Bay State Betting Begins

The first casino in Massachusetts, Plainridge Park Casino, opened last week, launching the casino era in the state with a slot parlor-racino. Meanwhile, New Bedford voters by three-to-one margin approved a casino resort for the waterfront in that town, which would likely be the last casino to open. And MGM Resorts has asked for a delay of a year in opening its casino resort in Springfield.

Massachusetts opened its first casino, the Plainridge Park Casino, and New Bedford voters overwhelmingly endorsed a casino resort on the waterfront of the town, which is still the nation’s busiest commercial fishing hub. However, a few days after Plainridge’s opening, MGM Resorts asked for a delay in its opening due to the many obstacles it has encountered since obtaining its license to build in Springfield.

Plainridge Park Casino’s opening was greeted by a large and enthusiastic crowd, including hundreds of VIPs who cheered as the ribbon was cut by casino officials, Gaming Commission Chairman Stephen Crosby and a couple of Las Vegas style showgirls.

Doug Flutie, a former New England Patriots quarterback, made an appearance for the opening of his restaurant and sports bar, named after him. He commented, “Look at this place—it sparkles.”

“It’s showtime!” declared Crosby, who has overseen the casino approval process from its inception four years ago. He added, “Take a look at this facility. Take a look at 500 quality, high-paying jobs.”

The Bay State becomes the 40th state to add gaming.

“This is as big a change in the cultural, social, and economic face of Massachusetts as I have seen in almost 50 years,” said Crosby. “It’s creating new jobs, state revenue, and economic development.”

The $250 million slots-only parlor has 1,250 slot machines in a facility adjacent to the existing harness racing track, Plainridge Racecourse. The 90-acre property is 35 miles south of Boston and 18 miles north of Providence.

Situated near the border with Rhode Island, one of the hopes is that it will prevent Bay State residents from crossing into that state to play at Twin River Casino in Lincoln, or to go further to Connecticut to play at the two tribal casinos there: the Mohegan Sun and Foxwoods.

One of the state’s residents who frequently bets at Twin River, Doc Palmer, told the Las Vegas Sun that he goes where the best money is. “They pay out good at Twin River. If they pay out better here, I’ll come here,” he said.

A Lakeville resident, Rick Krupnick told the AP, “This is a really nice place but it’s long overdue. Massachusetts has been lagging way behind with gambling.”

Plainridge, which is owned by Penn National Gaming, will operate 24-7, although no alcohol is served after 1 a.m. and no smoking is allowed anywhere in the casino. It is the smallest of the four casinos planned, and the only one that will not have gaming tables.

Penn National CEO Tim Wilmott commented on the opening, “It’s never easy being the first operator in a new jurisdiction.” He told well wishers: “Have fun in this place. We’re going to be here a long time.”

Several days before the opening Plainridge General Manager Lance George told the Boston Globe, “This opening introduces a new industry to the state and marks the beginning of a new era for Massachusetts There are sure to be growing pains, but it’s very exciting.” He added, “I think people in Massachusetts are ready for this. I am confident they will come out to our new facility.”

According to George, the casino has gotten 4,000 applications for 375 fulltime and 125 part-time positions. “We’re putting a lot of people to work,” he said.

It will also produce an expected $250 million in revenues, of which it will pay the state $100 million, with another 9 percent set aside for the horse racing industry. The lion’s share of the tax money is pledged to municipal government for such things as police and teacher salaries.

Industry watchers wonder if the Bay State casinos will be as profitable as casinos in, say, Las Vegas, where the tax rate is much lower. Nevertheless, Plainridge officials are aiming at collecting nearly $500 a day from each machine.

Says George, “It’s aggressive, but there’s precedent for it. We are cautiously optimistic that we will make it.” He hopes to accomplish this with an aggressive loyalty program that can earn points for drinks, food and free play.

Paul L. DeBole, a gaming regulation specialist who teaches political science at Lasell College, is skeptical. He told the Globe, “I don’t see Plainridge getting that kind of money. Almost twice what Foxwoods does on its machines? I don’t think so.”

