The city of Boston has lost its suit in a Suffolk Superior Court challenging the Massachusetts Gaming Commission’s decision to award a casino license to Wynn Resorts to build a .7 billion facility in Everett.
In her 24-page decision Judge Janet Sanders wrote that the commission was within its rights to issue to license, and that Boston has not legal standing as a host community because Everett is outside of the jurisdiction of the city.
“The undisputed facts show that the commission did not violate either the Gaming Act or its regulations. The upshot is that the entire complaint must be dismissed.”
The city, which has already spent in excess of $1 million in its lawsuit, says it is reviewing its options, including an appeal.
The decision is a blow for Mayor Marty Walsh, who has fought a stubborn battle against the casino ever since the casino developer that he backed, Suffolk Downs, did not win the license. Suffolk Downs, although also outside of Boston, gave the city much more generous monetary compensation in its surrounding community agreement than Wynn would agree to. This friction between Walsh and Wynn has led to an increasingly acrimonious legal and public relations battle between the two.
The judge criticized the city and its attorneys for “inflammatory descriptions,” “spurious” claims and “hyperbole” that “tend only to obscure the factual allegations.” Those attorneys had alleged numerous violations, harm to the environment and traffic impacts, but Sanders said that she was unable to see, “how these alleged irregularities impacted Boston much less caused it to suffer any injury sufficient to give it standing.”
Walsh has argued that the Everett casino will directly impact the neighborhood of Charlestown by adding to traffic congestion. His attorneys had alleged that commission Chairman Stephen P. Crosby had violated conflict of interest laws and engaged in improper communications with Wynn. Due to so many criticisms Crosby recused himself from participating in any hearings or votes on the license.
The Wynn organization praised the decision: “We are very pleased with Judge Sanders’s ruling, the result of which continues the positive momentum of our development,” it said in a statement.
Walsh’s lawsuit was actually filed against the commission, rather than Wynn. The commission’s spokesman, Elaine Driscoll, described the decision as, “a validation of the hard work and detailed effort put forth by the commission and its staff.” She added, “We are hopeful that Wynn and the cities of Boston and Revere can now begin to reconcile their differences through open dialogue and negotiation as opposed to legal action.”
The ruling also pleased Everett Mayor Carlo DeMaria. “This project has always been about jobs—jobs for Everett residents and jobs for residents of the entire greater Boston region,” he said. “I look forward to the roughly 4,000 construction jobs that will now be created to build this project, starting this spring, and to the 4,000 permanent jobs that will be created when Wynn Everett opens.”
The judge also dismissed the lawsuit by Revere, where Suffolk Downs is located, saying the city has no standing. She wrote, “When Wynn was awarded the casino license the only harm Revere suffered was the loss of potential economic benefits it may have received had Mohegan Sun been the winning applicant.”
Sanders gave indications early on that she was dubious about the city’s contentions, and so Wynn and Walsh have been meeting to try to come to a resolution of differences, especially the city’s concerns over traffic impacts to Sullivan Square in Charlestown.
The agreement Walsh signed for the Revere casino would have paid the city $30 million one-time plus $18 million annually. Wynn offered $6 million one time and $2.6 million annually.
Walsh told reporters after Judge Sanders’s ruling that the lawsuit was worth it. “Yeah, it is. Yeah, it’s worth it.”
The mayor added, “Because I’m fighting on behalf of the people of Boston. I mean, I’m not going to roll over and not fight for the people of Boston. I’m not going to roll over and have the people of Charlestown who are affected by this, by the traffic and everything else that happens in the community, just say, ‘well OK, so be it, you guys will have to live with that.’ That’s not my job.”
Walsh conceded that his people are now at negotiating with Wynn. “His people are at the table,” he said, adding that the hyperbolic rhetoric the judge criticized the city for has been tamped down during those talks. He used phrases like “good conversations” and “good dialogue,” to characterize the negotiations.
He added, “It’s not necessarily what I want from Wynn, it’s to make sure the residents of Charlestown, residents of the city are best represented, that’s my job as mayor, and I’m going to continue to do that.”
Michael Weaver, a spokesman for Wynn, called the get-together “a helpful meeting, a productive meeting.”
No agreement has yet resulted as a result of those meetings, although Weaver sounded optimistic when he spoke to the Boston Globe. I know that we’re working on some common agreements and common goals. We’ve had some very productive meetings as of late and we’ll see what happens.”
The city has another lawsuit pending against the casino, its challenge of the validity of the environmental certification the state issued several months ago. The city claims that Environmental Secretary Matthew Beaton did not take into account traffic concerns in Charlestown.
MGM Springfield
The Springfield City Council December 21 will review a casino overlay district in its South End that would create zoning guidelines for the 14.5 acre footprint of the MGM Springfield project.
Approval of the district would allow the developer to begin preliminary work such as demolition, but does not constitute approval of downsizing of the project that was announced by MGM several weeks ago. Those plans will be reviewed in January.
One of the biggest changes was to eliminate the 25-story hotel and replace it with a six-story hotel with the same number of rooms but in a different part of the site. That change, as well as downsizing the entire project by 10 percent has created a major public relations problem for the developer.
Plainridge Park Casino
Although Plainridge Park Casino in Plainville is not meeting revenue expectations, Penn National Gaming CEO Tim Wilmott will only own up to one mistake regarding the facility: putting in a coffee shop instead of a Dunkin Donuts. He told the Boston Globe, “That was a mistake. We should have known being in the Boston market that we needed Dunkin’ Donuts.”
Wilmott concedes that “numbers are slightly below what we expected,” but adds, “it’s still a very good return on our investment here.”
Penn National had projected that the 1,250 slot racino would bring in $200 million in gross proceeds annually, or about $438 per machine per day. Currently that average is between $330 and $350.
Penn hopes to rectify this by introducing more video poker machines and increase high denomination slots. It will also cut in half the number of relatively unpopular electronic table games. It is also rethinking its digital blackjack machines that it introduced to compete with the actual table games at Twin River Casino in Rhode Island, a short drive away.
Plainridge also plans to begin providing bus service for seniors who want to play but don’t want to drive.
Wilmott says that the numbers will get worse before they get better since the last and first month of the year is always slow. “You can’t compete with Santa Claus,” he told the Globe.
Plainridge’s less than stellar performance so far is giving solace to the Bay State’s casino critics who would like to stick a wrench in the gears of the MGM Springfield and Wynn Everett.
Executive Director
The Massachusetts Gaming Commission has named finalists for the permanent position of executive director, including a former high-ranking member of the Bay State’s Attorney General’s Office and a top gaming regulator in neighboring Maryland.
One of the finalists is Edward Bedrosian Jr., formerly the state’s First Assistant Attorney General, and Charles LaBoy, who is currently assistant director of gaming at the Maryland Lottery and Gaming Control Agency.
Bedrosian currently is an attorney with the law firm of Orrick, Herrington and Sutcliffe, LLP. He has also worked with the commission previously in the writing and implementation of gaming regulations.
LaBoy oversaw the regulation of the MGM National Harbor resort casino in Maryland and during his time with the state’s gaming regulatory agency oversaw the regulation of five casinos. Before that he was employed by the Kentucky Racing & Gaming Commission.
Both were scheduled to be interviewed by the commission on December 9.
One of them will replace Interim Director Karen Wells, who has run the agency since July when the first executive director, Rick Day, resigned.
Commissioner Bruce Stebbins has led the search for a new executive director, vetting over 70 candidates.
