Tim Cahill's Casino and Slot Machine Gambling Problem

Tim Cahill

Tim Cahill wants to bring slot machines to Massachusetts. Even though slots have no economic benefit, it’s not surprising that Cahill is promoting them because slot machine manufacturers have been major contributors to his political campaigns for years.

Cahill supports the legislature’s casino bill. He’s trying to distance himself a little bit now by saying that he only supports ‘most’ of it. He claims that he’ has been too busy to read it all.

“I’m running a campaign, and I just haven’t had time to sit down and plow through it all.”

I think he’s being a little coy. It’s a pretty important bill, and he is the State Treasurer after all. If he hasn’t read it by now, he really should have. It sounds like he’s trying to buy himself a little wiggle room in case it turns out that he needs anti-casino voters to complete a winning constituency of voters.

Major international gambling conglomerates, Scientific Games and GTech Corporation, have funded Tim Cahill’s political fortunes for years. If he can bring slots to Massachusetts their years of investment in him will pay off.

Scientific Games

Scientific Games, based in Georgia, is the world’s leading maker of scratch tickets. They also make lottery tickets, and race track betting systems. In 2004 the contract for the Massachusetts Lottery’s scratch ticket racket was up for renewal.

Tim Cahill, as State Treasurer, oversees the Massachusetts Lottery. Cahill’s top aides recommended that Cahill spread the contracts among multiple vendors. So Scientific Games began a program of steering political contributions to Cahill, and consulting fees to Cahill’s closest friends.

Scientific Games began by hiring Cahill’s long time ally, lobbyist Thomas F. Kelly, for $3,000 per month. Kelly recommended that Scientific Games begin contributing money to Cahill’s campaign fund. So, starting in 2004, 12 executives of Scientific Games ( Steven Beason, Robert Becker, William Behm, Sally Conkright, Joseph Gendron, William Huntley, Gayle Kennedy, Dewayne Laird, Chantel Ornstein, Steven Saferin, John Walsh, Lorne Weil ) began a program of political contributions to Cahill – $500 per year each, every year for a total of $18,000.

At the time the contract was under consideration in 2004, Kelly recommended that Scientific Games hold a fund raiser for Cahill. So on October 16th, 2004, Lorne Weil organized a fund raiser in Manhattan at the Water Club, a posh restaurant on the East River where they raised $20,000 for Cahill.

Scientific won the contract. It’s how the game is played.

Thomas Kelly is a long time friend and political ally of Cahill, and it was Cahill who recommended that Scientific Games hire Kelly as a lobbyist. From 2004 until 2007, Scientific Games funneled $132,000 to Kelly through Regan Communications, a PR firm.

Thomas Kelly has been flying under the radar as a lobbyist. Despite lobbying on behalf of two different casino interests for years, Kelly only started registering as a lobbyist in 2007, after coming under pressure from Secretary of State William Galvin. If you look in the state’s lobbyist records you won’t find Kelly mentioned until recently.

What Scientific Games didn’t know was that Kelly was also taking money from their competitor - Rhode Island based Bingo Innovative Software. Both companies have been competing for state lottery business related to Bingo and Keno games. When Bingo International failed to land a contract for the Bingo game, they filed a lawsuit in 2008 alleging that Cahill, and Mark Cavanaugh, the lottery’s executive director, steered business to Scientific Games in exchange for political contributions to Cahill’s political campaigns.

In their lawsuit, Bingo Innovative alleges that:

“Fund-raising was undertaken by Scientific Games in a ‘pay to play’ scheme in which most-favored contractor status was awarded based on fund-raising activity.”

It must have really burned them up that they had been paying Cahill’s friend Kelly money all those years and that, despite the payoffs, the business still went to Scientific Games. I guess Bingo Innovative didn’t funnel enough money to Cahill and his allies.

To defend himself from the lawsuit, Cahill hired two politically connected law firms, Mintz Levin and former attorney general Scott Harshbarger’s firm Proskauer Rose LLP. Cahill’s lead attorney at Mintz Levin is Congressman Bill Delahunt’s cousin, Robert Delahunt Jr.

These firms are billing the state at a rate of $500 per hour. The lawsuit is still in its very early stages. The legal work so far has only involved a few preliminary motions and only one deposition has been taken, and yet the case has already consumed $393,000 of taxpayer money. The lottery commission has authorized a budget of $900,000 to fight the case.

When asked about the exorbitant costs, Delahunt said:

“Litigation is expensive, and good litigation is costly. We are being extremely, extremely efficient and careful as we can with the public monies here.”

Tim Cahill may be campaigning on fiscal responsibility, but when it comes to hiring politically connected lawyers, he is profligate with taxpayer’s money. Of course the law firm of Mintz Levin has returned Cahill’s generosity. Over the last 4 years Mintz Levin and its employees have contributed $60,695 to Cahill – his largest source of campaign contributions.

