As a July 31 deadline nears, Massachusetts Gov. Deval Patrick yesterday came to an agreement with the Mashpee Wampanoags for a gaming compact that gives the tribe the exclusive right to build a casino in the southeastern part of the state. Under the new casino law, a deal had to be struck before the end of the month, or the region opens up to commercial bidders.

The compact still has to be approved by the legislature and the Federal government, and while the Wampanoags have their sights set on a location in Taunton, there are land issues that need to be satisfied. Taunton voters approved a casino in a non-binding referendum last month.

Under the revenue-sharing terms of the compact, the state would receive 21.5 percent of net win, a bit less than the 25 percent tax rate on commercial casinos. The tribe would not have to pay the same up-front licensing fee of $85 million, giving them a significant advantage from the start.

Many tribal casinos around the country operate under revenue sharing agreements. One of the most lucrative to any state is the deal struck in Connecticut when the tribal casinos began operating – 25 percent of slot revenues are paid to the state (table game revenues are not factored in). Since the beginning (Foxwoods in 1993, Mogehan Sun in 1996), the casinos have paid more than $6 billion to the state through June 2012.

One of the most high-profile new compacts in recent years came in Florida with the Seminole Tribe. The 2010 deal guarantees the state a $150 million annually during the first two years, $233 million in the third and fourth years, and $234 million in year five. Years three through five are  actually subject to either the guaranteed minimum or to a sliding scale of net win, ranging from 12 percent of the first $2 billion up to 25 percent of win over $4.5 billion annually. The scale also applies to the remaining 15 years of the 20-year compact. By comparison, the racetrack casinos in South Florida pay a 35 percent tax on slot win. The tribal revenue-sharing deal is off if the state approves more casino gaming in the state.

Other states with both commercial casinos and tribal casinos with revenue-sharing agreements include Michigan, New Mexico and New York.

Michigan’s numerous tribal casinos pay eight percent of net win from slot machines to the state and two percent to municipalities, for a total of 10 percent. Detroit’s casinos pay 8.1 percent of net win to the state and 10.9 percent to the city, for a total of 19 percent. In New Mexico, the tribes pay a rate based on a sliding scale of net win, currently ranging from three percent to 9.5 percent; the average payment over the past year was about 9.1 percent. By comparison, the state’s racetrack casinos pay a 26 percent tax on net win from slot machines; non-profit organizations pay a 10 percent tax.

New York’s tribal revenue-sharing agreements, with up to 25 percent going to the state, are under dispute. The tribes claim the state’s deal with the racetracks for gaming machines negates the payments. Hundreds of millions of dollars are at state. Meanwhile, the racetracks operate under a tax rate from 35 percent to roughly 51 percent depending on location and annual revenue.

The proposed Massachusetts compact most certainly closes the gap between tribal revenue sharing and commercial casino tax rates compared to other states, seemingly creating a more level playing field for all the operators.

If the Wampanoags are successful in securing a site in Taunton, that pretty much removes nearby Raynham Park from consideration as a slot parlor. It is likely that another location would generate more revenue for the state, an important consideration. Plainridge Race Course is looking good for the one available license.