The Massachusetts Gaming Commission last week held its final hearing in the awarding of a casino license for the Western casino zone. The commission is scheduled to vote on the license in June. In a related development George Carney, owner of Raynham Park, which didn’t get awarded the license, sued to stop Penn National Gaming from opening its slots parlor in Plainville.
The only remaining applicant for the Western license is Springfield, and MGM Resorts International, which wants to build an $800 million casino resort in the downtown’s South End. The city’s voters endorsed the property in July. MGM beat out competitors Penn National Gaming, Ameristar, the Mohegan Sun and Hard Rock International.
The proposal, which would be the biggest economic development in the city’s history in the last 30 years, is very popular with Springfield’s business community, although some local merchants worry that their operations will be cannibalized. According to Jeffrey Ciuffreda, president of the Affiliated Chambers of Commerce of Greater Springfield, quoted by the Boston Herald, the casino resort will result in $50 millions being purchased from local merchants and services. While being built it will employ 2,000 workers. Once it is built it will have 2,000 employees.
Nevertheless, opponents are plentiful. One of them, Al Cabot, who successfully fought the casino proposed for the neighboring community of West Springfield, told the Boston Herald last week, “I don’t know of an example in the country where an urban environment has been revitalized by the introduction of a casino. There are four casinos in Detroit. But Detroit doesn’t seem to be prospering.”
MGM is required by its host community agreement to pay the city $15 million up front and $25 million annually once the casino is operating.
Slots Parlor
Raynham Park owner George Carney filed his lawsuit against the commission, Penn National Gaming and Ourway Realty, in the Supreme Judicial Court.
He asks that the court revoke the license to Penn National because Ourway Realty, which formerly owned Plainridge Racecourse, will benefit from the slots parlor. The commission disqualified Ourway from operating a casino in the state because of some questionable practices by the owners. This included allegations that the Plainridge president Gary Piontkowski took more than $1 million from the racetrack’s cash room over several years without proper tracking. Penn National rescued the casino proposal by buying the harness racing track from Ourway and then applying for a license on its own. It promised to pay Ourway a share of the profits “in perpetuity.”
The commission voted 3-2 to award the license to Penn.
According to the lawsuit: “Springfield Gaming’s failure to disclose Ourway’s interests, the nature of such interests and the names and addresses of all members of Ourway on its application rendered its application false and misleading…”
Although the commission did not issue a statement about the license, Penn national spokesman Eric Schippers did, “The Gaming Commission did a thorough and transparent job evaluating the applications and acted appropriately. Given that the Carney proposal did not garner even a single vote, I’m not sure what they’re ultimately trying to accomplish.”
Penn plans to open a $225 million, 1,250-slot casino a year from now. The facility will include dining and entertainment and the racetrack will continue to operate.
Boston Metro zone
After the Massachusetts Gaming Commission ruled 4-0 last week that Boston will not be a “host community” for casino proposals in Everett and Revere, Boston Mayor Martin Walsh is reviewing possible legal action to press the city’s claim that it has the right to declare itself a “host community.”
In arriving at its decision the commission declared, “The legislature defined surrounding community by impacts and access to the gaming establishment. The Commission is bound by these definitions.”
Walsh’s attorneys contended that both casinos would have the advantage of the city’s infrastructure, airport, roads, reputation and amenities.
The mayor issued a statement that said, “Based on the ambiguous and arbitrary process the Gaming Commission has pursued, we believe that we have multiple options available to us at this time. We are continuing to work aggressively to determine the appropriate action to continue our fight for the people of Boston. My position has not changed: Boston is a host community to both sites, and the people of Boston — of Charlestown and East Boston — deserve the opportunity to vote and have their voices heard.”
Besides challenging the decision in court, the city could appeal it, but to whom is the question. State law gives the commission final say in such matters.
The Mohegan Sun’s Tribal Gaming Authority CEO Mitchell Etess, sounded a conciliatory note in a statement released shortly after the commission’s ruling: “We remain committed to continuing the productive discussions we’ve had with the City of Boston, and to reaching a comprehensive surrounding community agreement, as we have with eight other neighboring communities.” He added, “We also look forward to continuing to work cooperatively with the Gaming Commission and demonstrating that Mohegan Sun is the best choice for Massachusetts.”
Mayor Walsh is coming under some criticism for employing two attorneys in its negotiations with the Mohegans who at one time represented a nearby hotel developer, First Bristol Corp. before the Boston Redevelopment Authority. He responded, “I think that if you’re working on something and it ends — meaning that the (hotel) proposal was approved, then there was no more legal work to be had on it — then I don’t see something wrong with it. But if there was more legal work, that’s where I would have to question. From what I know today, there’s no conflict here, and there shouldn’t be an appearance of a conflict. If I find out there’s a conflict there, I absolutely would take action.”
