The Massachusetts Gaming Commission is expected to vote soon on whether to extend the May 26 for interested parties to submit phase II plans for casino resorts in the state’s southeastern gaming zone.
The commission has extended the deadline twice.
This would give KG Urban, which proposes a casino resort along the waterfront in New Bedford, Mass Gaming and Entertainment LLC, which proposes to build on the Brockton Fairgrounds and Crossroads Massachusetts, which proposes a casino resort in Somerset, more time to secure financing and hold host community elections.
Brockton and New Bedford are two cities that support gaming. Voters in both were firm last November in voting down a proposed initiative that would have overturned the state’s gaming expansion law.
Both cities have proposals for $650 million casino resorts. The city governments of both are enthusiastic supporters of those proposals. Both cities have high unemployment rates.
George Carney, owner of Raynham Park and the Brockton Fairgrounds, has partnered with Mass Gaming & Entertainment, a subsidiary of Rush Street Gaming. So far Mass Street Gaming is the only one of three bidders to file its application along with papers to show that it has obtained financing.
KG Urban’s partner is Foxwoods Resorts.
The Brockton site is ready to go, according to Carney. The New Bedford site will require clean up of its former power plant site that could cost up to $50 million.
Although New Bedford’s city council has announced itself in favor of the casino, it has yet to set a date for the host community election that is required for the proposal to go forward. State law requires that it be held between May 18 and June 17. The city signed its host agreement with KG Urban on March 19. Under that agreement the city will be paid $12.5 million a year and a single up front payment of $4.5 million.
It passed a unanimous resolution of support last week for the project on 27 acres. Besides a casino it would include a conference center, marina, harbor walk, retail shops and commercial fishing berths.
The delay appears to be mandated by KG’s attempts to secure equity funding to meet the May 4 deadline that the commission is considering extending.
Voters in Brockton will decide that casino’s fate on May 12. The $75,000 allocated to pay for the election will ultimately be paid by the developer, which is also funding YES for Brockton, the campaign organization pushing for a yes vote.
Stand Up for Brockton, is made up mainly of volunteers from local churches, and is led by Brockton Interfaith Community. The host community agreement calls for the city to be paid $10 million annually or 2.25 percent of gross revenue, whichever is greater. The developer would also pay a one time up front payment of $3 million.
MGM Springfield
Mayor Domenic Sarno, who worked hard to bring a casino to Springfield, is very likely to reap political rewards from that now that MGM Springfield has broken ground on its casino in the city’s South End.
Recently MGM investor Paul Picknelly hosted a fundraiser for the mayor, whose reelection campaign for a third term netted a cool $15,000. Six have so far filed to run against Sarno.
An attorney for MGM recently sent out a letter urging donors to support Sarno’s campaign by attending a fundraiser. “Domenic has proven himself to be an effective and capable leader and he deserves our continued support. He is always responsive to the needs of the community in general, and, in particular, understands that economic development and good business relationships are vital,” said the letter.
Various fundraisers for Sarno have brought his political war chest to just over $100,000.
On the other hand, MGM itself has been very careful not to donate to the mayor’s reelection efforts, and to discourage its employees from doing so.
Meanwhile, for some reason the Federal Bureau of Investigation has decided to put up billboards in Springfield asking the public to help it fight bribery and corruption, and listed a hotline to call.
Last year Agent Vincent Lisi, who heads the Boston FBI office publically warned that Springfield’s casino could provide a fertile growth medium for organized crime and bribery. At a press conference Lisi remarked, “When you look at legalized gaming, you have a heavy amount of regulation, along with a lucrative business. Those two factors combined make for pretty fertile grounds for corruption of public officials.”
This prompted the American Gaming Association to release a statement: “Study after study has shown that fears about increased crime after a new casino opens are unfounded, and gaming operators in Massachusetts and elsewhere are committed to upholding the integrity of our highly-regulated industry.”
Lisi claims that the four casinos planned by the state did not provoke the FBI’s “Stop Corruption Now” campaign. What did was an increase in public corruption cases, he said.
Last month newly elected state Attorney General Maura Healey asked the legislature to approve legislation to combat money laundering and human trafficking in casinos. She urged the gaming commission to require that casinos file periodic reports about large cash transactions and suspicious activity.
