Massachusetts casino commission appointment earns praise

Governor Deval Patrick last week appointed a bipartisan pragmatist, Stephen P. Crosby, who has worked on several administrations for both Democrats and Republicans to head the nearly all powerful Massachusetts Gaming Commission, which will oversee the location and operation of the state’s three regional casinos.

Patrick praised Crosby, “The chair needs to be someone who has the proven capacity and the experience to launch a new organization, someone who knows and loves Massachusetts and appreciates what makes us special.”

Crosby, 66 formerly a Republican, and not currently unaffiliated with a political party, made it clear from the get-go that he will not rush the process of choosing developers and locations, which, he says, can lead to corruption.

He referred to a recent grand jury report in Pennsylvania: “It’s pretty clear to me that one of the destructive forces in Pennsylvania was the sense of urgency to do something fast. I don’t have that urgency.’’

He said that he has no preconception of where any of the three casinos authorized by the legislature should be located. He did say he expects to developers to submit “squeaky clean and fastidious applications.”

He expects “squeaky clean,” from himself as well, he says. “You can’t not be who you are, but the rules and standards here are very rigorous. I will not lose my friendships, but I will barrier my friendships at my responsibilities for this job.”

He added, “Nothing, nothing poisons the public perception more than the suspicion that something’s going on under the table. We will be doing everything we absolutely can to avoid that suspicion and reality,” according to the State House News Service.

Crosby’s appointment does not require confirmation by the legislature. Attorney General Martha Coakley and state Treasurer Steve Grossman will appoint other commissioners. Coakley’s appointment must have a background in law enforcement while Grossman’s must have a background in corporate finance. The governor, treasurer and AG will jointly appoint the other two members. No more than three members can come from the same political party. A consulting firm has been hired to help with the search for the commissioners.

Among abuses chronicled by the grand jury report in Pennsylvania were patronage, overlooking of criminal backgrounds and organized crime penetration of the industry—all of which were laid at the foot of a slipshod commission.

Crosby was secretary of administration and finance, the top budget official under Governor Paul Cellucci and held the same function as well as chief of staff under Acting Governor Jane Swift. He was also a campaign manager for Boston Mayor Kevin White. He comes to his new job from dean of the McCormack Graduate School of Policy and Global Studies at the University of Massachusetts Boston. Last year he was chosen by the Massachusetts Supreme Judicial Court to serve on a task force investigating patronage abuses in the state’s justice system. He has also has founded small publishing and media enterprises.

Cellucci last week praised Crosby as “a natural consensus seeker who will solicit all viewpoints respectfully.”

Rep. Joseph Wagner, who was intimately involved in passing the gaming bill, called the appointment, “a solid one,” adding, “He’s picked someone whose reputation is impeccable, somebody well credentialed, somebody whose got a terrific background.”

He has said he would like to return to the university after two years, even though the chairman’s appointment has a seven-year term. The university considers that Crosby is “on loan,” to the commission.

Crosby says that the extent of his participation in gambling has been to buy the occasional lottery ticket and to visit the Cripple Creek casino in Colorado with his daughter. He owns no casino stock. His view on gambling has evolved over the years, he said. Last year Crosby told The Wall Street Journal: “I thought it was a regressive and thoughtless and unproductive way to raise money. But eventually I decided that as the need for money got greater and greater, it’s a little silly to be making a point of principle when you’ve got gambling casinos all around you.’’

Last week he said, “Some people abhor it; some people love it. It has public good and it has public bad, like the liquor industry, the gun industry, coal-fired power plants and banks, to name just a few. My job and eventually the job of the commission is, first and foremost, to maximize the public good and to minimize the unintended consequences.’’

A leading opponent of the gaming law, former attorney general Scott Harshbarger, praised the appointment and urged the commission to demonstrate “a new level of transparency.” “Steve is a bipartisan realist with strong credentials, demonstrated independence and impressive experience in both the public and private sectors. He is smart, tough and honest and I hope his selection sets the standard for strong appointments from the Governor, Attorney General and Treasurer,” he said in a statement.

However Les Bernal, of United to Stop Slots in Massachusetts, criticized the choice. "Who could have guessed that the best person to run a failed government program based on pushing people into deeper personal debt and creating addiction in order to feed off of it would have been another longtime government official,” he said, according to the State House News Service.

