Penn National Gaming this week will open Plainridge Park Casino, a 0 million, 1,222 slot machine facility that will be Massachusetts’s first casino.
The slots parlor will also have electronic blackjack tables, two eateries, including a fine dining restaurant and a Doug Flutie sports bar and a food court at the June 24 opening. The town of Plainville is betting on success, since that will mean that the casino will pay $4 million every year to the municipal government.
Massachusetts Gaming Commission Chairman Stephen Crosby last week confirmed that that he is being investigated by the state ethics commission over allegations that he participated in awarding the Boston metro (Region A) license. He did this, says the accusation, despite recusing himself in May of 2014 from the process due to a previous business relationship with one of the owners of property that Wynn Resorts later purchased for its $1.7 billion Wynn Everett casino. The commission voted last September 3-1 to award the license to Wynn instead of to Suffolk Downs Racetrack in Revere.
Wynn Resorts is in the opening stages of building its resort along the Mystic River in Everett, just across the river from the Charlestown neighborhood of the city of Boston.
The accusation is based on a sworn affidavit to the state Ethics Commission, according to a story that appeared in the Boston Globe. The Globe story stated, “The ethics commission decided to launch a preliminary inquiry after receiving a sworn statement alleging that Crosby, the chairman, ‘actively participated’ in the gambling commission’s work on the Eastern Massachusetts casino license after he officially recused himself from the proceedings.”
Other commissioners lined up to defend the chairman. Before the most recent commission meeting Commissioner James McHugh said he was not aware of any such attempt by Crosby to interfere in the process when he was staying away from the meetings.
McHugh, who was acting chairman while Crosby was sidelined declared, “At no time after he recused himself on May 8th, did Chairman Steve Crosby offer to me, publicly or privately, any suggestion, opinion, or hint whatsoever about how any aspect or component of the Region A licensing decision should be resolved.”
Fellow Commissioner Enrique said, “That is exactly the same case for me. And I think anybody that has doubts about the process ought to just look at the record. Because it’s all on the record.”
The two other commissioners, Gayle Cameron and Bruce Stebbins nodded their heads in ascent to those remarks.
In his statement acknowledging the investigation, Crosby wrote, “I am fully cooperating with what I understand to be a preliminary inquiry and I look forward to an expedient resolution of that inquiry.”
Such inquiries by their very nature are confidential, so it is unlikely that details will be revealed other than when the ethics commission issues its findings.
Crosby’s actions relating to the Wynn license have been under steady fire for more than a year. The commission is the target of the city of Boston’s lawsuit fled in January challenging the awarding of the license, in spite of the fact that Crosby didn’t participate in that process. The lawsuit alleges that the commission’s decision was a corrupt process and that the commission favored Wynn from the start.
Former Governor Deval Patrick appointed Crosby to head the commission in December 2011. Although his tenure has been frequently controversial, Crosby has said he intends to serve out his seven-year term, in spite of their being a new governor, Charlie Baker, who took office earlier this year. “My expectation is to stay on and probably try to bring these casinos to fruition,” Crosby told the News Service.
He added, “The Ethics Commission has actually written me a letter saying—prior to this—saying that I’m doing all the things I should be doing. But you know, people have a right to raise questions and the Ethics Commission will do its thing.”
Baker has so far declined to comment on Crosby’s performance or fate, except to tell reporters last week, “Look, the Gaming Commission was set up as an independent entity by the legislature and I think the key issue at this point is the question that’s been raised, that’s in front of the Ethics Commission.”
He added, “I expect the Ethics Commission to do their job and I think that’s really sort of where the next step rests in all this.”
Springfield MGM
It appears that MGM Springfield may have to trigger a clause in its community host agreement with the city of Springfield that would allow it to delay the opening of its casino for circumstances beyond “reasonable control.”
City officials revealed last week that MGM is requesting a delay from the original late 2017 opening date so that the casino will open at the same time that the Interstate 91 viaduct project that will begin this summer is completed, which is estimated to be as soon as February 2018 and as late as August 2018. The contractor has a $9 million incentive to finish early.
MGM hasn’t commented on whether it has made such a request except to say it will bring up the construction schedule and permitting delays with the Gaming Commission on June 25. City officials have agreed that the project will create traffic issues and should be coordinated with the casino project.
The city’s consent is required for a delay in the 33 month building timeline, according to Spring City Solicitor Edward Pikula, who told the Republican, “However, like all major construction project agreements, MGM, under certain defined circumstances beyond its reasonable control, may be entitled to a grace period if such circumstances have occurred and will delay its obligations.”
