The Massachusetts Gaming Commission June 13 will take up the issue of a casino license for the Western gaming zone, whose only remaining contender is MGM Springfield.
The commission last week released a schedule for its upcoming votes on casino licenses. The schedule calls for the June 13 vote for the Western zone, with the Boston metro vote taking place between August 29 and September 12. The southeastern zone, bringing up the rear, will be voted on in early 2015.
Commissioners held the final public hearing on the $800 million proposal two weeks ago, including pro and con testimony from Springfield residents. The commission focused on surrounding community agreements and allowed some testimony by people from outside Springfield.
This led one Springfield supporter of the casino, Vera Conner, to tell the Republican, “I would say the people who are most opposed to a casino in Springfield do not live in Springfield. They work in Springfield, get their paycheck and then scurry off to the suburbs. They do not want a casino, but yet they want the benefits. They have their hands out.”
NoCasino West Springfield member Nathan Bech retorted, “I appreciate the sentiment that people want to see economic improvement, but where casinos go they suck the life out of small businesses. People drive to casino, spend all their money there and do not spend money in local businesses.”
MGM plans to hedge its bets somewhat. Although the commission has decided not to postpone the decision until after the Massachusetts Supreme Judicial Court rules on the legality of a referendum that would repeal casino gaming, MGM won’t begin construction until after that decision is released, probably in July. It has also requested until July to pay the licensing fees.
MGM Springfield President Mike Mathis commented to 22News, “At that point with the repeal behind us and the license in hand, we’d be ready to start construction. We’d be ready to go to work, and at the point, we believe that’s the appropriate time to make major fee payments, which we are ready to do quickly.”
Commission Chairman Stephen Crosby did not say whether the commission will allow MGM to delay paying the fees. “We will make a decision, and we will offer it, if we decide to award it, we’ll decide to offer it to MGM, and it’ll be up to MGM to decide whether they want to accept it or not.”
While waiting for the decision, the Big E Eastern States Exposition in West Springfield says it hopes to reach a cooperative relationship with MGM, in much the same way that it works with Six Flags New England.
The casino would be located less than a mile from state fair, across the river. Several months ago the commission turned down the exposition’s request to be considered as a negatively impacted entity by the casino. Big E President and CEO Eugene Cassidy indicated that his organization wants to patch things up with MGM.
The exposition pushed its own casino proposal with Hard Rock Casino last year, but the city’s voters turned it down.
Boston Metro Zone
Because commission Chairman Stephen Crosby made one too many missteps in connection with the Boston metro casino zone, he was forced to recuse himself from deciding whether the Wynn proposal for Everett or the Mohegan Sun’s Revere project will get the license. This raises the possibility of a deadlock, however remote, if the vote is 2-2 among the remaining commissioners.
The deal with this possibility, commissioners is working on a tie-breaking procedure. “We realize there are four of us,” said Commissioner James McHugh, who was acting chairman during the part of the recent meeting where the commission voted on whether Boston would be considered a host community of the two casino proposals. “We’re aware of the concern about what happens if there is a deadlock.” He noted, however, that the commission has rarely disagreed on substantive issues.
Nevertheless, the commission did split its vote the first time it awarded a license, for the state’s one slots parlor. At that meeting the panel voted 3-2 to award the license to Penn National Gaming for its Plainville proposal.
The commission has tasked its staff with presenting various tie-breaking options at its next meeting.
Crosby voluntarily removed himself from any votes or hearings regarding probably the most important license the commission will issue. His latest faux pas was to attend the 150th anniversary reception of the running of the Kentucky Derby at Suffolk Downs racetrack, one of the two contenders for the Boston metro license.
Crosby is also named in a lawsuit by disgruntled former license bidder Caesars Entertainment, which alleges that the chairman failed to disclose a possible bias that he might have because a former business associate of his is involved in the Steve Wynn proposal.
Nevertheless, Crosby confirmed that he will continue to serve out the remainder of his seven-year term, although he apologized for his actions. “In retrospect I wish I hadn’t gone to the opening day celebration. I still think it was a really minor matter. I’m sorry that this stuff has happened that has distracted from the Commission’s work I want very much to have people feel confident in this process,” he said. “I think people will see that we will ultimately do what we said we would do, which is to have a fair, transparent and participatory process that the public will have confidence in.”
Recently the owners of Suffolk Downs wrote the gaming commission offering to stop racing at the venerable track if racing is a stumbling block to granting the Mohegan Sun a license to operate a casino.
The letter said, “If, by continuing to race, Suffolk Downs would invalidate or jeopardize Mohegan Sun’s application or gaming license, we would not do it. We would not let racing or any other activity on the remainder of Suffolk Downs’ land get in the way of a successful gaming establishment . . . in Revere.”
This comment tends to run counter to the owners’ oft made claims that they were pursuing a gaming license in order to keep racing alive at Suffolk Downs. Previously they had promised to keep racing for at least 15 years if the casino is approved. The comments followed questions from the commission about details of the lease between Suffolk Downs and the Mohegan Sun that gave the owners the option of continuing run racing.
The city of Boston had used that provision as an argument for why it should be considered a host community of the Revere casino. Suffolk Downs racetrack is located inside of the Boston, while the site for the casino is within Revere.
Because of the commission’s questions, the racetrack owners and tribe agreed to delete the provision from the lease terms. That deletion may or may not have had some bearing on the commission’s decision regarding the “host” status of Boston.
Being designated a “host community” would have given Boston’s voters a veto on either or both casino proposals, and would have allowed the city to negotiate much more lucrative deals with the casino developers.
