Four days before the Encore Boston Harbor opened in Everett along the Mystic River overlooking the Boston skyline, the Massachusetts Gaming Commission voted 5-0 to award it its conditional operating certificate. That means it can operate 24/7 with 3,151 slot machines and 231 gaming tables. That certificate will be good for the 15-years of the casino’s license.
Bruce Band, gaming agents division chief for the Gaming Commission, commented, “Things are running well in there, and the counts are going well,” adding, “All the teams seem to be running efficiently.”
Transportation and traffic congestion due to the casino’s opening had been a major concern leading up to the event, which happened on a Sunday morning to lessen the impact on commuters. After a week of operating Robert DeSalvio, president of Encore Boston Harbor told Commonwealth Magazine: “This whole week it’s been relatively good,” said DeSalvio. He noted that the $1 million the company spent on ads to inform the public about the various alternatives to driving to the casino such as public transit, shuttles, or boats, worked. “People really did take advantage of the options. We had over a thousand people come by water on the first day.”
One commissioner was excited to see a “remarkable amount” of bicycles parked in the employee parking area.
Governor Charlie Baker is expecting a report within a month or two that will better help state and local officials in knowing just how much the casino has impacted what is already considered to be a major problem.
Now that the $2.6 billion Encore Boston Harbor has opened to almost universal praise, and without any major problems Wynn Resorts Ltd. CEO Matt Maddox is finally getting some sleep.
Shortly after the casino opened in the CEO told the Las Vegas Review-Journal, “Twenty-four hours before you open, you can’t be nervous anymore. A week ago? No sleep. Two weeks ago? Very little sleep trying to figure out how we were going to get to today. I’ve been here for most of the spring working with the team here. But as of last night, we felt good.”
For the next three years, whatever Maddox does and says and feels, he will have an independent monitor second-guessing him and passing on his or her conclusions to the Massachusetts Gaming Commission.
That requirement was imposed on the company in May as part of its settlement with the commission for being allowed to keep its casino license. A license that was in jeopardy for the better part of a year due to an investigation the MGC conducted on the sexual allegations against the company’s founder and longtime CEO Steve Wynn. And more importantly, how the company’s various executives, especially Maddox himself, dealt with those allegations before and after they became public when the Wall Street Journal released its expose in January 2018.
The commission also imposed a record $35 million fine on the company and a personal fine of $500,000 on Maddox. Not for actually doing anything wrong, but apparently for lacking leadership skills and not being tuned in enough to know that his mentor, Wynn, had faced multiple accusations of sexual misconduct and even paid a settlement of $7.5 million to one of his accusers. Steve Wynn continues to deny any sexual impropriety or harassment.
That monitor is not yet in place. The commission will be choosing that individual, who will be paid for by Wynn, sometime this month after a competitive bidding process. The monitor will be in place at least three years and possibly as much as five years.
Maddox told the Review-Journal that having a monitor won’t make him feel uncomfortable. “If you look at the request for proposals that the Massachusetts Gaming Commission put out for the independent monitor and what they’re monitoring, we think (it) makes sense and we’re very comfortable.”
Maddox said the customers, gaming regulators and the employees also look over his shoulder at all times. “So we are very used to having lots of third parties interacting with us, so I don’t see any issue with it.”
Besides, Maddox has now fixed his gaze on the next goal for the global gaming giant. But that could be more developments in the urban casino style of the Encore Boston Harbor.
He told the Review-Journal: “The ability to have a cooperative city, a mayor with vision and lots of land to develop in a metroplex with over 5 million people is a new beginning for Wynn Resorts.”
Wynn is poised to seek new gaming opportunities in New York state and Chicago, Illinois should they become available. New York has recently approved regulations to allow sports betting and Illinois Governor J.B. Pritzker signed a bill that allows as many as six new casinos in the Prairie State, including a massive Chicago casino.
Maddox said, “As these types of opportunities come up, we think Encore Boston Harbor is a great example of a public-private partnership to really drive home great things for both the community and the company.”
Industry observers say that casinos in major gateway cities such as New York or Chicago would be a continuation of the Boston strategy that was originally conceived by the disgraced CEO but undoubted visionary Steve Wynn.
Maddox notes that his company is completing several new projects at Wynn Las Vegas, including opening a new golf course and new convention center, more dining options and a new nightclub. “So Wynn Las Vegas is going to get a nice refresh of new product, and I think that’ll be really exciting. The convention center is 400,000 square feet. Our golf course we’ve worked on with designer Tom Fazio is going to be better than it was. And we’re bringing in some new, interesting concepts on the restaurant side,” he told the Journal.
The company has no immediate plans yet for 38 acres on the Strip near Wynn Las Vegas that it bought two years ago for $336 million.
The company is also amidst a refurbishing of its first casino in Macau and an expansion next to the Wynn Palace: a 1,300 hotel tower.
One of the contractors that helped make the Encore Boston Harbor a reality claims that the company still owes it $30 million in change orders.
The Worcester Telegram interviewed Sue Mailman, president and owner of Worcester-based Coghlin Electrical Contractors Inc., who declared, “It infuriates me. A lot of subcontractors are reluctant to talk about it because they don’t want to damage their business with general contractor Suffolk Construction or Wynn Resorts. I can’t just not talk about it.”
Michael McDonagh, chief executive officer of Associated Subcontractors of Massachusetts confirmed that several subcontractors are affected. “It is many millions of dollars spread across multiple companies,” he said.
