Wynn Resorts Ltd. was lied to by landowners who went to great lengths to conceal the part ownership of an organized crime figure in land Wynn was purchasing for a casino resort in Everett, Massachusetts. Federal and state prosecutors October 2 arrested the three men after a grand jury indicted them on September 29.
The involvement of convicted felon and alleged mafia member Charles Lightbody in the 30 acres that is the site of the former Monsanto chemical factory has been known for many months, although the owners of the property consistently denied it. The indictment charges that Dustin DeNunzio and Anthony Gattineri hid his financial interest in the title. They are charged with fraud and conspiracy to commit wire fraud, crimes that carry sentences of up to 20 years. All three pleaded not guilty to the charges.
DeNunzio, Lightbody and Gattineri and a fourth, unindicted man, Paul Lohnes, control the FBT Everett LLC trust, which purchased the 30 acres in 2009 for $8 million. The charges allege that the accused tried to hide Lightbody’s involvement in a series of moves between late 2012 and July 2013 when Wynn first became interested in buying the land. This included a document in which Lightbody fraudulently claimed that he had sold his interest in 2012.
The initial purchase price was to be $75 million until the Boston Globe uncovered Lightbody’s involvement last November. Wynn does not actually own the land yet. He has been paying the trust that owns it $100,000 a month for an option to buy for $35 million.
According to prosecutors, “The state investigation revealed that these three defendants allegedly attempted to hide Lightbody’s involvement in the company because he has a criminal record.”
State Attorney General Martha Coakley (also the Democratic nominee for governor) joined with the federal prosecutor in commenting on the indictments: “We allege that these defendants misled investigators about the ownership of land proposed for a casino,” she announced.
Lightbody’s attorney declared that the case against his client was built on “speculation, conjecture and surmise, not evidence.” He maintains that Lightbody transferred all interest in the property before Wynn finalized the purchase.
The Massachusetts Gaming Commission last month awarded Wynn Resorts the license for the Boston metro area. He plans to build a 27-story, 550-room, $1.6 billion casino resort in Everett along the Mystic River, just south of Boston.
After the indictments a spokesman for the commission issued this statement: “These federal and state indictments send a loud message that the Massachusetts Gaming Commission will take every measure necessary to preserve the integrity of the gaming industry while also remaining focused on maximizing the benefits of job creation and increased revenue to the commonwealth.”
Wynn commented that the indictments were, “an example of the rigor and diligence exercised by law enforcement and regulators in the commonwealth.”
Acting commission Chairman James McHugh said that there is “clearly” no evidence that the Wynn organization had any involvement in the alleged fraud. Suffolk Downs, which had partnered with the Mohegan Sun to propose a rival casino at Revere, has asked the commission to reconsider its decision in light of the indictments, given the “grave doubts,” that Wynn can now acquire the property in a timely manner.
However McHugh said that Wynn could address that issue in its first progress report to the commission in a few weeks. “We’ll have a better chance to see how that plays out then,” he said.
The Mohegan Sun added, “Today’s developments have darkened a cloud which has been lingering for some time over the land transactions necessary for Wynn Resorts’ project in Everett. Mohegan Sun greatly values the Massachusetts market, and continues to be interested in the establishment of the commonwealth’s gaming industry. We will be monitoring future developments relative to these criminal indictments of people associated with the Wynn Resorts project site in Everett, and any impact they may have on the licensing and regulatory process.”
Boston Mayor Martin J. Walsh, a consistent critic of both the commission and Wynn, weighed in after the announcement. “Their investigatory body clearly failed the people of Boston and of the Commonwealth by allowing—even remotely—the taint of corruption to be associated with this land transaction,” he said in a statement.
Dan Rizzo, mayor of Revere, where the Suffolk Downs casino would have gone, added, “I believe this casts a very dark cloud over a process that has long been promised to be above board and in the best interest of the Commonwealth and its residents.”
Joining in the pile-on was John Ribeiro, leader of Repeal the Casino Deal, who said, “Today, the corrupt casino culture burst into clear focus, and the voters now have an even clearer choice in 33 days. The barons of Beacon Hill who empowered this new wave of corruption should feel all new shame.”
Repeal the Law
The first large public forum on Question 3 will be held October 23 at Suffolk University. Speakers will include Ribeiro and former state Attorney General Scott Harshbarger representing the pro-repeal side and Everett Mayor Carlo DMaria and Charlie Stefanini of the anti-repeal side.
Voters will have their say on the issue on November 4.
Repeal has unsuccessfully tried to recruit high-ranking politicians who support the law, such as House Speaker Robert DeLeo, or CEOs of the casino developers, to participate in the debates.
With less than a month to go before the election polls show voters leaning more towards retaining the casino law.