In any event, the city says it is considering suing to try to overturn the commission’s ruling. Mayor Martin J. Walsh criticized the commission for having a predisposition to deny Boston’s request. “This is a clear example of the commission demonstrating a predisposition to deny the obvious — that Boston deserves the status of a host community and the voters have an absolute right to vote,” he said in a released statement. He added, “Were we to choose to file a lawsuit, this action clearly increases the likelihood of our success.”
According to Chip Tuttle, Suffolk Downs chief operating officer, removing that provision doesn’t mean that the racetrack is not committed to keeping the track open as long as possible.
Meanwhile, leaders of No Eastie Casino, who oppose any Boston-area casino, are calling for an investigation of charges that the commission colluded with the Mohegans and Suffolk Downs to make things easier for the Revere proposal. They claim that the inquiry by the commission was intended to warn Suffolk Downs that the provision might be a deal killer.
Commission spokesman Elaine Driscoll said last week that the commission never asked the casino proponents to remove that section from the lease.
Meanwhile, the city of Everett, which supports Wynn’s casino proposal, has reached a “surrounding city” agreement with the Mohegans, just in case. The tribe will pay the city $575,000 annually if it wins the license for its $1 billion casino resort. The agreement also commits the casino to providing “cross marketing opportunities” to cultural and tourist attractions in the city.
The parties were under pressure to reach an agreement by the middle of June, to avoid having an arbitrator appointed who would pick between one of the two proposed agreements and force it on the other party.
Other cities have reached surrounding community agreements that have given them payments ranging from $50,000 a year for the towns of Salem and Melrose to $2.5 million for the town of Chelsea.
Despite this lucrative deal, many in Everett are pinning their hopes on the Wynn casino. They see the possibility of converting old factory property into desirable properties, starting with the former Monsanto chemical plant land that Wynn has his eyes on. The property is part of an 11-block neighborhood referred to locally as the “Lynde” a name that is pronounced “line.” It mixes poor, middle class and upper class houses with small manufacturers and international corporations. It also includes Exxon Mobil’s tank farm and the servicing for Massachusetts Bay Transportation Authority subway system.
Manufacturing has fallen by the wayside in recent decades, something city officials always assumed would return. Since it has not, other solutions to reviving the community have become attractive, such as the Wynn proposal.
Southeastern Casino Zone
Crossroads Massachusetts LLC and Foxwoods Casino Resort, relative newcomers to this zone, although veteran contenders for a Bay State license, are looking for 120 acres of waterfront property in Fall River that will allow them to triple the size of the casino resort they want to build.
Fall River Mayor Will Flanigan last week announced the ambitious project last week, “Our goal is we want to develop a project we can be proud of and I’m confident we can build the biggest casino in New England and one of the top three in the world. We want a legacy project for Foxwoods and the city.” Foxwoods CEO Scott Butera has yet to confirm the changes in the project announced by the mayor.
The current proposal is for 30 acres in the city’s South End, in the New Harbour Mall. The $750 project would include a 140,000 square foot casino, 10 restaurants, a hotel, retail shopping, and a convention center and concert arena.
The Massachusetts Gaming Commission recently extended the deadline for submitting a proposal from July 23 to September 23 at the request of KG Urban Enterprises and the city of New Bedford. Flanagan said this gives his group more time to craft a better proposal.
The mayor is not worried about some reports that Philadelphia Entertainment and Development Partners, whose 13 investors includes Foxwoods, has filed for bankruptcy. That group of investors is different from those who plan to invest in Fall River, said Flanagan.
Foxwoods also recently cut the hours of operation at one of its two casinos in Connecticut. However, none of these difficulties prevent it from attempting to purchase 120 acres along the waterfront.
KG Urban, which has long wanted to build a casino along the New Bedford waterfront, recently dropped its lawsuit challenging the constitutionality of the state’s gaming law that gave special preference in the Southeastern zone to a federally recognized tribe, i.e. the Mashpee Wampanoags. KG lost in federal court, but had appealed the decision.
KG first challenged the law shortly after it was signed by Governor Deval Patrick in 2011. The lawsuit became moot when the gaming commission voted last year to begin accepting commercial license applications in the zone after the tribe was dogged by delays in the adoption of its gaming compact with the state and with its application to put land in Taunton into trust.
Repeal the casino
Meanwhile the elephant in the room of Bay State gaming is whether the Supreme Judicial Court will allow the state’s voters to decide on whether the gaming expansion law will be repealed.
A recent poll of 500 residents by WBUR found that 52 percent of voters approve being allowed to vote on the measure, compared to 39 percent who don’t. John Ribiero, chairman of Repeal the Casino Deal, commented last week that the poll shows that people are increasingly uneasy about casino gaming.
“One of the basic truths, through all this, is that the more people learn about casinos, the less they like them,” he told WBUR. The poll indicates that gaming is not a partisan issue. Democrats, for example, are split evenly on whether they want to vote on the issue. This is making it difficult for statewide political candidates to know what positions to take. Four Democratic candidates for governor, Attorney General Martha Coakley, Treasurer Steven Grossman, Juliette Kayyem and Joseph Avellone, support casinos. Donald Berwick is opposed.
The same poll found that the gaming commission doesn’t generate much confidence in the public. Fifty-two percent said they had “not too much” confidence or “none at all” in the commission, with 39 percent saying they have “a great deal” or “a fair amount.” This appears have little to do with the problems Stephen Crosby is facing, since 70 percent of those surveyed had never heard of the chairman.
