Boston, Massachusetts Mayor Martin J. Walsh has doubled down on his contention that the city has a right to designate itself as a host community regarding casinos proposed for the towns of Revere and Everett by demanding that the chairman of the Massachusetts Gaming Commission, Stephen Crosby, step down from voting on the issue of which community will get a casino in the Boston metro gaming zone.
No one can recall that Crosby and Walsh ever crossed swords before, although both served in local government. According to Council Sal LaMattina, quoted by the Boston Herald, “I’m not aware of any bad blood between Walsh and Crosby, but having worked with the city law department, they always felt the Gaming Commission has not been fair to the city of Boston. I’ve told the commissioner himself that I’m frustrated with how the commission has treated Boston, and not allowing us to be a host community.”
Other city councilors say that Walsh is simply standing up for his city and trying to get the best deal possible.
Although the casinos proposed for a former Monsanto chemical plant in Everett proposed by Steve Wynn and for the Suffolk Downs Racetrack in Revere proposed by the Mohegan Sun are not within the boundaries of Boston, Walsh and his supporters insist that they should be treated as though they are. He has rejected the commission’s offers to hold a hearing on the issue, claiming that the city has a right to go around the commission and declare itself to be a host community.
“Host community,” designation would give Boston the keys to the kingdom, giving it the right to have a veto over either casino and at the very least to be able to negotiate extremely lucrative deals with the developers, similar, if not better than what Revere and Everett have obtained.
An attorney for the city sent a letter to the commission last week demanding that Crosby recuse himself from voting on the issue, citing “prejudicial” statements. It also claims that Crosby cannot make a fair decision because former casino suitor Caesars Entertainment is suing Crosby, alleging that he has shown favoritism to the Wynn proposal for Everett.
The letter claims that the very act of holding a hearing on the city’s claim is prejudicial, including the commission’s request that Boston submit arguments for why its claim should be considered. “Taken together, the pending federal lawsuit, recent commission statements, current press articles and the commission’s own actions, create a cloud over the proceedings when Chairman Crosby participates. Therefore, the city believes, in the best interest of a transparent process, that Chairman Crosby should recuse himself from all licensing matters in the Greater Boston region,” says the letter.
The commission has scheduled the hearing for May 1 and doesn’t appear to be backing down from its plans, despite Walsh’s statements. It issued the following statement last week: “The commission has frequently been presented with complex matters of law requiring fair and judicious decision-making by the five appointed commissioners. This matter is no different.”
Walsh has indicated that he may boycott the meeting because of the alleged “bias.” His spokesman Kate Norton declared last week, “We will not participate in a process if it has a predetermined result, and no rights for our citizens. We did not ask the commission if we were a host community; we informed them that we are. We expect the applicants to look at the facts and negotiate with us as such.”
Crosby fired back, “The commission has long ago said that it’s clear that we define what the gaming establishment is.”
Last week, referring to the earlier vote when the Suffolk Downs proposal was split between Boston and Revere, Walsh said, “First, the casino was 100 percent in East Boston, and the commission named Revere a host community. We can make the case that we’re a host community.”
If Boston were to gain that designation, it could probably end both the Revere and Everett proposals, since Boston residents voted against the Revere proposal last November when it was split between Revere and East Boston. After that vote, Suffolk Downs regrouped and brought in the Mohegan tribe with a new, Revere-only proposal which that city’s voters overwhelmingly approved.
Walsh would like the residents of Charlestown, who are just across the Mystic River from Everett, to vote on that proposal.
Opponents, such as No Eastie Casino, say it is impossible to separate the racetrack from the casino.
Meanwhile, Governor Deval Patrick, who appointed Crosby and the rest of the commission, is calling for everyone to cool it.
“I think emotions are running high, probably higher than is warranted. The chairman is a good man. The mayor is a good man. And we want a good solution,” he said last week during a press conference. “I wish there was, frankly, kind of a cooling-off period, and there are days when I wish that they would start over.”
Repeal the Casino
In a separate but related development, the state’s Supreme Judicial Court will rule soon on whether the state’s gaming expansion bill of 2011 may be challenged at the ballot box. It will hear verbal arguments on May 5.
Some, like former Boston Mayor Thomas M. Menino, believe that if the court allows the initiative to go forward that casinos be defeated, despite polls showing that a majority of those polled still strongly support gaming in the state.
The statement is significant since Menino was one of the strongest voices in support of casinos in the Bay State.
The repeal debate has expanded to the upcoming election for statewide offices. Attorney General candidate Maura Healey, an underdog Democrat, has come out strong in favor of repeal, and has enjoyed the attention it has gotten her from the gaming industry, such as the statement by American Gaming Association President Geoff Freeman, that her comments, “demonstrate an alarming lack of awareness about an industry that will create thousands of jobs paying well above the minimum wage, help small businesses grow and contribute millions of dollars to support education, public safety and infrastructure improvements.” In any event, she favors letting the people decide.
