Mass. Gaming Commission Delays Key Decisions

The Massachusetts Gaming Commission has bowed to circumstances and voted to delay two key decisions, the issuance of gaming licenses in the southeastern and Boston metro casino zones. The Boston area decision was caused by a challenge from Boston Mayor Martin Walsh to have the city declared a host community.

The Massachusetts Gaming Commission has delayed the issuing of casino licenses for the Southeastern and Boston metro zones. This means that the southeastern license probably won’t be issued until February of next year and the Boston metro license won’t be issued until this August.

Meeting two weeks ago the commission voted to delay the second-phase application deadline for the southeastern zone until September 23 or possibly later. It did this at the request of some of the potential applicants, although against the wishes of another. The commission will set the exact deadline at its next meeting, at which time it will consider the request by one possible developer that the way the $500 million minimum investment is calculated be changed.

According to Commission spokesman John Ziemba, “It would send a signal to them that we’re not forcing them to submit an application that isn’t as fully developed as they would like it to be.”

The vote was in reaction to requests by KG Urban and the city of New Bedford for a delay from the original July deadline. The delay was opposed by Fall River, which has partnered with Foxwoods to present a proposal. The Claremont Co. of Bridgewater is also a potential developer, although it has not yet made a formal application.

For the first time New Bedford admitted publically that it is soliciting casino proposals, something it has been doing for several months, according to Mayor Jon Mitchell. In a statement issued last week the mayor said, “The city made progress recently in inviting a dialogue with interested operators and developers. While the city is not prepared to detail the nature of the exchanges at this time, these discussions have been productive.”

Mitchell has always been ambivalent about KG Urban’s proposal for the waterfront of his town. New Bedford has not precluded such a project, but Mitchell’s statement made clear it is not his first choice. The casino proposal, “should be located on a site that does not negatively impact the growth of our fishing industry, cargo industry, offshore wind deployment and manufacturing, and should preferably lie outside our protected Designated Port Area while understanding that this consideration need not be an absolute condition,” he said.

Because the deadline for potential developers to be considered has passed, New Bedford is limited to developers who have previously been vetted by the commission, such as KG Urban, or an applicant that previously failed to get a license in another casino zone. That short list includes the Cordish Cos., Hard Rock, Rush Street Gaming, Raynham Park and whichever company is left out when the commission chooses between Wynn and the Mohegan tribe for the Boston metro license.

The 2011 law that authorized three casino resorts and a slots parlor in the Bay State originally set aside a license for a recognized federal tribe, but because the Mashpees encountered delays in meeting the requirements of the bill, the commission opened up the southeastern zone to commercial bids, without precluding the possibility that the tribe would ultimately be awarded the license.

Commission Chairman Stephen Crosby commented that without extending the deadline they might not have any more proposals. The commission is proceeding very deliberately because of uncertainty over whether the Mashpee Wampanoag tribe will ultimately be able to pursue a $500 million casino in Taunton, due to questions of whether it can put land into trust.

The delays will give a hit to the state’s budget, which had anticipated ending on June 30 with a $85 million licensing fee from the southeastern and Boston metro zones, in addition to the $25 million fee that it was able to collect from Penn National Gaming for its slots license in Plainville.

Boston Metro zone

The delay for the awarding of the Boston metro license was prompted by the demand from Boston Mayor Martin Walsh that the city be designated as a host community for the casino proposals in the cities of Everett and Revere. The commission voted to hold a hearing May 1 on the Boston request. That “request” isn’t exactly a request; it is more of a demand. The city’s attorney has alleged that the commission does not have the statutory authority to prevent Boston from declaring itself to be a host city, which would give it a veto over whether the Suffolk Downs proposal in Revere and Steve Wynn’s proposal in Everett go forward at all.

Dealing with that question effectively with all the facts at hand has forced the commission to postpone is original plans to award a license by June. According to Crosby, quoted by the Patriot Ledger, “We would have been making a decision next month if it wasn’t for this process. We’re bending over backwards so the city can make its case, and it’s compromising a lot of other parties.”

Speaker of the House Robert DeLeo, who helped shepherd the gaming expansion act through the House in 2011, says he disagrees with the Boston mayor’s take on the law. “What we foresaw a host city would be is the city in which the casino or facility would be located. So I’m not sure Boston would be considered as such,” he said, according to the Boston Herald.

He added that giving in to Boston would bring other communities to the commission. “So I’m not sure what effect that would have, except for, I think, that would probably open up a whole Pandora’s box of what would happen in terms of the final decision.”

Meanwhile, the president of the Massachusetts AFL-CIO is asking for more flexibility from Steve Wynn in dealing with unions. Last week Steven Tolman called on Wynn to follow the lead of his competitor for the license, the Mohegan, and sign an agreement to remain neutral in any contests to decide which unions will represent the workers in his casino, if it is approved.

Tolman, who head an umbrella group, UNITE HERE, that contains several union groups, stated, “I don’t care who gets the license, all I want them to do is stay out of it. Some of the casino companies could be supportive more of a union that might be more amenable to the company’s needs. Labor harmony was in the legislation, so all that means is that they keep out of it, they allow a democratic process to take place without them interfering.”

A spokesman for Wynn responded that his company plans to enter into what is known as a “harmony agreement,” once it receives the license.

One major factor that the commission is likely to take into account in making its decision will be the effect of traffic generated by the winning casino, and what it is likely to do Boston area.

In fact, according to commissioner Gayle Cameron, the issue is “at the forefront.”

If the casino goes in Revere, that is likely to cause much more congestion for Route IA, that serves East Boston, Revere and Winthrop. On the other hand, if the casino is built in Everett, it is very likely to cause more tie-ups in Charlestown, a community that has waited for traffic relief for many, many years. Both proposals estimate at least 20,000 new trips per day, or about what a big box store and a supermarket combined would create.

According for a former secretary of the Massachusetts Transportation Department, Fred Salvucci, quoted by the Boston Globe, “Both of them have very large and, on the face of it, unmitigatable problems.” That makes it likely that the developer with the best solution to these problems will get a leg up on the competition with the commission.

But it will also get a leg up with customers. No casino wants potential customers to stay away because they would rather not deal with traffic gridlock. It doesn’t hurt that a casino’s most fervent demographic, older people, generally don’t visit during the commuter blitz times. Their peak times are during late mornings and afternoons.

Both developers plan to commit millions to traffic mitigation such as improving intersections and roads, as well as well as encouraging mass transportation. The Mohegan Sun has pledged to spend $45 million on a traffic plan that would either construct a flyover in East Boston or increase capacity and install traffic lights that would be sequenced to move traffic faster. Transportation officials will pick the one they like the best.

Western Zone

No delay in awarding the license for the Western zone is anticipated. The only remaining applicant for that zone is MGM Resorts, which proposes to build an $800 million casino in Springfield. That license is likely to be awarded on or before June 30.

Meanwhile arbitrators have begun the work of hammering out “surrounding community” agreements between MGM and the town of Longmeadow and West Springfield, which were unable to reach agreements before having arbitration forced on them.

MGM previously reached agreements with six other surrounding communities, giving them amounts ranging from $85,000 annually to  $150,000 annually.