A casino critic, Celeste Myers of No Eastie Casino, told the Boston Herald, “We know that the influences of the industry are far-reaching. It just talks to how challenging it is to be able to find folks to engage in the process that haven’t had previous experience or influence. I’m no longer surprised. We’ve had so many of these.”
The morning that the commission took its vote, its chairman, Stephen Crosby, announced that he would be recusing himself from any future deliberations involving the Boston Metro license. The gaffe-prone Crosby, whose possible bias regarding that license is already the subject of a lawsuit, compounded the issue when he attended a celebration of the 150th anniversary of the Kentucky Derby at Suffolk Downs racetrack. Suffolk Downs is where the Mohegan tribe hopes to build its casino resort.
Several candidates for governor in the November election have called for Crosby to resign from the post. They include Steve Grossman, Martha Coakley, Juliette Kayyem, Charlie Baker, and Evan Falchuk.
Meanwhile, the “surrounding community” negotiations between Wynn and the town of Somerville have gotten bitter, with each party objecting to the arbiter proposed by the other side. The negotiations for a mitigation agreement reached an impasse, causing the arbitration clause to kick in, with a panel, to decide which agreement to accept.
Somerville Mayor Joe Curtatone supports the appointment of Doug Foy, a former secretary of state development. Wynn objects, because Foy’s consulting firm has done some work for the city. Wynn’s candidate, retired judge Stephen Neel, was objectionable to the mayor. So Wynn substituted Wellesley attorney Paul George. A third member must be chosen. If Wynn and Curtatone can’t agree on someone, the commission will appoint its own choice.
The mayor objects to the Wynn project, which would be across the Mystic River from his town, and would bring thousands of cars a day through the city’s streets. He has promised to campaign to repeal the casino law, if a referendum makes it to the ballot.
The commission remains concerned about the possible involvement of a convicted felon in the purchase of the Everett site, formerly a Monsanto chemical factory, where Wynn hopes to build. At one time Charles Lightbody, who served time for assault with a deadly weapon, owned 12.5 percent of the site.
This issue was brought up by the attorney for Boston, Thomas Frongillo, during the commission’s deliberations on the issue of whether to make Boston a host community. He told the commission, “A group of people attempted to hide a disqualifying factor from you so that they could make a handsome profit. They shouldn’t be entitled to earn a penny of profit on this, not one red cent, for what they’ve done.”
One of the commissioners, Gayle Cameron, said he agreed that the issue was one of concern, but disagreed that it had any connection to Boston’s claim to be a “host community.”
Some observers speculate that Walsh by attacking the Wynn proposal is signaling that he prefers the Mohegan proposal because the tribe has agreed to talk to him, while Wynn has so far declined to negotiate with the city until its status is finally determined.
A spokesman for Wynn said, “The Commission has provided clear direction to us for an acceptable resolution to the Everett land transaction. It is our intent to follow that direction; we believe we will be successful in fully meeting the Commission’s requirements before they make a licensing decision.”
Last winter the commission voted to order that the sale price of the land be reduced from $75 million to $35 million to reduce the likelihood that Lightbody might benefit from the land’s inflated valuation. Its other requirement, that all three owners sign affidavits pledging that no “secret” partner will benefit from the sale is bogged down. One of the three refuses to sign.
“Repeal the Casino Deal”
The state’s Supreme Judicial Court is continuing to mull whether to allow a referendum that would repeal the state’s 2011 casino law on the November ballot. Last week the Boston Globe reported that one of the justices, Robert Cordy, was an attorney and lobbyist for Suffolk Downs, as well as an adviser to former Governor William Weld, who is now Steve Wynn’s attorney and lobbyist. Some opponents of the gaming law, including Repeal the Casino Deal, have called on the justice to recuse himself. However, in a statement the justice’s spokesman pointed out that Cordy, then an attorney with McDermott Will & Emery, represented Suffolk Downs nearly 20 years ago, when it had a different owner. He also represented Hilton Gaming, which is not a potential developer in the Bay State.
Cordy seemed to leave little doubt as to which way he will personally vote on the case when, during questioning of casino opponent attorneys he commented, “A five-year exclusive license that’s already been awarded at great cost by the applicants, can simply be taken away with a big never mind? You can do that? Without compensation? Wow.”
The court is expected to rule on the referendum in July.
In addition to passing muster by the court, the gaming opponents will also have to present 11,485 valid signatures by June 18 to qualify the measure.