Her primary opponent, Warren Tolman said he likes the fact that the existing law gives voters of each community where a casino might be sited the final say. He opposes repeal.
The Republican nominee, John Miller, called Coakley’s efforts to keep the repeal off the November ballot, “wrong-headed.” He called the initiative process, “one of the few ways for hard-working citizens to directly express their views on policies passed by the legislature and signed into law by the governor.”
The gaming industry appears to think that repeal is a distinct possibility, which is why it is throwing all of its support behind Attorney General Martha Coakley’s efforts to keep the initiative from the ballot. She argues that the measure would constitute an unconstitutional taking of property.
The casino opponents cite an 1879 U.S. Supreme Court decision, Stone v. Mississippi, in which the court ruled that although the state granted a 25-year charter to a lottery company, that it was permissible for the voters to later adopt a state constitution that forbade lotteries. They also site the more recent case of the existing dog racing parks that the people of Massachusetts voted to ban in 2008.
Worried that the ballot measure might pass court muster, MGM Resorts has asked the commission to delay its decision on issuing a license to build an $800 million casino resort in Springfield until after the court renders its decision. Currently the commission is scheduled to award the license in June. If MGM’s request were followed, it wouldn’t be on the hook for $200 million in obligations that might do it no good if casinos are then outlawed. At its last meeting commissioners postponed acting on MGM’s request until the next meeting.
Springfield’s Chief Development Officer Kevin Kennedy commented last week that this request is not a setback, but merely reflects the uncertainty caused by the repeal possibility.
The city and the casino developer are in talks about how a casino repeal might affect the host city agreement between the two parties, including, apparently, whether MGM would still have obligations towards the city if it doesn’t get a license. For example, the agreement calls for MGM to rent 44,000 square feet of space at Union Station and spend another $6.75 million in a build-out that would fit in with the station. That project may possibly continue whether or not a casino is built.
In a related development, the commission met with a research team of the University of Massachusetts at Amherst to get an update on the study the university is doing on the social and economic effects of casino gaming on the state.
The $3.5 million study is considered the first of its kind in the nation in that it will track the effects of gambling on the state from before the casinos are built, and follow them for several years thereafter. About 10,000 adults, chosen at random, will be surveyed, in what might be called a “snapshot,” of the state prior to the advent of casinos.
According to Boston College Professor Richard McGowan, quoted by the Boston Herald, “One of the problems is people are going to want to know what’s the actual social cost of gambling, and it’s virtually impossible to do. How do you figure the cost of divorce (as a result of problem gambling)? I don’t know.”
Southeastern Casino Zone
The gaming commission last week voted 3-2 to change the methodology by which the $500 million minimum investment is calculated for casino developers in the Southeastern zone.
A potential developer, Massachusetts Gaming & Entertainment, a subsidiary of Rush Street Gaming, requested that some investments, including off-site infrastructure, be used in calculating the minimum. Rush Street is contemplating a proposal for the community of Bridgewater. One of the commissioners, Enrique Zuniga, presented a report that showed that a casino in the Southeastern zone will have a harder time making back its investment than casinos in the other two zones. It would be harder for developers to meet the minimum capital investment, he said.
The commission will also revisit whether the deadline for submitting applications for casino projects should be moved back from July 31 to September 23 as it voted on April 3. One applicant, New Bedford, favors the later deadline and Fall River opposes it. The commission could possibly extend the deadline even further.
The reason the Southeastern situation is in such flux is the uncertainty created by whether the Mashpee Wampanoag tribe will be able to put land it owns in Taunton into trust for a casino resort. If it is successful with its application before the Bureau of Indian Affairs, its claim to the zone’s license will be strengthened.
Indian Gaming
The Wampanoag Tribe of Gay Head (Aquinnah) has been encouraged in its battle to open a small Class III casino on Martha Vineyard but a federal court ruling this month that the Indian Gaming Regulatory Act protects the right of tribes to operate gaming, even if state law forbids it.
The case arose from an attempt by the state of Alabama to restrict three casinos that the Poarch Band of Creek Indians operates on the reservation.
The Wampanoag tribe wants to operate a casino in an unfinished community center despite the fact that it received land from the federal government in 1987 by act of Congress with the understanding that the land would be subject to local land use regulations. Massachusetts Governor Deval Patrick has sued the tribe in state court to prevent it from opening a casino.
The judge, U.S. District Judge Dennis Saylor, wrote, “The bottom line is that even if defendants are operating illegal Class III gaming at the Poarch Band casinos, state law does not provide the state authority to prohibit such gaming.”
The Aquinnah tribe has provided a supplemental brief to the state court citing the April 11 federal court decision. The tribe previously announced that it planned to open a Class III casino, citing an opinion from the National Indian Gaming Commission that it has the legal right to do so.
The Aquinnah are attempting to get the case moved to a federal court.
