Like Healey, House Ready To Shuffle Gaming Revenues

House leadership last week went along with most of Gov. Maura Healey's proposal to redirect some casino gambling revenues to free up tens of millions of dollars in a tight budget year, but representatives made a few meaningful changes, including preserving the full funding stream for an account that helps pay for responsible gaming efforts.

The nearly $58 billion budget the House Ways and Means Committee released Wednesday includes an outside section to change the distribution of gambling revenues in order to make $79.7 million available to be spent through the fiscal 2025 budget. Healey's proposed restructuring would have freed up $100 million. Ways and Means Chairman Aaron Michlewitz said the House "did adopt some of the governor's proposals related to this, but didn't meet exactly the number that she proposed, on the one-time revenue adjustments" including the gambling revenue consolidation.

The House approach would leave revenue that flows into the Race Horse Development Fund untouched at 2.5 percent, whereas Healey had proposed to eliminate revenue for that fund.

And representatives also did not go along with Healey's plan to half the funding stream for the Public Health Trust Fund, which pays for problem gambling initiatives, and opted to continue to give that fund 5 percent of gambling revenues.

Commissioner Brad Hill, a former member of the House, said Thursday that the House approach to the Race Horse Development Fund means $19 million more for the fund than were Healey's proposal to be adopted. But he also pointed out that the House's budget would zero out funding in fiscal 2025 for the Community Mitigation Fund, which funds response efforts in communities that host gaming facilities; Healey had proposed reducing the stream to that account from 6.5 percent of revenue to 3 percent.

"This would mean a cut to the Community Mitigation Fund of about $16.7 million compared to the FY23 actuals," Hill said.

Representatives also made a more significant change when it comes to gambling revenues for transportation projects.

Under current law 15 percent of casino revenues go to the Transportation Infrastructure and Development Fund created in the 2011 expanded gaming law and Healey had proposed to up that percentage to 20.8 percent. But the House Ways and Means budget would instead direct 20.6 percent of casino revenues to a different transportation fund, the Commonwealth Transportation Fund.

The House also made some minor tweaks to what the governor suggested: 30.1 percent of revenue to the Gaming Local Aid Fund instead of Healey's 32 percent (typically 20 percent), and 6.2 percent for the Local Capital Projects Fund instead of Healey's 6.1 percent (typically 4.5 percent).

Hill pointed out that the change in the flow of casino revenues would be temporary under the House proposal. Healey's budget included language leaving open the possibility of a more permanent change.

"There's also language in the budget that would make this a one-time removal of these funds," Hill said. He added, "So that's good news, that it's only for FY 25."

Hill also flagged for commissioners that the House budget again seeks to authorize the Mass. Lottery to sell its products online through what is often referred to as iLottery.

"We want to make sure there's not any cross-pollination going on. And I wasn't here at the time ... back in 2017, there was a letter that was put out by the Mass. Gaming Commission to the Legislature, just letting them know that the definition of what iLottery would be was of concern at that time," Hill said Thursday morning. "So again, we're taking a look at it and seeing what the definition is. And if there's anything that I think we should be concerned of, I will certainly bring that back to the full commission."

Less than 24 hours after the budget was released, Rep. Adam Scanlon of North Attleborough had filed an amendment (#323) that would require that 2 percent of revenues from the online sale Lottery product be transferred to the Public Health Trust Fund. The House budget assumes $100 million in new revenue from online Lottery sales, compared to Healey's estimate of $75 million.

The Public Health Trust Fund was created in the 2011 expanded gambling law as a way to "allocate significant resources to research, prevention, intervention, treatment, and recovery support services in order to mitigate the harmful effects of problem gambling and related issues." It is overseen by the Executive Office of Health and Human Services.

At the final budget hearing last month, state-sponsored gambling opponents from the group Stop Predatory Gambling said the state's responsible gambling initiatives like those funded through the Public Health Trust Fund "are a sham" that exist "to give the appearance that something is being done to protect the public from predatory and dangerous business practices." The group cited reports that have shown that people who follow responsible gambling guidelines account for 75 percent of gamblers but contribute just 4 percent of gambling industry profits.

Nonetheless, the group called on lawmakers to reject Healey's proposal to cut the revenue stream for the fund in half.

"Unlike nearly every other major problem in society, Massachusetts’s epidemic of gambling addiction metastasizing across the state is completely self-inflicted by public officials of both political parties. Because of this reality, the state can continue to go through the motions of at least giving an appearance of trying to help its own citizens by sustaining the funding that the Public Health Trust Fund currently provides to attempt to treat gambling addiction," Les Bernal, the group's national director and a former Mass. Senate aide, wrote in budget testimony last month.