: (617) 761-0549
Email: CJenkins@cbiztofias.com