The race is on for the licenses, with all players not yet known

The Massachusetts legislature passed a final version of a gaming expansion bill that authorizes three regional casinos and one slots parlor. The final bill was approved 118-33 by the House and 23-14 by the Senate.

Governor Deval Patrick said he would sign the bill, commenting, “a long chapter in the debate around casino gambling is about to close.”

The first casino could possibly be online within about three years, according to some in the industry. One will be put in western Massachusetts, one in the southeast and one near Boston. The slots parlor could be open within a year.

The casinos will pay a 25 percent tax rate, while the slots parlor will be 49 percent, a 9 percent increase from the original House and Senate bill. Casino developers will be required to invest a minimum of $500 million and pay an $85 million license fee. The slots parlor developer would pay a $25 million license fee and being required to invest at least $125 million.

Towns where the casinos would be located, but only if it’s a small town. In larger cities, only “neighborhoods” or wards of cities, not the entire city, will be allowed to vote on whether a casino would be allowed there. This provision is seen aimed at East Boston, where Suffolk Downs proposes to build a casino.

Michael Monahan of IBEW (International Brotherhood of Electrical Workers) expects Suffolk Downs is in a position to have a casino in place a year before its competition. “The ownership of Suffolk Downs has all their architectural drawings done, they have a (general contractor) selected, and speaking to the electrical portion ... our contractors have already budgeted the job and (are) ready to go.”

The only difference to the original bills was that the two houses approved an amendment reducing the gaming revenues go to the Race Horse Development Fund from 5 percent to 2.5 percent, with the difference going to local government for capital improvements.

The final bill took out an amendment passed by the Senate that would have allowed casino’s to give away drinks, as long as bars and taverns could do the same. In the final wording casinos will be limited to serving free drinks on the casino floor and restaurants and taverns will still be banned from offering them at all.

House Speaker Robert DeLeo commented, “I can tell you as soon as that was passed in the Senate, my phone started to ring off the hook from concerned police personnel, concerned parents, to a whole host of other folks.”

The ban on lawmakers working in the gaming industry for one year after leaving office, which had been passed in the Senate, also stayed in the bill.

Patrick, who first introduced the idea of regional casinos for the state four years ago, commented last week, “I don’t think there are any show stoppers in the bill. It’s not perfect, but it does respond to the principles that I’ve laid out from two or three or four years ago when I first started down this path.”

The Mohegan Sun, whose development arm has been pushing strongly to build a casino, including a 600-room hotel and spa on 152 acres in Palmer that it hopes to lease, responded to the news enthusiastically in a release: “We congratulate the Legislature and conference committee on delivering expanded gaming legislation that establishes a strong framework that will enable the industry to deliver jobs and economic development.”

The Connecticut-based Sun needs to develop its Palmer casino since it is expected to lose considerable revenue to the four Bay State gaming operations that will result from the legislation. That is also expected to hard hit the Sun’s rival, Foxwoods Resort Casino. Both get about a third of their customers from Massachusetts.

Next month the Mohegans will be holding a forum for potential vendors at its casino.

Palmer town officials said they have asked for a proposal from Clyde W. Barrow, director of the Center for Policy Analysis at the University of Massachusetts at Dartmouth for a study that would estimate the economic, fiscal, social and community impacts of the casino resort of the casino. They are negotiating on exactly what the study will include.

“The bill mandates a plethora of things that need to be done before a host community agreement can be signed. Any town or city that's a player in competition of a resort casino site will have to do something similar to this,” said Barrow, according to the News Telegram. Much of the study will be cost-benefit analysis, he added, but it will also include a market feasibility study.

The town is asking that the Mohegan Sun fund the study. The tribe says that it wants to know more about the study before endorsing the expense.

According to The Day, Town Manager Charles Blanchard cautioned, "It's possible and probable that Mohegan Sun has already done some of this.  So, it'd be important to sit down with them to make sure there isn't any duplication of effort."

Other announced bidders in the casino license competition include Hard Rock International, which has partnered with Paper City Development LLC to propose a Hard Rock Hotel and Casino in Holyoke.

According to a spokesman for the Sun the process of obtaining a license and scheduling a referendum in the host community could take about a year. After that construction would be about 18 months. This delay could ultimately benefit the new casino since it would give time for the economy to turn around.

KG Urban Enterprises, which is exploring proposing a casino in New Bedford commented that the group is “obviously pleased” at the legislature’s action. Unfortunately for this investor the legislature has built in an advantage for the Mashpee Wampanoag to get the license as long as it negotiates a compact with the state by the end of next July. If the tribe fails to do so that would open competitive bidding up for groups such as KG Urban. On the other hand, KG Urban and other developers interested in New Bedford, may be willing to partner with the tribe, reports say.

The tribal provision was included at the insistence of Patrick, who said he wouldn’t sign a bill that didn’t contain it.

Cedric Cromwell, chairman of the tribe, reacted ecstatically to the news. "I really want to see the Wampanoag tribal nation rise and leave no Mashpee Wampanoag behind," he said, according to the Cape Cod Times.

Although the tribe does not yet have the land for the casino—two previous deals with Middleboro and Fall Rivers fell apart—Cromwell said the short timeline was do-able. "We need to work closely and stay committed—that's the equation for success. We're going to get it done,” he said.

The bill earmarks $5 million for negotiating a compact with the state. It requires that the tribe both have the land in hand and have scheduled a vote of the resident of the community where it seeks to build. It would also give the tribe one seat on a 15-member gaming advisory panel.

Another new entry into the casino sweepstakes is Ameristar, a Nevada-based gaming company that announced last week that it plans to buy 41 acres in the western gaming zone for $16 million. The land, located in Springfield, was once the site of the Westinghouse Electric Corp., which at its height employed 7,000.It closed in 1970.

Ameristar’s CEO Gordon Kanofsky issued a statement on the purchase. "There are not many attractive new-market growth opportunities for casino companies, and this one in particular fits squarely within the Ameristar business model,” he said. The project Ameristar is pushing would have a casino-hotel, dining, shopping, entertainment and convention facilities.

Some gaming companies who may also be interested in the Bay State is Las Vegas Sands, whose CEO Sheldon Adelson was born and raised in Boston, and Penn National.

Left unaddressed by the bill was the current hottest topic in gaming: online gaming. Rep. Dan Winslow amended the House bill to include online gaming, but the Senate version did not include it.

The committee that negotiated the compromise bill between the House and Senate version completely dropped the issue from the final bill.

Now that lobbying efforts have paid off in the legislature, the same companies are starting to write checks to mayors of cities being targeted by various developers.

“Just greasing the skids,” said John Ribeiro of the anti-gaming group Neighbors of Suffolk Downs, according to the Boston Herald. In Holyoke, for example, Paper City Development donated $675 to a mayor who was defeated for reelection.

In Fall River gaming lobbyists donated $1,100 to the campaign of Mayor William Flanagan. The lobbying company, Smith, Ruddock & Hayes was paid $45,000 by the Mashpee Wampanoag tribe during the first half.

The recently elected mayor of Revere got a $600 donation from firms representing Suffolk Downs. The state limits campaigns to $200 per person or company for political candidates.

By Staff