Massachusetts gambling bill takes major step forward

BOSTON, Massachusetts -- The Massachusetts State Senate on Thursday approved a gaming bill that could lead to three Las Vegas-style casinos in that state.

The bill passed by a 24-14 vote in the Senate. It authorizes three full-scale casinos with slot machines and table games and one slot machine-only casino.

The Massachusetts House passed a similar version of the bill last month.

The measure now goes to a joint House-Senate conference committee, where lawmakers will reconcile differences in the two versions before sending it to Gov. Deval Patrick, who has indicated initial support for the plan.

"We believe the difference between the two bills is a small hurdle and final legalization looks more than likely," J.P. Morgan gaming analyst Joe Greff told investors in a research note following the vote's passage.

Under the plan, the three full-scale casino licenses would be auctioned for at least $85 million and developers would be required to invest $500 million in the projects. The slot machine-only casino license would be auctioned for at least $25 million, and the developer would be required to spend $125 million on construction.

The casinos' gaming revenues would be taxed at 25 percent. The slot machine parlor would pay a 40 percent tax on gaming revenues and 9 percent to a special fund to subsidize horse racing.

"Overall, we believe the license fees and minimum investment requirements, as well as the tax rates, are attractive and in line with other regional jurisdictions," Greff said.

The facilities would be allowed to operate 24 hours and would be smoke-free.

Las Vegas casino companies, including Caesars Entertainment Corp. and Las Vegas Sands Corp., whose chairmen have ties to Massachusetts, could be interested in entering the market.

Macquarie Securities gaming analyst Chad Beynon said it was too early to handicap the competition for the Massachusetts gaming licenses. He told investors almost every major casino company would most likely be in the hunt.

"Jockeying for position has been going on for some time now, as gaming operators and property owners maneuver themselves into the best position," Beynon said.

The news is also promising for slot machine makers. The Massachusetts casinos could include more than 10,000 new slot machines.