Various contingencies can trigger the clause, such as labor disputes, Acts of God, wars (e.g. effects of nuclear radiation) and impacts to major modes of transportation serving the casino.
Whether or not the casino opening is delayed, MGM assured the city this week that it will make $7 million advance payments to the city, according to schedule. The schedule calls for a payment of $4 million in July and $3 million in October. City officials, including the city administrator and city solicitor met with MGM Springfield President Mike Mathis and Vice President Set Stratton.
Wynn Everett
Despite the ongoing lawsuit to try to stop the Wynn Everett from ever happening, Boston Mayor Marty Walsh last week met with representatives of the gaming giant. This was the first such meeting since the lawsuit was filed in January.
Walsh initially fought for Boston to be designated as a “host community,” even though the casino will be in neighboring Everett. Such a designation would have given it a veto over the casino and forced Wynn to pay the city more money than it has so far been willing to do.
The commission denied this request last year and negotiations fell apart between the city and Wynn for a “surrounding community” agreement for mitigation, among them being the traffic impacts that the casino will have on Charleston.
Given the intractable nature of the lawsuit against the casino, reporters asked Walsh the purpose of the meeting. Walsh told Boston.com that Wynn officials sought the meeting, “They reached out to us to talk about transportation issues in Charlestown. There’s an open lawsuit right now so we really couldn’t get into the particulars. They reached out to me to see if we could have a conversation, and I accepted the offer. And we sat at City Hall and we spoke a little bit about hypotheticals.”
Asked whether Wynn might be able to end the lawsuit by making an acceptable offer, the mayor first said “No,” then added, “No comment,” and then “It’s not a number for me, it’s about respect for Charlestown.”
Last week the Walsh administration upped the rhetoric a notch when its transportation commissioner Gina Fiandaca sent a letter to Wynn and the commission accusing the gaming company of misrepresenting the progress it has made with Boston city permits to the Gaming Commission. Although the casino will not be built in Boston, Wynn needs a permit from the Public Improvement Commission to make road changes in Charlestown. According to Fiandaca Wynn has yet to file for this permit. Wynn concedes that it has not filed a formal application, but says it has submitted an engineering report and other plans that would enable it to meet requirements of the license the commission issued last fall.
In her letter Fiandaca demanded that Wynn stop referring to the engineering report a an “application.”
Wynn has begun site preparation for the casino resort, which resulted in Idle Hands Craft Ales, a popular local craft brewer getting an eviction notice. The land, which Wynn purchased in February, is being cleared for a construction access road.
A spokesman for the brewer said they had thought they had a little more time to leave. They had planned to leave anyway because the current site was too small.
Southeastern Casino Zone
Massachusetts Gaming & Entertainment, which on May 12 won a narrowly decided town referendum to let its proposal for a $650 million casino resort on the Brockton Fairgrounds, spent $1.6 million to persuade the voters, compared to $3,627 spent by Stand Up for Brockton, the opposition group.
Richard Reid, treasurer for the group and a local pastor, commented, “It’s been said that if a candidate gets outspent 3-1, he never wins. It’s absolutely amazing that it was that close with that much of a difference in the spending ratio.”
Massachusetts Gaming & Entertainment is a subsidiary of Rush Street Gaming. Joe Baerlein a spokesman for the developer argues that his people were actually fighting an uphill battle. “No matter what we did, there were, I think, unfounded concerns about traffic and the location of the high school to the fairgrounds,” he said, adding “In a 90-day campaign, no matter what we did we are never going to have the time to make that case.”
Brockton is competing for the Southeastern license with New Bedford, where voters will express their will on June 23.
With the opening of Massachusetts’ first casino impending in Plainville on June 24, the Massachusetts Gaming Commission set in motion the Voluntary Self-Exclusion Program that facilitates problem gamblers who want to ban themselves for terms ranging from six months to life.
Mark Vander Linden, director of responsible gaming and research for the commission, told the Boston Herald that voluntary self-exclusion, “is a common practice at casinos across the country, but it’s just one tool to give people control.” He added, “It’s when a person seeks help that you see greater positive outcomes.”