The powerful five-member commission (four other commissioners have yet to be named) will decide where to locate casinos, how much the license fee should be above the minimum of $85 million, and to set the percentage of payouts for slot machines—among a host of other regulations that have yet to be written. It will create a new regulatory bureaucracy, including an investigatory arm, from scratch, with a starting annual budget of $15 million. It will be able to issue subpoenas, impound slot machines and refer cases to the attorney general for prosecution. It will also oversee the mitigation agreements that casinos will have to make with communities that host them, as well as with neighboring communities.

Although it can authorize up to three regional casinos, it is under no obligation to do so if appropriate developers are not found.

The commission’s job, according to the governor, is to create as many jobs as possible and generate as much economic activity as possible. According to Crosby that translates into maximizing “the public goods, and minimize unintended consequences.”

Meanwhile the heavy hitters in the gaming industry are lining up to enter the high stakes content for winning the right to build one of the casinos that the commission will be regulating.

They include Caesars Entertainment, Wynn Resorts, Ameristar, Hard Rock International, Penn National Gaming and the Mohegan Sun, for starters.

The eastern zone, which includes Boston, has the most potential for being profitable. An investment group that includes Boston business executive Joseph O’Donnell, casino developer Richard Fields and Caesars Entertainment Inc. hopes to develop at casino resort at Suffolk Downs racetrack. This group was considered to have the pole position until the sudden entre by Steve Wynn and Robert Kraft.

Last week Las Vegas casino tycoon Wynn entered the fray to try to persuade a reluctant Foxboro to support his proposed casino resort in their town. He sent a letter touting jobs and even free employee day care to every resident of the town.

Wynn and New England Patriots owner Robert Kraft, who owns the land next to Gillette Stadium where Wynn hopes to build, unveiled the plans two weeks ago for a $1 billion casino and hotel resort. Their proposals sets them at odds to Suffolk Downs, which also wants to win the license to serve the western part of the state that includes Boston and Worcester.

The proposal surprised many Foxboro residents, who already feel the effects of NFL football and concerts in their town.

In his letter Wynn writes, “I can appreciate that some residents are fearful when they hear the word ‘casino,’” Wynn wrote, but bragged about his resorts, “They have wonderful spas, great hotel rooms, unique entertainment, prize-winning restaurants, and premier convention facilities. A gaming room, representing a small portion of the resort’s overall square footage, makes it possible to build these amenities.” As many as 10,000 casino and related jobs will result from such a resort, he wrote.

He assured residents that he doesn’t intend to build a Las Vegas-style casino of the type he is famous for. “What is appropriate for Las Vegas is certainly inappropriate for Foxboro, With your input, we will create a resort destination with the character of Foxboro at its heart.”

Meanwhile Kraft hit the town with a video that ran in the town’s cable access channel in which he declared, “I want the town of Foxboro to have the best school system and social services of any city or town in the Northeast and that can only happen with economic vitality.”

Opponents were not buying it. “It seems Mr. Wynn is counting on Foxboro residents to be dazzled by the same glitz and intrigue used to ensnare the gamblers in his casino,’’ said a member of the casino opposition. “At the end of the day, it’s still a casino, and it’s still a burden to our town, no matter how you dress it up.’’

Opponents plan to find as many copies of the letter as possible and to mail them back with this reply: “Thanks, but no thanks.” They have already formed a group called No Foxboro Casino, which has collected hundreds of signatures on an anti-casino petition.

One opponent, Stephanie Crimmins, said “The town has said no three times to this, and we thought it had gone away,” she said. With the two powerful businessmen behind the plan, “I said, ‘Oh my god, we have to take a stand!’”

Almost as soon as Kraft and Wynn made their initial pitch, protestors with signs began cropping up around town. If the protestors make up a significant percentage of the town they could kill the proposal since the law requires that a developer must win a community-wide election with two-thirds voting yes.

Last week the Foxboro Board of Selectmen in a meeting attended by 500 residents, with boisterous representatives of both sides, narrowly voted to allow Wynn to make a presentation to the town in January. Said board Chairman Kevin Weinfeld, “If we are going to consider it, we will need a very specific proposal and zoning that addresses it.”

He added, “They have a couple of billion invested in our town. If they do things that are perceived as appropriate in our community, they will get a return on their investment.”

That presentation will include a conceptual design. The board voted against giving Kraft and Wynn the zoning changes they had sought until after the presentation.

The crowd also included residents of neighboring cities, such as Walpole and Norfolk, which oppose the casino in Foxboro.