Wynn claims it has paid all its invoices: “Subcontractors work directly with the contractor, not Encore Boston Harbor. Encore Boston Harbor has no outstanding invoices with Suffolk Construction. The relationship between Wynn Resorts and Suffolk has always been cordial and professional.”
The MGC’s general counsel says it is monitoring this situation and will bring any outstanding issues to the attention of the commission itself.
According to Mailman, the issue has been ongoing since February 2018, when her company had a $50 million contract. The casino approved change orders, which is the contracting term for additional work, for $14 million. The change orders can take up to six months for the company to address them, says Mailman. “It really shifts the balance of who’s financing the jobs.”
McDonagh confirms that the issue is not business as usual. “It’s absolutely an extraordinary amount of time. This is many, many months and it’s to the point where it is financially impacting subcontractors, our members, financially impacting them to sustain their business.”
McDonagh said Coghlin didn’t experience this issue when it was a subcontractor for the MGM Springfield or Plainridge Park Casino. “We witnessed something completely different at Everett casino than we witnessed at Plainridge and MGM.”
Both are skeptical of Wynn’s implication that the fault lies with Suffolk. “I believe it’s all about the owner’s business practices,” Mailman told the Telegram.
McDonagh added, “For Wynn to say they haven’t done anything wrong because they paid Suffolk, they can’t hide behind that. Suffolk and Wynn are partners on this and in the normal situation, the partners work together to ensure that subcontractors are paid in a timely manner.”
Both note that this sort of behavior flies against the intent of the casino, which is to generate economic activity and create jobs. If a company is hurt by the process, it doesn’t achieve that purpose.
MGM Springfield
The $960 million MGM Springfield has closed its Starbucks in the hotel lobby and will replace it with a new VIP lounge. The Starbucks’ employees will be reassigned to other jobs in the casino.
The casino, which opened in August, has been readjusting various elements of the resort since then. It has changed the mix of slot machines and added a weekend brunch buffet at its seafood restaurant.
MGM President Michael Mathis recently told the MGC that it blamed part of its less than predicted revenues since the opening on fewer VIP players than expected. The VIP lounge may be a response to that problem.
Mathis issued a statement on the VIP lounge: “We are continuously looking for ways to improve the guest experience at MGM Springfield. This exclusive new enhancement for our most loyal and discerning guests will further our growth strategy as the market leader in luxury leisure travel.”
According to Alan Woinski, president of Gaming USA, casinos often spend 10 times more on advertising to attract “whales” than it does on the average player.
The MGM Springfield has both VIPs and Super VIPs. VIP perks can include throwing out the first pitch at a Red Sox game, flying first-class with the New England Patriots to an away game, or drinking from a bottle of $10,000 spirits such as an engraved Hennessy bottle.
MGM flew one special guest to the Masters Tournament and arranged for another to play at a celebrity golf tournament.
The region’s casinos are constantly sniping at each other. Foxwoods tossed a verbal grenade at the Encore Boston Harbor soon after it opened, snarking: “Why pay $42 for parking at a Boston Casino? Play FoxwoodsONLINE from the comfort of your own home and earn Rewards you can use at Foxwoods Resort Casino, where parking is always free.”
Wynn Resorts has a reputation for attracting the wealthiest, and most profitable players. Wynn obtains top tickets to Boston Red Sox, Bruins and Celtics games, and for the more cultured, to the Boston Symphony Orchestra. The Encore’s top-floor Presidential Villa has panoramic views of the city and starts at $15,000 a night.
At the Mohegan Sun they have a private helipad to bring in VIPs from Boston, New York City, New Haven and Hartford. The Sun operates “Aspire” a hotel within a luxury hotel within a hotel at its Sky Tower for VIPs with private elevators, butler service and welcoming gifts.
Foxwoods has a luxury hotel called The Villas, which offers 24-hour butler service and room service.
Meantime, the MGC granted the casino a one-year extension to open a Wahlburgers restaurant at the corner of Maine and Union Streets. The restaurant will be opened by Actor Mark Wahlberg and two brothers.
According to a spokesman for the casino, “The original date was driven by finding a suitable tenant. Because it took longer than expected top identify and enter into a lease with a suitable tenant, the schedule for development of this space was delayed.”
The city of Springfield has extended an interim agreement with the MGM Springfield to allow both parties time to complete a long-term contract for the casino to manage Symphony Hall.
The city gave the management contract for Symphony Hall back in March, but under a four-month interim agreement that ended June 30. The city expects to pay MGM $43,333 per month to manage the hall.
The city wants to finalize a five-year management contract with MGM. The hall will continue to be the home for the Springfield Symphony Orchestra, and MGM will be responsible for “event and production management, calendar management, security and usher labor, event booking and sales, management of existing food and beverage vendors, user/licensee relations, and ticketing and box office.”
The city will keep revenues, proceeds and user fees from events.
MGM took over management of the nearby MassMutual Center in 2017. That facility is owned by the Massachusetts Convention Center Authority.
Recently, Massachusetts State Troopers reviewing records from the MGM Springfield detected activity that suggested money laundering. This led to the arrest of two brothers from Braintree, Massachusetts, on charges of marijuana trafficking and money laundering.
Prosecutors wrote that Wai Eng, 44 and Aibun Eng, 46, were “running a scheme to launder proceeds from their multistate marijuana trafficking operation through MGM Springfield and other casinos in Connecticut, New York, and New Jersey.”
The investigation was a team project of the state’s Gaming Enforcement Division, the State Police, the State Police Gaming Enforcement Unit and the Enforcement Bureau of the MGC. The MGM Springfield fully cooperated with the investigation.
