Five potential casino developers are now in the running for the Southeast Massachusetts license.
The final bidder to join the competition was Mass Gaming & Entertainment, whose application just missed the January 30 deadline set by the Massachusetts Gaming Commission.
The final entry is affiliated with Illinois-based Rush Street Gaming, which operates the SugarHouse Casino in Philadelphia and the Pittsburgh Rivers Casino. Although Mass Gaming & Entertainment has not released any details of its proposals, George Carney, owner of the Brockton Fairgrounds has stated that he has been talking with the company.
Previously KG Urban Enterprises, which wants to develop a casino resort along the waterfront of the historic whaling town New Bedford.
Other applications that met the deadline were Somerset On The Move, Crossroads Massachusetts and the Seafan Trust Corp., which has said it proposes a $4 billion casino that would be called Sun Moon Resort, at a yet to be disclosed location.
David Hanlon, formerly president of Harrah’s Atlantic City and the Rio in Las Vegas, leads Somerset on the Move LLC. His group proposes a casino on 100 acres owned by the city of Somerset near Interstate 195.
David Nunes, whose Crossroads Massachusetts LLC failed to win support of the community in Milford in 2013, has partnered with Foxwoods
All were scheduled to appear at the February 5 meeting of the commission.
The five applicants must pay a non-refundable $400,000 fee that will help pay for the extensive vetting that the commission’s investigative arm will conduct. Once the applicants pass the investigation, they will move to Phase 2, when their projects themselves will undergo a similar financial and aesthetic colonoscopy.
Picking a licensee for the southeast casino zone has been put off until last for a reason: it is seen as the least attractive of the zones, and less likely to be profitable than, for example, the Boston metro zone.
One reason is that it is nearest to the Rhode Island state line, and the Twin River Casino in Lincoln. Another is that any commercial proposal could be passed over by the commission in favor of the Mashpee Wampanoag tribe, who were originally promised the license if they could meet several requirements, including putting land into trust. So far the state has approved of the project’s Final Environmental Impact Report. Federal approval is still pending.
Tribal Chairman Cedric Cromwell hailed the news: “The commonwealth’s approval is one more step forward for our proposed destination resort casino in Taunton. This report not only represents the final step in the state’s environmental review process, it also affirms the significant economic benefits the project will bring to the region. The approval allows us to accelerate the final design phase of the overall project.”
The tribe is still waiting for the Bureau of Indian Affairs to rule on its application to put 500 acres into trust in Taunton. It submitted its application in 2007. BIA head Kevin Washburn promised two years ago to make a decision on the request and in a letter said it would be “finalized” by the early part of 2013.
A possibly insurmountable obstacle to the decision is the U.S. Supreme Court’s Carcieri v. Salazar decision that says that tribes recognized after 1934 may not put land into trust. The tribe was recognized in 2007, but argues that it maintained relations with the federal government from Revolutionary War times and with the British crown before that.
Even if the tribe is not awarded the license, it could build a Class II casino if the BIA puts the land into trust.
The tribe calls its proposed $500 million casino Project First Light. Plans include a casino, hotels, retail shops, and an events center.
MGM Springfield
MGM Springfield plans to break ground this spring for its $800 million casino in the downtown area known as South End. Before that begins, however, MGM will be hard at work preparing the 14.5 acres for construction.
One construction begins about 2,000 temporary workers will be employed. Construction is expected to take about 34 months to complete. MGM is touting the fact that it is trying to hire as many local contractors as possible.
Last week MGM announced that it would be hiring former mayoral candidate Chelan Brown to manage the MGM Springfield Community Office. She joins Michael Mathis, another local resident, who is MGM Springfield president, and Seth Stratton, vice president and general counsel.
Another local resident, Marikate Murren, has been in charge of the casino’s workforce development plan.
MGM has so far spent $42 million on purchasing all of the land required, in land with 500 parking spaces. Not all of the buildings will be demolished. Some are considered historic and will be preserved in total or in part. According to MGM Executive Vice President Hunter Clayton, quoted by WAMC Public Radio, “There are a significant number of buildings being retained. In our opinion it is a good historic preservation story.”
MGM is assisting tenants who are being displaced by helping them to find new office space to rent and paying them compensation. Those who chose to remain downtown are eligible for bonuses.
Construction will have an impact on parking downtown for close to three years, something the city promises to do something to address. Springfield Parking Authority Executive Director Mary McNally commented, ” It’s very challenging. It will be an opportunity to work out the solutions, and at the risk of sounding boastful, I am very good at that.”
MGM is also building parking that will be open for anyone, not just casino patrons, to use.
Slots Parlor
The Plainridge Park Casino is still on track to be the first of the Bay State’s casinos to come on line, with a June opening projected.
The racino, being built by Penn National Gaming, will continue to offer harness racing, but with the addition of slot machines. The expanded facility will include a food court, oyster bar, Doug Flutie themed sports bar, 1,250 slot machines and 250 electronic gaming tables.
Saturated Market?
Meanwhile, the advent of four casinos in the Bay State is providing impetus for expanded gaming in neighboring states, in spite of the fact that many market gurus say that New England could be nearing saturation.
The East Coast has seen more casinos open in the last ten years than other parts of the country. Existing casino resorts have had to expand, renovate and in some cases rebrand to remain competitive. Nevertheless the law of the jungle has brought down four casinos in New Jersey, which operated a sort of Las Vegas east without much competition for many years.
The competition also hurts racetracks, such as the three operating in Delaware, where politicians are mulling what to do to preserve the industry.
In New Hampshire a bill has been introduced to allow two casinos. Such bills have prospered in the Senate only to crash and burn in the House. Nevertheless Senator Lou D’Allesandro, who has introduced previous bills, is hopeful.
He told the Wall Street Journal, “if you’re gonna do it, you better do it now.” Governor Maggie Hassan supported a single casino last year, and still insists that one is enough.
Critics worry that the Granite State, where raising taxes has traditionally been viewed with considerable hostility, might become too dependent on gambling revenues.
In Connecticut where Foxwoods and the Mohegan Sun operated relatively unchallenged (except by each other) for close to two decades, they are talking about a joint venture for the northern part of the state. Delicate negotiations may be required to pull that one off according to Senator Martin Looney, president pro tempore of that chamber.
This third casino would be a form of self-defense against the $1.6 billion mega casino that Wynn Resorts plans to build on the outskirts of Boston and the $800 million casino resort that MGM has started to build in Springfield.
Rhode Island Governor Lincoln Chafee said recently that whichever developer wins the Southeastern license will impact his state’s ability to balance its budget, and whether the Newport Grand slots parlor survives.
Chafee estimates that the state will lose $100 million in casino revenue. The two slots parlors in Rhode Island are the third largest source of revenue for state government.
Keeping the Lottery Alive
In a related development, the head of the Massachusetts Lottery has vowed to prevent the state’s four casinos from taking money away from this source of funding for municipalities.
Treasurer Deborah Goldberg has asked for an additional $2 million to increase advertising and hang onto the nearly $5 billion in sales the Lottery racked up in 2014.
Goldberg told lawmakers last week, “In a competitive environment, there’s only a certain amount of money to spend on gambling and entertainment. We want to own the market, and the best way to do that is through advertising and innovation.”
Goldberg also wants to revamp outdated Lottery terminals. Bids for the upgrade went out this week. Last year the Lottery made $974 million in profits, most of which went to education and local government. Some critics of the casino expansion claim that the Lottery will take a 21.9 percent hit once all four casinos are in operation.
On the other hand, the American Gaming Association cites figures show that lottery sales have increased in states that introduced casino gaming.