Suffolk Downs, on the other hand, would seem to have an easier path, in part because of a provision of the law that allows a casino to be approved by only the voters of the neighborhood in which it would be located, not the entire town, if the town has more than 125,000 residents, as Boston does. In such a case casino proponents would only have to win over residents of areas that are used to have racetracks operate in them. The now defunct Wonderland dog park is part of this area. Boston Mayor Thomas M. Menino is also a strong supporter of Suffolk.

Interviewed last week Menino commented about the Wynn, Kraft proposal. “To me, there’s so much excitement about what Bob Kraft is doing. It frightens me because there’s a process set up with a five member commission that will make the choice on where the casino will go in the future."

A third contender in this region is the town of Milford where developer David Nunes has teamed up with Warner Gaming to propose a casino resort. Nunes has been wooing town leaders and residents for several years.

In the western region the Mohegan Sun of neighboring Connecticut has been a strong presence almost from the moment that gaming expansion was first floated by Patrick four years ago. They want to build in a $600 million casino resort in Palmer near the Massachusetts Turnpike and have had a storefront in the town to woo locals for a couple of years.

Last week officials of the tribe met with residents and business people of neighboring Springfield to explain how their casino might benefit them. "We do have a commitment to buying locally and we use a variety of goods," said a spokesman for the tribe, according to Channel 3 Springfield. He noted that the Mohegan Sun casino in Connecticut spent more than $500 million locally in 2010.

Some merchants seemed interested in doing business with the tribe, although the president of the local chamber of commerce had mixed feelings. ""We're just concerned that with a destination casino that's going to mean that everything is going to be done at that site or in a very small footprint around the site," he said.

The Mohegan’s project coordinator, Paul Surprenant, added, "We're already your neighbor we've already built this base of customers we already have a good name brand in the area and it's easy for us to transition right into this area.”

Penn National Gaming Inc. and Ameristar Casinos are both interested in building in Springfield while Hard Rock International is aiming at Holyoke.

The provision of the law that gives the Mashpee Wampanoag first crack at acquiring land and negotiating a compact with the state has poured cold water on other would-be developers in the southeastern part of the state, which includes New Bedford, Fall River and Brockton, all former industrial towns that are now down on their luck and with high unemployment.

The law only gives the tribe until July 31, 2012 to put together a deal that include a land purchase and a vote of the host city. The tribe is not required to have put land into federal trust by that deadline, but must be able to show the gaming commission that there is a likelihood of that happening.

But the Mashpees have a powerful friend in their corner, the Genting Group, the largest casino developer in the world.

The tribe doesn’t appear to be moving quickly, although its chairman, Cedric Cromwell commented last week, “We’ll be celebrating in July,” according to Cape Cod Online.

Cromwell assured supporters that the tribe will meet the deadline and the license won’t be released for anyone who wants to do bid on it. "That's not going to happen. We're moving forward. We're committed to our sovereign rights and getting our initial reservation approved."

The Patrick administration insisted that a provision for the tribe be included in the law. According to a Patrick spokesman "It was necessary for the expanded gaming legislation to include a mechanism to capture revenue for the commonwealth while acknowledging the reality of the Mashpee Wampanoag tribe's federal rights to legally conduct gaming on tribal lands.”

Although the tribe’s chances of putting land into federal trust have diminished since the 2009 “Carcieri” decision by the U.S. Supreme Court that tribes recognized after 1934 cannot create reservation land, Patrick wanted to lock the tribe into an agreement whereby it pays some percentage of its casino profits to the state.

Cromwell counters those who cite the Carcieri decision by noting that the Bureau of Indian Affairs last year took land into trust for the Cowlitz Tribe of Washington, which, like the Mashpees, obtained federal recognition several years ago.

The Mashpees, in obtaining that recognition, were able to demonstrate that the tribe existed as far back as 1665.

Nevertheless, the tribe has acquired something of a flighty reputation since it has wooed and then dropped two communities, Middleboro and Fall River, in its search for a suitable casino site.

Some press reports have the tribe interested in 170 acres in Bridgewater near the junction of Routes 495 and 24.

The special deal for the tribe has prompted a lawsuit in federal court by a developer who had hoped to acquire a license to operate in New Bedford on the waterfront, K.G. Urban Enterprises.

In initial filings, the state has argued that the new law does not give the tribe any rights that it doesn’t already have as a tribe able to put land into federal trust. That argument would seem to ignore the Carcieri decision.

The provision in the law that requires that a developer win over the population of the host city may be the key to which developer eventually wins a casino license, although the gaming commission has the final say between communities where voters do support a casino.

By Staff