Scientific Games is now trying to expand into the slot machine business. In April, Scientific Games completed its purchase of Sceptre Leisure PLC, a slot machine manufacturer. They are going to need a market for those machines. And it’s a good thing they have a friend in Massachusetts.

As expected, Tim Cahill proposed that Massachusetts add slot machines to the casino bill, and recommended that the slot machine bidders be Scientific Games and GTech Corporation, another frequent contributor to Cahill.

Scientific Games has hired a new lobbyist to push for slot machines in Massachusetts, Michael J McCormack. Thomas Kelly has moved on to other interests. His casino lobbyist assistant, Lyn Burke, has moved on to lobby for casino developer Hall Properties with disgraced former speaker Charles Flaherty. All of them are still busy passing money around on Beacon Hill.

GTech Corporation

Gtech Corporation is a Rhode Island based manufacturer of slot machines.

Over the past 7 years, GTech as contributed over $2,000,000 to political campaigns across the country. They have been contributing to lawmakers in Massachusetts since at least 2002, both directly and through lobbyists. GTech’s executives,  Marc Crisafulli, Alan Eland and Donald Sweitzer,  are frequent contributors to Cahill and other lawmakers.

GTech has also hired its own disgraced former speaker, Robert Finneran, as their lobbyist.

In 2006, Marc Crisafulli, a former vice president of GTech and frequent Cahill contributor, cashed in $10 million in stock options and left GTech to join the law firm of Hinckley Allen and Snyder where he can lobby for GTech full time. Hinckley Allen and Snyder is a lobby firm, and Crisafulli is a full time lobbyist. In Rhode Island, he is registered as a lobbyist. But in Massachusetts, Hinckley uses a loophole and is registered as a PAC. So they don’t have to disclose who their Massachusetts clients are, and don’t disclose who they contribute to. I’m betting Cahill is still a very close friend.

For their lobbying efforts, GTech has met with some success. In 2007, Massachusetts awarded GTech a $20 million contract to provide 3,050 instant ticket vending machines. They beat out Scientific Technologies subsidiary Oberthur Gaming Technologies Corporation. And it’s no surprise, because Oberthur didn’t contribute to Cahill, and isn’t funneling money to Cahill’s best friend Thomas Kelly.

Before the recent passage of the casino bill, many amendments were proposed. Most of them were to protect casino patrons in one way or another, by requiring slot machines to post odds for example. All of these were defeated. Only one amendment passed – requiring that slot machines be American made. It makes sense – this way it’s easier to steer slot machine business to GTech and Scientific.

Gambling with Massachusett’s Future

The Massachusetts Lottery is an inefficient and regressive tax. The lottery currently brings in about $4.5 billion in sales. About $3 billion is returned to players in prizes – the other $1.5 billion amounts to a regressive tax which hits disproportionately on those who can least afford it. About $1 billion goes into the state budget. The rest goes out of state – much of it to Scientific Games.

With the lure of temporary construction jobs, and a small number of low wage casino jobs, Massachusetts is poised to enact a sweeping casino bill which would bring slot machines to Massachusetts. The slots option will not bring any construction jobs, nor will it create many jobs to operate the machines. But the machines will be another avenue for gambling interests to syphon money out of citizen’s pockets.

Under the current casino bill, H4068, the profits from slot machines are treated like regular income to the slot machine operators. The state will collect probably around 25% of the money lost by gamblers. The rest will go into the pockets of the gambling industry – most of it out of state.

But the problems it leaves behind – the foreclosures, the suicides, the business closures, will all  stay in Massachusetts.

If Tim Cahill becomes governor, he is sure to expand gambling in Massachusetts. It is likely he will push for a casino bill. It will certainly include slot machines. They will be made by GTech and Scientific Gaming. These companies have been investing in bringing slots to Massachusetts for years. If Cahill becomes governor their investment will pay off.


3 Comments

  • April 26, 2010 - 12:01 am | Permalink

    Have you seen how Patrick’s whole campaign strategy seems to involve promoting Cahill?

    Patrick knows its going to be hard to get a majority of the voters to support him with his high disapproval rating. So I think their goal is just to see if they can support Cahill while he runs to the right of Baker.

  • April 25, 2010 - 8:01 pm | Permalink

    Have you seen how Patrick’s whole campaign strategy seems to involve promoting Cahill?

    Patrick knows its going to be hard to get a majority of the voters to support him with his high disapproval rating. So I think their goal is just to see if they can support Cahill while he runs to the right of Baker.

  • Charlie
    February 28, 2011 - 12:44 am | Permalink

    Thomas Kelly’s “other interests”: he now works for Mintz Levin, which is doing the legal work defending Cahill and the Lottery for the trouble they got into with Scientific Games. Kelly is such a good guy to help out a friend after getting him in trouble.

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