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Massachusetts takes another bite at gambling apple in new referendum

Three years ago, Massachusetts approved legalized gambling, after companies competed fiercely for regional licenses and millions were spent on real estate, planning, hiring and lobbying,

Come Tuesday, however, voters in the Bay State may decide they don't want gambling after all.

This week, voters are set to decide whether to repeal a law that hasn't even fully taken effect yet, amid a uproar from a coalition of grassroots organizations that want to end Massachusetts gambling bid before it even begins. Public opinion polls suggest the odds favor the casinos on ballot Question 3 by a nearly two-to-one majority, a reflection of what some say is a boon for the state's finances.

"You're losing a billion dollars a year," said Springfield mayor Domenic Sarno, referring to the amount of money which flows from Massachusetts to other states in gaming revenues, jobs, and taxes.

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He said people have the right to oppose gambling, but when he asks them for other solutions, "Many times they'll say to me, 'That's not my problem.' I say, 'That's right, it's my problem."

"It's too good for the economy," said Marc Tassone as he ordered from the counter at Frigo's Deli in Springfield. That said, the language of the ballot measure could be confusing. A "Yes" on Question 3 would repeal the gaming law. On the other hand, a "no" on the measure means "yes" to gaming.

"No means yes to the casinos, right?" asked Tom Goodrow, an employee at Frigo's Deli in Springfield. And he's far from being the only one confused.

Investors might be befuddled as well. After all, why build a casino in a region of the country where gaming is already suffering due to too much competition? "Massachusetts is the driving engine," said Michael Mathis, President of MGM Springfield, "It really leads the northeast gaming market, but doesn't have its own facilities."

MGM Resorts fought hard for a license in Springfield, a city in the western part of the state perhaps best known for being home to Smith & Wesson, the Naismith Memorial Basketball Hall of Fame, and the birthplace of Dr. Seuss.

In that area, unemployment hovers around 10 percent, and the plot of land where MGM hopes to create an $800 million casino resort is a decrepit stretch of property along the Connecticut River ripped up by a tornado in 2011. Mayor Sarno is jubilant.

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"Just when people thought it was time to turn the lights out in city of Springfield, on the resliency of the people of Springfield, the exact opposite happened," he said. "The MGM development has put us on the map."

Mathis said MGM has promised a third of the 3,000 permanent jobs will go to people living in the city of Springfield. The mayor said the company will pay $25 million a year in various revenues to the city, and it has promised to spend $50 million buying from local vendors. Most of the 850,000 square foot development will be non-gaming.

"I always wanted to have an ice skating rink like they have at Rockefeller Center," said Mayor Sarno, "We will have that."

Over in Everett, an industrial area outside Boston, Wynn Resorts plans to spend $1.6 billion on what Steve Wynn believes will be a world class destination. "They want that established level of luxury that we've proven we could deliver," Wynn told CNBC last month in Las Vegas. "In Boston, every gambler is going to be waiting to see if we can do it as well there. I'm going to give it to them."

Rodney Butler, tribal chairman of the Mashantucket Pequot tribe, which runs Foxwoods Resort Casino in Connecticut, said that about a quarter of Foxwoods' business comes from Massachusetts. The tribe, however, competed for a license there and lost.

If the repeal of gaming fails, the big boys in Vegas will be moving in next door, and Butler is preparing for it.

"We have a brand, a recognized brand that's been established here for north of 20 years," he said. While slot revenues continue to fall six to ten percent, Foxwoods has been investing in new retail and better live entertainment, and focusing on what its customers like to spend money on.

"We think we have the advantage of knowing who those patrons are, knowing what they want, knowing their likes and dislikes, and getting the right offer tailored to them to bring them back to the property," Butler added.

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That will be easier to do if, Massachusetts voters decide to repeal gambling. It's difficult to find anyone who supports a repeal, but supporters have been outspent handily in pre-election advertising. MGM's Mathis said the company has already invested $40 million in Springfield, and part of that has gone to provide space and phones for people to get out the vote to defeat Question 3.

Mathis is hoping to be out on site with a hard hat Wednesday morning, unless there is a huge upset at the polls.

"We have projected about $500 million in gaming revenues, which is very aggressive." He wants to beat Wynn to opening, so that residents in Boston can be lured west to see what MGM has to offer first. "We want to show the rest of the industry we're more than just casinos, and that we can be an engine for economic development," Mathis said.

—CNBC's Jodi Gralnick contributed to this report.