A poll released last week by the Western New England University Polling Institute showed 52 percent of likely voters saying they would vote no on Question 3 and 41 percent saying they would vote for it, with 6 percent undecided.
A Boston Globe poll shows 53 percent supporting keeping the law with 40 percent wanting to repeal it and 7 percent unsure.
Bay State voters have consistently supported gaming in the state for several years now, with low-income voters providing the strongest support.
The strongest region for yes on Question 3 voters appears to be Western Massachusetts, where 50 percent said they planned to vote to repeal the law. That is where Springfield is located, where the commission awarded the license to MGM. Strongest support for casinos is in the central and eastern part of the state.
TV ads are now proliferating, with pro-casino forces emphasizing jobs and economic development rather than gambling or even mentioning casinos. Casino supporters claim that the four casinos combined will create 10,000 permanent jobs.
Although there have been several negative news stories about the Massachusetts licensing process, so far that issue has not show up in political advertising.
According to Anthony Cignoli, a political strategist based in Springfield, quoted by the Boston Globe, “It should be easy, you would think, for the casino opponents to get out there and utilize all of that, to put it together. But you’re just not really seeing it.”
A Boston Globe poll shows that the public is divided on the selection of Wynn resorts, with 37 percent approving it and 35 percent against and 29 percent undecided.
The Repeal campaign has been hobbled from the beginning because it spent most of its money collecting signatures to put Question 3 on the ballot, and then had to spend even more defending it in the courts.
Political observers say that Repeal must concentrate on its grassroots volunteers and ground game rather than rely on fund-raising, where it is woefully outgunned and outnumbered.
But pro-casino forces have the potential for grassroots support, as well. The same group that helped Wynn to a large victory in Everett last year has reunited and taken their methodology to a state level. The group, Everett United, is making phone calls and knocking on doors all over the Bay State.
Organizer Michael McLaughlin told the Boston Herald, they have taken their “All of Massachusetts benefits from Wynn,” banner on the road. “We want to show that there are real people on the ground working for the ‘No’ committee, and it’s not just Las Vegas-driven money that is funding this campaign,” he said.
Ribeiro dismisses the group as a tool of the casino industry. “They offer up more empty promises and stale casino talking points. The casinos continue to tout grassroots support while 99 percent of their funds come from two casinos, MGM and Penn National, with Wynn Resorts reversing course and agreeing to contribute as well.”
Internal polling by the Repeal campaign is telling them that they have reason for optimism. In a memo obtained by the Boston Globe supporters were told last month, “Anti-casino advocates have a slight edge today and are locked into what is a very competitive contest with the casino industry.”
According to Ribeiro, “We have the winning message. We have seen this before in East Boston” and other communities, “where people who haven’t voted in a long time come out to vote against casinos.”
One possibly decisive arrow in the Repeal quiver is the fact that all of the state’s Catholic bishops have come out in favor of Question 3. Fifty-five percent of the state’s voters are Catholics.
According to James Driscoll, director of the Massachusetts Catholic Conference said of the bishops, “They will speak out themselves and probably through the parishes and pastors in those parishes who will speak to individuals in their communities across the state on Sundays and other days of the week.”
Casino opponents have a messaging problem, as well. If you vote “yes” on Question 3 you are voting against casinos, and for repealing them. If you vote “no” on Question 3, that means you support casinos. Educating voters about this difference could become an important factor, some experts say.
University of Massachusetts political scientist Ray La Raja told the Globe, “Most people, when they’re not sure of something, tend to say no. They tend to keep the status quo, so that’s something in favor of the casino industry.”
The anti-Question 3 campaign has never had a problem raising enough money, but it is getting more support with the announcement last week that Wynn Resorts would be contributing to the effort. Wynn announced that it would participate with Protect Mass Jobs to provide information to voters about the impact of our industry.
“Ultimately and appropriately, the voters of the commonwealth will decide,” said the statement. “They deserve to have factual information which will allow them to make an informed decision.”
Meanwhile, despite the election hanging over its head, Penn National has continued to forge ahead with building its slots parlor at Plainville. It announced this week that it has reached the halfway mark.
According to Penn spokesman Jeff Morris, “Eight months ago we started the development of this $225 million dollar facility, and in eight months we will open Plainridge Park Casino. We are extremely proud of the work product to date, the jobs and revenue we have created for union construction workers and small businesses in Massachusetts, and the career opportunities for residents.”
By November 4 Penn will have spent about $100 million on the project. The total is expected to be $227 million with a projected opening date of next spring. About 400 construction workers are laboring at the site.
When it opens it is expected to employ about 500 permanent workers.
With the recent closure of Suffolk Downs racetrack, Plainridge remains the last bastion of horseracing in the Bay State. If Question 3 passes, that too will probably end.
Some industry experts are hypothesizing that the Bay State could replace Atlantic City as the gaming hub of the East Coast. They note that by the end of this year three New Jersey casinos will close.
