Now is not a good time for cutbacks to affect gambling programs. Although the UIGEA is set to become law tomorrow, that does not mean it will. The law is set to make online gambling illegal, but will it work? Industry insiders are saying that it won’t. They are predicting that there is enough of a legislative push to bring amendments to the UIGEA and alternatives to the picture that the question of illegal online gambling will be changed.

The state of Massachusetts is one state that is having a hard time fleshing out the online gambling issue. It is in the midst of some serious changes regarding the hobby. Online gambling is a billion-dollar business and the state is looking to expand its gambling in an effort to overcome its huge deficit problems. Unfortunately the state’s budget is causing greater cutbacks that could soon affect its new state of operations with the acceptance of gambling.

It was just announced that the Massachusetts Council on Compulsive Gambling may have to close down due to budget cuts by Governor Deval Patrick. The agency has been a very important organization for the state and it’s offered a wide variety of services to gambling addicts. However since the recession, funding for the agency has seen a 62% decline. This huge cut in funds makes it next to impossible for the organization to continue running. The change puts the state in a precarious position since legalization and regulation of gambling is such a hot topic.  One critic of the gambling issue stated, “They are going to provide all the gambling and slots people need, but when those same people become addicts, who is going to help them then?”

Although some believe that the funds from gambling and slots will fuel the economy in the state and allow it to earmark money for addiction services, there has been no formal move or committment by the government to do so. if slots are made legal and accessible in the state, some method of funding help for those in need will need to be found. Some analysts are suggesting the best option is for the state to legalize and regulate slots gambling and then portion part of the proceeds directly towards addiction services.

The question of gambling’s legalization once again, comes down to budgets. House Speaker Robert DeLeo of Winthrop, told the media that emergency cuts of anywhere to $500 million to $1 billion may be needed to manage this year’s budget crisis.  DeLeo confirmed that in January he will be signing a bill that legalizes casinos and the bill will most likely include slot machine parlors to be set up in Massachusetts’s horse and dog racetracks. There will be an immediate push for slot machine parlors because they will hopefully provide instant state revenues, whereas casinos may take some time to start running at full capacity.

The bill itself is still somewhat vague in policy. Although it does state the legalization of gambling and casinos will be brought to the forefront, it doesn’t touch on specifics. Things such as how many casinos may be decided upon, but where to place them is still unknown. In front of the Chicopee Chamber of Commerce DeLeo stated, “I don’t think there will be a question as to whether there will be more cuts. The question will be how much.” It’s this inevitable budget cut that is pushing for the legalization of gambling within the state.

The first round of budget cuts are scheduled to occur as soon as possible. This includes emergency funding and reductions in local aid. He stated the state is trying to do all it can to protect local aid, but they may have no choice but to tap into the fund.  DeLeo added, “The slots are a more immediate form of revenue. Casinos are more long term. The first thing out of the box could very well be slots, followed by casinos down the road.”

Governor Deval Patrick filed a bill last year that would approve three new casino resorts to be built, but was in opposition to slot machines being installed at race tracks. He can no longer debate the necessity of added revenue or the immediacy of slots. Although casinos could be the answer the state needs, it isn’t something that can be up and running in a few months. A full-fledged casino system would take years to complete. On the other hand, slot parlors installed in racetracks would take a few months to get into place.

In early March, 20 projects in Luzerne County of Pennsylvania were given a total of $13.8 million in funding from slot machine revenues. These projects included new police station facility, along with surveillance cameras for the police force and two cruisers for one town. Although the funds were apportioned for these purposes, the state’s press secretary Steven Weitzman announced that over 80 financial requests were filed with the state in an effort to benefit from the slots revenue. “It’s worked out well. It’s a non-taxpayer source of funds to do some things. It gives us a pot of money to do things that would be difficulty or impossible to do,” Weitzman said.

Slots are proving to be a lucrative source of income for the state. Earlier this year the state of Pennsylvania announced that property tax relief will be extended in the amount of almost $770 million. That money comes directly from gaming. Almost 2.7 million residents of the state experienced a tax reduction due to the gaming initiative. This year an additional decline in taxes is expected for citizens.

Statewide revenue from slots is growing quickly. It’s estimated that the amount is growing at nearly double-digit rates. In just one year, the revenues rose almost 10%. That 10% is the equivalent of $85 million in taxes for one month alone.  Annual revenue of the Pocono Downs alone was about $170 million last year and it’s expected to grow substantially when the 2009 year comes to an end.

The happenings of Pennsylvania are spilling over into Massachusetts’ legislation.  This state is also embroiled in a bitter debate over the legalization and regulation of online slots and online gambling. Senate President Therese Murray believes that state should legalize gambling and give itself the opportunities of benefiting from the $900 million current residents spend in casinos annually. Tax regulation would allow the state to spend more money on infrastructure and development of public works programs. Murray believes that strong support for legalization is already in place and it should be passed through the Senate relatively easily. She added, “There was an appetite last time, but there’s a bigger appetite this time.”

Massachusetts can only look longingly with jealousy at Pennsylvania. Pennsylvania is already collecting huge slot machine tax dollars and finding out just how lucrative online gambling can be. It was 2006 when the first slot machine parlor opened up in the state at the Keystone State. In that year, slots took in $2 billion in taxes and casino licensing fees. It’s estimated that the state brings in $2.5 million every day in slot machine tax revenue and last year the state was able to defray $1 billion in property tax relief as a result.

Plains Township, a small city in Pennsylvania, noted that it financed 50% of the entire town budget from their slot machine revenue alone. The Mohegan Sun Pocono Downs is the casino that is fueling the local government. The success of the casino tax dollar usage is ringing loudly in the ears of legislators everywhere. The money potential is huge if slots are legalized and regulated.

Massachusetts has not yet reached the same level of legalization Pennsylvania has. Massachusetts is making move to legalize slots, but the details are not yet known. The state has been very vague about their first-step bills and amendments and neither site any specific locations for casinos to be built. One thing that is not as sketchy is the feasibility of building slots parlors throughout the state at local racetracks for dogs and horses. This seems to be a legislation that will pass with relative ease into legality.

Currently the Mohegan Tribal Gaming Authority owns more than 150 acres of the state of Massachusetts and they are hoping to build a casino resort there. The building of the casino brings up much controversy however. There will be huge costs affiliated with its building. The police force will have to be bolstered and the fire department will need an expansion. In addition, it’s estimated that new schools will need to be put up in the area to maintain added population spurts. Town counselor Paul E. Burns stated, “There needs to be some mechanism to ensure the host community does not end up becoming a net loser in the process. Whether we negotiate that with the casino, the state or some combination it needs to be taken into consideration.”