Related: The Lying Looter at the State Lottery
"Cahill slot estimates criticized; Outdated data used, analysts say" by Matt Viser, Globe Staff | March 5, 2009
State Treasurer Timothy P. Cahill's estimate that three slot machine parlors he has proposed for Massachusetts would produce $2 billion to $3.3 billion in licensing fees was criticized yesterday by gambling specialists as significantly inflated and apparently based on outdated data that did not take into account current economic realities.
You mean a government official lied? Oh, I just fell out of my chair.
Cahill also encountered problems on a second major proposal, a plan to privatize the state lottery that he unveiled yesterday morning. It is a move that has been contemplated by other states, but which the US Department of Justice has said would violate federal law.
What a piece of work this guy is!!!!
Cahill's numbers for slot machines were based on an underlying flaw, an assumption that each slot machine would produce profit of $275 per day, which is probably too optimistic, specialists said. Cahill used that number in a financial analysis to conclude that prospective bidders would agree to pay between $665 million and $1.1 billion each in upfront fees for a license.
"Nobody's ever paid that much for a casino license," said Clyde Barrow, a casino specialist at the University of Massachusetts at Dartmouth. "I can't see anybody putting up that kind of money to license a slot parlor. This is really an eye-popper for me."
The real-world experience for states has been far less lucrative. Pennsylvania has sold licenses to operate slot machines for $50 million each, which is only 7 percent of Cahill's lower estimate.
Cahill is running into problems similar to those Governor Deval Patrick encountered last year in coming up with estimates for what expanded gambling could bring to Massachusetts. It is an inexact science, particularly in estimating how much prospective slot operators would bid on a license....
In a breakfast speech to the Greater Boston Chamber of Commerce yesterday, Cahill proposed that the state consider privatizing the lottery, which he said would net $1 billion immediately and $900 million a year in ongoing revenues. But an opinion issued last year by the US Department of Justice said selling or leasing a lottery to private enterprise would be illegal.
The opinion, issued in October in response to a number of states considering leasing their lotteries to private companies, said federal law requires that states maintain control over all significant business decisions made by a lottery and keep the vast majority of the money.
Cahill did not mention the potential legal impediment during yesterday's breakfast speech, which captured widespread attention, but he said in an interview later that he and his staff knew about the legal problems with the plan. He said he hoped the Justice Department's position would be reversed by the administration of President Obama.
And the lies just a keep on coming!
"We recognize this is a roadblock," he said. "I feel very strongly that if the president of the United States wants states to solve our problems, they should allow us to do something like this. The reason I'm doing this is so we don't have to go to the feds hat in hand."
Cahill's staff used a variety of assumptions and financial models to arrive at the figures, including estimating how much each slot machine would yield, how many slot machines would be installed, and what the operating expenses would be, according to a summary of the plan.
Casinos and slot parlors in other states have attracted bids that are much lower than Cahill estimates. In December, Illinois put its 10th full casino license out to bid, and the highest bid was $435 million. The state gave the license to Midwest Gaming and Entertainment, which paid a $125 million up front and $300 million over the next 30 years to build a casino in a Chicago suburb.
Illinois has among the highest tax rates for slots in the country, at up to 50 percent. Cahill argues that developers in Massachusetts would be willing to pay more upfront costs in return for a relatively low state tax of 27 percent. One of the flaws in Cahill's analysis, several gambling specialists said, is that he appears to be overestimating the amount of money the slots would make.
Well, when you are SELLING BS with a PERFUME COVER you need to make it sound like it smells good!
"They're taking numbers that are prerecession and applying them to a time period when we're in a deep recession," said Michael Pollock, managing director of Spectrum Gaming Group, a New Jersey-based consulting firm that last August completed a gambling study for the Patrick administration. "Clearly those numbers are out of date."
Cahill estimated profit by extrapolating from casinos in Connecticut and Rhode Island. But according to statistics compiled by Spectrum Gaming, the annual numbers for those casinos in January 2009 were lower than the ones Cahill used.
In his address yesterday, Cahill said he would divide the money that comes from licensing slot machines into thirds: A third would replenish the state's reserve account, which has been used to bolster state finances; a third would create a public higher education endowment; and a third would boost state retiree healthcare funds.
I'm so sick of politicians and their empty promises.
And save the BAD NEWS for a SLOW SATURDAY!!!!
"Glitzy video slots seen as particular addiction risk" by Carey Goldberg, Globe Staff | March 7, 2009
Among addiction specialists, video slot machines have come to be known as the "crack cocaine" of the gambling industry....
I wasn't impressed with them at all.
so skillfully designed to keep players glued to their seats that some have been known to wear adult diapers to avoid bathroom breaks....
Yeah, I THOUGHT IT SMELLED FUNNY in there!
Cahill has argued that slot machine parlors would not generate any more social problems.... And, he says, people are gambling in other states anyway - Rhode Island has slots emporiums, and Connecticut has casinos - and bringing slots to Massachusetts would allow the state to establish a fund to treat gambling addictions.
Now, is THAT EVER ORWELLIAN or what?
Also see: Rhode Island First State to Bail Out Casinos
"All we're saying is to let Massachusetts people do what they want with their money in their state, as opposed to having to drive out of state," Cahill told reporters this week. "We're not looking to exacerbate the problem, just try to capture it here in the state."
This as they TAX US to DEATH OUT HERE!!!!
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And even Patrick is pooh-poohing his idea:
Governor Deval Patrick reacted skeptically yesterday to state Treasurer Timothy P. Cahill's proposal to license three slot machine parlors around Massachusetts, as legislative leaders quickly embraced the idea as a way to raise quick cash that could help the state navigate a recession of historic proportions.
Patrick said that he does not want immediate budget considerations to trump the benefits of his preferred gambling alternative: large resort casinos. He argued that gambling resorts, with accompanying hotels and other luxury amenities, would create far more jobs and economic development than slot parlors, offering lasting gains that he said could help offset the inevitable social costs of gambling....
I don't want those parasites and their immorality and crime anywhere near this sate. Didn't the VOTERS just VOTE DOWN DOG RACING?
Lawmakers and specialists also questioned whether Cahill's estimates on revenues were excessively rosy, particularly his prediction that selling slot parlor licenses could immediately raise as much as $3.3 billion. Nonetheless, the Cahill proposal, detailed in yesterday's Globe and highlighted at a legislative hearing, renewed the spirited debate over legalized gambling in Massachusetts....
But while slot parlors are much cheaper to build and operate than casino resorts, some questioned whether developers would really be willing to spend what Cahill predicted. Las Vegas gambling operators are suffering mightily in the recession, with empty casinos, stalled expansion projects, and plummeting stock prices....
Other states that have tried to get in on slot parlors have struggled. Four years after Pennsylvania legalized gambling, only half of the state's 14 slot parlors have opened, and competition was light for some of the licenses. Maryland, which charged $50 million for slot-machine licensing fees, has struggled to sell its licenses, and some companies have neglected to submit their license fees....
Cahill made his proposal as lawmakers grapple with increasingly dire budget news. Murray and DeLeo said yesterday that revenues are falling more than projected and could result an additional $500 million budget gap this fiscal year. That would come on top of a $2.5 billion budget hole that has already been plugged by the governor, and could result in immediate budget cuts....
This after they told us SAVE the INCOME TAX and there will be NO SERVICE CUTS!
Pfffffffttt!!!!
Others, who have been under fire from constituents for considering a 19-cent increase in the gas tax, were happy to discuss any revenue-generating proposal....
Yeah, it's ALL a BIG GAME to F*** US!!!
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