George is doing his best to combat the use of the term “slots parlor” when describing Plainridge. “We are different from what most people think of as a slot parlor,” he said last week.

Overwhelming Vote

The positive vote in New Bedford gives the city a powerful bidding spot for the Bay State’s third and last casino resort license for the southeastern part of the state. The New Bedford proposal includes a $650 million casino resort with 120,000 square feet for gaming, including 2,500 slots, 90 gaming tables, a 300-room hotel, retail and dining.

This was the third time in two decades that New Bedford voters were asked to register their support for a casino project and they didn’t disappoint. They voted 8,355 to 3,040 or 73 percent to 27 percent for the proposal, with 21 percent of registered voters going to the polls.

KG Urban’s proposal includes a $650 million casino resort built along the waterfront. Foxwoods, the casino development company that operates the Foxwoods casino in Connecticut, will manage the casino. The developer will be KG Urban Enterprises, a consortium that includes former Foxwoods CEO Scott Butera.

Mayor Jon Mitchell was an enthusiastic advocate for the proposal, so the win is a feather in his political cap. But he exacted concessions from the developer, insisting that the casino resort integrate into the downtown area. He has also promised to use the city’s share of the profits to bring other economic development to the city.

The host community agreement that Mitchell negotiated with KG Urban obligates it to pay the city $12.5 million annually, and make a one-time payment of $4.5 million, plus another $10 million to build a harbor walk. It will also spend an estimated $50 million for environmental clean up on the 43 acre site associated with the former occupant of the property, a power plant. The casino itself will take up 30 acres.

Mitchell hailed the election results, “Obviously, we are very pleased. This is validation from the voters that the deal we got is a good one for the city. We look forward to competing for the license and returning New Bedford to its status as one of the leading cities in the Northeast.”

KG Urban Managing Director Andrew Stern declared, “Tonight’s about the people of this city. They gave us 73 percent. I should say to them, it’s on your harbor and your waterfront and starting tomorrow as we start to put our formal application together to the people that gave us the 73 percent tonight, you’re a partner every step of the way.”

During the campaign Stern promised that the casino resort would generate about 12,500 jobs. That includes 6,000 direct jobs and another 6,000 of what Stern calls “induced” jobs created in a ripple effect on other industries.

The leader of the opposition, Pastor David Lima, said that the city’s high jobless rate created the outcome. He told the Boston Globe, “The casino companies look for cities with high unemployment to come into because those are the only places where people will vote for them. But casinos aren’t for the communities. They are for the profits. The big problem with casinos is they take money from the people who can least afford to lose it.”

Voters commenting after leaving their polling stations confirmed that jobs were a major factor in their vote. The casino developer has promised that 6,000 jobs will be generated by the project. New Bedford has the state’s highest unemployment rate: 6.3 percent.

“I voted ‘Yes’ because I think it’s going to be an advantage for the city,” Mike Gelimas told the Providence Journal, “The cleanup part is huge and it’s going to help the economy.”

Robert Gifford told the Associated Press: “New Bedford needs to make a change. We don’t have many choices. Where else are we going to get the jobs and the revenue?”

A voter who opposed the casino, Sean Peters, declared, “The city has enough problems. We don’t need to add to that.”

KG Urban spent a reported $300,000 during an intense three-week campaign leading up to the election.

The question of whether New Bedford would have a casino proposal played itself out over several years. As Massachusetts Gaming Commission Chairman Stephen Crosby described it on election night: “New Bedford has been a long hard slog. For a long time the mayor was opposed to it, but finally they struck a deal that the mayor thought was a good deal for the city and he is now supportive.”

The city’s fishing industry was the single largest interest group opposing the casino, although not officially. Many feel that the casino might crowd them out of the waterfront area. One fisherman told columnist David Collins, “It’s a working waterfront. I don’t think it’s a good idea.”

Now New Bedford will fight it out with Brockton, whose voters also supported a casino for Brockton Fairgrounds, but with a much slimmer majority. They voted 50.5 percent to 49.5 percent for a $650 million casino on the Brockton Fairgrounds.