The Plainridge Park Casino will have an office, the GameSense Info Center, where persons wanting to enroll in the program can start the ball rolling. Once they are enrolled, all four of the casinos in Massachusetts will have their names and photos on file. If recognized they will be escorted out. If they win large amounts, which require showing ID, they won’t be able to keep the money. It’s a completely voluntary program, and people can end it when they wish, with the stipulation that they submit to an exit interview.
In addition to encouraging people to sign up for a program that bars them from the casinos, the commission is also inviting prominent casino opponents to join a panel that will advise commissioners, the Gaming Policy Advisory Committee.
One of these is Bill Walczak, an unsuccessful candidate for Boston mayor in 2013 who ran as an anti-gaming mayor. He will be joined by former state Rep. Thomas Conroy who unsuccessfully ran for state treasurer last year. Both will offer “constructive” advice; according to commission chairman Stephen Crosby. They will provide a voice to the 40 percent of the population who backed an initiative last year that would have repealed gaming, he said.
The panel is required by the 2011 law that authorized the three casinos and one slots parlor in the Bay State.
Besides being a former candidate, Walczak was once chief executive officer of the Codman Square Health Center and founding president of the Massachusetts Nonprofit Network. Conroy served in the legislature for eight years, where he chaired the Joint Committee on Labor and Workforce Development.
Although 40 percent may have voted to keep the Bay State’s casinos from going forward last November, 72 percent of adults surveyed said they have gambled in some form in the last year. About 60 percent played the lottery and 22 percent went to a casino outside of the Bay State.
The poll, which has been called the most extensive survey of gambling every conducted in the nation was done by the University of Massachusetts Amherst’s School of Public Health and Health Sciences, is entitled the Social and Economic Impacts of Gambling in Massachusetts. Almost 10,000 residents were surveyed. The survey team presented its findings to the Massachusetts Gaming Commission last week. The 2011 gaming expansion law mandated the survey. It was conducted between September 2013 and May 2104.
Although the great majority of those surveyed gamble, and 59 percent said that casinos would benefit the state, 46 percent also believe that casinos in their own towns will have a detrimental effect.
About 1.7 percent was listed as having a gambling problem with 7.5 percent listed as at risk gamblers.
More men than women gamble, and are three times more likely to have a gambling problem while blacks are three times more likely than whites to have a problem.
The survey was conducted before the first casinos come on line in order to provide a baseline for future surveys that will be conducted to assess the affects on casinos statewide and especially in the communities that host them.
Rachel Volberg, who led the team of investigators, told the commission, “Not many people realize how unusual it is for a problem gambling survey to be completed before some new type of gambling becomes available. The commonwealth is fortunate that both the Expanded Gaming Act and the Massachusetts Gaming Commission so clearly and forcefully supported such an effort and I am excited to share our findings before any casinos begin operations in our state.”
The commission issued a statement about the survey: “While these key findings offer a lot of information about gambling and gambling-related problems in Massachusetts, the SEIGMA Research Team is planning deeper analyses of the data in coming months,” adding, “These analyses will examine factors that may contribute to or cause problem gambling, relationships between gambling attitudes and gambling participation, and factors associated with particular types of gambling.”
The next survey will be conducted one year after the three casino resorts and one slots parlor have begun operating. In tandem with the surveys, the team is also doing an economic and fiscal impact study on gaming.
Lottery to Defend Turf
Meanwhile, state Treasurer Deborah Goldberg is anticipating the opening of the Plainridge casino with something approaching trepidation, at least as it relates to the Massachusetts Lottery, which she oversees.
Last week she told the audience of the Greater Boston Chamber of Commerce that the lottery will have to adopt a new proactive stance to protect itself from casinos. Lottery profits assist municipalities, so Goldberg will be under pressure to maintain them, and even expand them.
Part of her strategy is to deploy new wireless technology and replace old hardware and terminals. She also wants to spend a larger percentage of the lottery budget on advertising, noting that the lottery is dead last in spending among all of the state lotteries. She plans to meet with lottery retailers to get their ideas on what needs to be done to keep the local convenience store lottery retailer competitive with the big casino resort.
Right after she took office Goldberg predicted profits less than the previous year because state budget cuts prevented the lottery from rolling out three instant ticket games. Since 70 percent of lottery sales come from instant tickets, the delay represented a significant hit.
Lottery sales for the fiscal year ending June 30 are expected to be $935.4 million, compared to $947.8 million in 2014.
Lottery Executive Director Beth Bresnahan will be leaving the Lottery next month. Her temporary replacement will be the current Treasurer deputy general counsel Michael Sweeney.
