Casino Developers in Massachusetts Sue To Stop Ballot Measure

Casino developers hoping to build in Massachusetts have joined forces to sue to prevent an initiative that would repeal the gaming expansion from making it to the ballot in November. Attorney General Martha Coakley (l.) initially ruled the measure unconstitutional.

Casino owners are not known for leaving things outside of gaming to chance. So, although polls show that most Massachusetts voters support the state’s gaming expansion law, a coalition of gaming developers has joined forces to sue to keep an initiative that would repeal the 2011 law off the November ballot.

The coalition includes MGM, the Mohegan Sun, Penn National Gaming, PPE Casino Resorts and Raynham Park. Steve Wynn, who wants to build a casino resort in Everett, is not part of the suit.

Recently opponents of casinos in the Bay State obtained enough petition signatures to get the initiative put on the ballot, although the law’s legality has yet to be decided by the Supreme Judicial Court. Initially the initiative was ruled to be unconstitutional by Attorney General Martha Coakley, who allowed it to be fast-tracked to the high court, which is expected to issue a ruling in July. The court allowed the petitioners to continue to collect signatures while the ruling is pending.

However, given that the first slots parlor license could be issued late next month, the casino developers are hoping to get a ruling prior to July. If the license were awarded according to schedule the licensee would pay the state a $25 million non-refundable fee. At the same time, applicants for casino resorts owe the Bay State $85 million in non-refundable application fees prior to the decision on which ones will be awarded three licenses for the state’s three gaming zones.

This would, according to financial expert Carl Jenkins, managing director of Duff & Phelps, “be a gamble,” and one where the house would not have the advantage. Interviewed by 22WWLP, he added, “If the law was repealed, I’d wager there would be a significant number of lawsuits against the state.”

MGM Resorts, which wants to build an $800 million casino resort in Springfield, and is currently the only applicant left standing in the Western casino zone, last week noted, through its vice president of gaming development, Michael Mathis, “Our plan was endorsed by an overwhelming majority of voters. It would be devastating to roll back all that has been accomplished and take away the promise of what is to come.”

However, John Ribeiro, who leads the anti-casino initiative effort, Repeal the Casino Deal, countered, “This wasn’t passed by the will of the people. This was the will of a few people on Beacon Hill.”

The casino companies will argue, as Coakley argued, that repealing the law would be a unconstitutional taking of contract rights.

Whether the ballot measure is ever actually voted on, gaming remains popular in the state, with 61 percent supporting casinos, according to a study by the Western New England University Polling Institute.

Financial support for the initiative in part comes from high profile business leaders who feel that casinos hurt small businesses and provide a breeding ground for crime.

David D’Alessandro, former CEO of John Hancock, explained the Boston Herald why he donated $10,000 to the effort. “A number of us felt that the legislature rushed it through, that the leadership had an agenda to only allow, for example, East Boston, to vote, and it looked like a classic, wired bag job,” he said. “The thing I don’t understand—why anyone thinks it’s a bad idea to allow us to vote. We’re going to change the fabric of some of our communities and our revenue streams and how we’re viewed by other people. Why wouldn’t we be able to vote on that?”

John Rosenthal, a $1,000 donor, added, “I just think casino gambling has never, ever proven anything but being bad for small business and for the economy.”