The Massachusetts Gaming Commission will make the final decision between the two proposals—probably by the end of the year. It could also decide not to issue a license to either.

The commission has given a clear signal that it wanted to have at least two proposals to choose from. It gave New Bedford two extensions on its deadline to find and finalize a deal with a financial backer. Commission Chairman Stephen Crosby has said in the past that the state will get a better casino if there is competition.

Last week he told reporters, “We will still go forward even if we only had one bidder, we’d just prefer to have more for the obvious benefits.”

MGM Springfield Delay

MGM Springfield this week submitted a revised schedule for its casino in the city’s South End, requesting the commission to allow it to delay its opening until August 2018, citing delays caused by a large highway project nearby.

The original opening date for the $800 million casino resort had been the fall of 2017.

Michael Mathis, president of MGM Springfield, told the panel, “At this point, we want to make sure we open the best way we can. The industry is littered with many examples of companies that made the wrong decisions for opening. Those are long-lasting decisions that take a long time to recover from. In a very competitive environment, we may lose some of these customers, frankly, forever.”

Since the groundbreaking in March the project has encountered delays, one of the principal ones being from the state and local historical commissions that were concerned about preserving as much of the South End’s historical architecture as possible.

Mathis explained that the major roadblock right now is the upgrade to the Interstate 91 highway that will serve the casino. The work is expected to create congestion around the casino construction site. It won’t be complete until the summer of 2018, although the contractor could earn a bonus if the work is done earlier.

Commission Chairman Crosby appeared to agree with the reasoning. “There are going to be a lot of unhappy folks when that construction starts,” he said. “You don’t want people driving up and down 91 thinking it’s the casino causing them to have those 20 minute delays.”

Springfield Mayor Domenic Sarno supports MGM’s request, which will require amending the city’s host community agreement with the developer. This is the first amendment made to the agreement.

The commission will vote on the request at a later meeting.

The city of Springfield this week will consider an amendment to the casino property boundary to reflect that a law building on Columbus Avenue is not part of the casino’s overlay zone. Businesses within the zone are entitled to remediation for traffic impacts.

Shortly before the opening of the Plainridge casino, speaking before the Boston Chamber of Commerce, Crosby predicted that gaming will bring 10,000 jobs and $400 million a year in tax revenues to the state.

Bay State residents currently spend $5 billion on the lottery, $10 billion in out-of-state casinos and about $5 billion in online gaming, horse racing, bingo and illegal gambling. Crosby predicts that once all four casinos are open, the state’s expenditure on gaming will increase by as much as $8 billion annually.

He also predicted that the casinos would have a major impact on money leaving the state for Connecticut. “We will hurt the Connecticut casinos badly,” he said, according to the Boston Globe.

The State Ethics Commission recently cleared Crosby of any ethics violations. In his speech he alluded to the accusations: “Some of the challenges to the commission have been made in good faith, some sour grapes,” he said.

One of those accusations came from Boston Mayor Martin Walsh, who has sued the commission over its awarding of the Boston Metro license to Wynn Resorts, and has called for Crosby’s removal from the commission.

The “sour grapes” that Crosby referred to probably is a reference to the fact that Walsh backed the losing horse in the competition for the license, the Suffolk Downs proposal in Revere that would have paid $18 million a year to the city. Crosby said that the commission went out of its way to keep the Suffolk Downs in the process after Boston voters turned down that proposal.

Crosby was accused of impropriety during the licensing process for the Boston license, a process that he recused himself from. The commission took no action on the complaint.

The same day the state attorney general, Maura Healey, declined to act on a complaint by the Mashpee Wampanoag tribe that accused the commission of violating state law, which forbids table games like roulette at the slots parlor. The tribe claimed that the electronic versions of the game, which Plainridge does offer, violated that stricture.

The tribe has applied to put land in Taunton into trust for an Indian casino, and so might someday be competing against the Plainridge casino.