At $1.6 billion, Wynn’s casinos will be one of the most impressive on the continent. It will be operating in a region that is already a top tourist destination, which is something that its rivals in Connecticut and Pennsylvania cannot match. They point out that because Massachusetts has deliberately limited its casino growth, unlike Atlantic City, Boston’s economic health will not be dependent on gaming.
Southeast Gaming Zone
After months of a solid front of confidence that its application to put land into trust in Taunton was almost a certainty, some cracks have appeared in united front put forward by the Mashpee Wampanoag Tribe.
Some members of the 2,600-member tribe have gone public with objections that the tribe is spending too much money without being certain that it will ever build a casino. So far the tribe has borrowed over $90 million from the Genting Group, which it will have to pay back at a 16.5 percent interest rate.
Council members Carleton Hendricks Jr. and Laura Etta Miranda have braved threats of being censured to bring up the issue. Hendricks told the Cape Cod Times, “We’re spending money and borrowing money chasing a casino dream,” Hendricks said. “Our kids and our kids’ kids are going to be stuck paying this back.”
Miranda added, “For some people, the paycheck is more important than their tribe.”
Hendricks at first supported the casino effort in 2007, but has since then changed his mind due to a scandal involving a former chairman and delays by the federal government in putting the Taunton land into trust.
Several tribal meetings have degenerated into shouting matches and police have been called to restore order. Meetings have also been called and then cancelled.
Although he declined to be interviewed by the press on this issue, tribal Chairman Cedric Cromwell issued a statement: “These are confidential and proprietary matters that the tribe does not disclose or discuss with the general public. Nor does the tribe respond to irresponsible statements made in the media.”
For many months Cromwell has assured the public that his tribe’s casino would be the first one to start building. So much so that he has earned a mocking sobriquet from some critics, “Shovel ready Ceddie.”
Cromwell’s assurance was not shaken when in 2009 the Supreme Court ruled that a tribe recognized after 1934 could not put land into trust. The tribe was recognized in 2007. Hendricks says that the only way the tribe will be able to put land into trust is if Congress authorizes it.
Hendricks criticizes the fact that the great majority of the tribe’s annual $36 million budget is under the control of the tribe’s gaming authority, which doesn’t publish a detailed budget. The only way the tribe has of controlling such spending is electing the right people to the council, he says.
Some tribal members have been threatened with arrest for speaking out at public meetings, says Hendricks. When critics would not sit down at a recent meeting, the meeting was gaveled to a close.
Stephanie Tobey-Roderick told the Times, “They’re silencing the people — abusing their power.”
The state gaming commission has pledged to try to save horseracing from extinction. This prompted George Carney, owner of Raynham Park, to apply to bring racing back to Brockton Fairgrounds starting next year.
Carney lost out on a slots license earlier this year, and was forced to keep Raynham Park closed.
He told the Enterprise, “You pick up and move on to the next opportunity. With Suffolk Downs anticipating that they’re closing, I thought this would be a great opportunity to bring some jobs to Brockton.”
Brockton last operated as a racetrack in 2001. Carney would like to operate the track 60 days a year, including two weeks when the fair is under way. Carney is currently trying to drum up support from local officials in Brockton.
But Carney is not the only one wanting to save horseracing. A group of horsemen and trainers based at Suffolk Downs announced last week that they hope to reopen the track next year.
The New England Horsemen’s Benevolent and Protective Association presented the application to the gaming commission on the last day at which it was possible to do so. Association President Anthony Spadea said in a statement, “At this stage, the discussions are preliminary, so we need more time before a final and detailed application can be submitted.” He added, “Our organization is grateful to the Gaming Commission for allowing placeholder applications.”
The owners of Suffolk Downs had hoped that if their partners the Mohegan Sun won the Boston metro license they would be able to keep the track open. The last race was celebrated last week, although simulcast racing will be offered until December. About 9,000 attended the farewell. The track operated continuously for 80 years.
Chip Tuttle, chief operating officer of the racetrack, told the New York Times, “As a sporting product, horse racing still does very well on its biggest days, but as a day-to-day gambling product, it has not measured up with the expansion of casino gaming.” Suffolk Downs has lost money for the last ten years, he said. That means that 325 employees are now officially out of work.
Some of the most storied thoroughbreds of all time raced there, including Seabiscuit in 1937. It built up a fan base of loyal habitués. One of them, Willie Thornton, 74, told the Times, ““Suffolk Downs has been my mistress. I can’t tell you how much I’ve spent. It’s astronomical.”
Plainridge also filed its intentions to offer harness racing again in 2015. That was no surprise, however.
Commission Chairman Stephen P. Crosby issued this statement, “The Gaming Commission is fully committed to using all of its authority to help find a strategy for sustaining the racing industry.”