Leave it to Massachusetts to create a political horserace out of what should be a simple matter of auctioning off casino licenses to the highest bidder.

The state’s new casino law is just a few months old, but already major flaws are becoming apparent to anyone who takes a close look. Taxpayers promised a fortune in Las Vegas gambling loot are instead waking up to the less than inspiring reality of casino-style gerrymandering and backroom deals with a number of local and state bigwigs.

It’s a process that seems likely to reward the casino developer with the best-paid team of lobbyists, rather than who can ante up the most.

Specifically, two glaring problems have emerged: A series of casino license zones drafted as if they were legislative districts, and a tortuous local approval process that amplifies the opportunities for local shakedowns.

“That means you are playing the game on politics, and not who is the best casino operator,” warned William Thompson, a professor at the University of Nevada Las Vegas and a casino industry expert. “I think that game sucks.”

Zoning Restrictions

The state’s new casino law divides the Bay State into three zones, with the Massachusetts Gaming Commission authorized to dole out one casino license within each area. But the zones themselves appear more of a political creation, featuring little – if any – economic rationale.

By dividing Massachusetts in three, casino backers ensured that each part of the state would get its own pet gambling project. While this surely helped garner the votes on Beacon Hill to pass a bill, it makes little business sense.

Two casinos in Boston and another in Central Massachusetts to cut off stray gamblers headed for Connecticut would make the most sense for Massachusetts, one Wall Street analyst argued last fall.

The current zone system, though, prohibits such a play, to the detriment of taxpayers across Massachusetts.

For what clearly are political purposes, it limits the most lucrative region with the greatest potential to generate tax revenue, Greater Boston/Central Massachusetts, to just a single casino. And in another oddity, Worcester and Central Massachusetts – part of the western zone in earlier casino bills – were grafted onto the Boston-area zone last fall.

That all but rules out a Central Massachusetts casino, which would have to compete with Suffolk Downs in Boston – considered the well-entrenched front runner – for the eastern license.

By contrast, if Worcester had been placed in the western zone, it may very well have become an attractive platform for some casino developer, and would have given central Massachusetts planners something to sell as a future growth driver.

There clearly was some backroom jockeying on the decision to stick Worcester in the Boston zone. One Worcester lawmaker has claimed credit, saying he wanted to keep a casino out of the city, even though city voters approved a nonbinding referendum in favor of a casino back in 2007.

But in the end, it’s an arrangement that seems to best benefit Suffolk, which gets a buffer zone from any potential competitors that extends far beyond I-495.

It has also left some developers steaming in frustration, like Vincent Uliano, who owns a prime site along the Massachusetts Turnpike in Charlton.

He said he’d like to cut a deal with a casino developer, but he can’t get interest since his land is in the eastern zone dominated by Suffolk.

“They should get rid of the zone system – it’s anti business,” Uliano said.

Three Strikes

Along with the uninspired zone system, casino developers must also line up a daunting series of local approvals. While in theory this preserves “local control,” in reality this may simply open the door to dozens of behind the scenes shakedowns by petty officials.

The bill requires a casino developer to win a community-wide referendum – helpfully limited to just East Boston for Suffolk Downs.

While it all sounds so logical and fair, it comes atop an already robust – and arguable prohibitive – local approval system in Massachusetts for major development projects of all sorts.

Even without the referendum, casino developers would have to get local selectmen to negotiate and win a two-thirds vote at town meeting to change local zoning rules to allow for casino gambling.

A referendum potentially throws a fatal, third strike at would-be gambling developers.

All in all, it’s just another, cock-eyed, Massachusetts-style vetting process that will produce a few well-connected winners and lots of losers, including the state taxpayers.

“You are going to have a lot of local payoffs everywhere,” said UNLV’s ever-quotable Professor Thompson. “It’s going to be [a game of] ‘How can my little town get more than your little town?’ and that’s just crap.”