The Massachusetts Gaming Commission has asked the legislature to reform some sections of the 2011 gaming expansion law to make it easier for casinos to operate in the Bay State.
In its request to lawmakers, the panel that regulates gaming in the state notes that two bidders, MGM and Steve Wynn, say that they need the changes before either could operate a casino effectively. On the other hand, they concede that the Mohegan Sun says that it can operate without any change to the current law.
The panel asks that the legislature pass and Governor Deval Patrick sign a bill that would allow the commission to refund the $85 million licensing fees if the gaming repeal referendum now before the Supreme Judicial Court is put on the November ballot and voters approve it.
The commission comes down on the side of MGM and Wynn on one provision of the law, a tax withholding law that kicks in every time a player wins more than $600, even interrupting a game in progress to collect the tax. A background check to see if the winner is current on state taxes and is not behind on childcare payments is also mandated. This provision would have the effect of making Bay State less competitive compared to casinos in Connecticut, which do not operate under that provision, says the memo. Wynn says he is so concerned about the provision that he might withdraw his application to operate if it is not removed.
MGM’s objections are not quite so stark. In a statement MGM said, “We do not expect any particular legislative item will keep us from building MGM Springfield. We are moving full steam ahead, and look forward to being designated the first resort casino license in Massachusetts.”
The commission’s consultants have said the $600 rule could deprive the state of up to $57 million in taxes annually. The commission asked the legislature to raise the amount to $1,200, similar to what other states require.
Some political observers say that the issue may fan the flames of the very public rivalry between Wynn and the Mohegan Sun for the Boston metro license. Wynn has in the past said that the Mohegans want to operate a casino in Massachusetts in order to shield its existing casino in Connecticut. He insists that his proposed casino in Everett would compete directly with the Mohegan Sun. Wynn is likely to continue to pound home the point that Mohegans’ willingness to operate a casino under rules that rivals find onerous is an indication that the tribe is more interested in protecting its Connecticut casino than in competing against it.
In March Wynn told CommonWealth, “The only interest of the Indians is to smother this threat to their main business, where they have billions invested,” he said, adding that while gaming tables in the Bay State will be taxed at 25 percent, Connecticut does not collect taxes on table games, only on slots. In case anyone might miss his point, Wynn added, “To pick Mohegan Sun, if you represent the state of Massachusetts, is an act of gross irresponsibility.”
Mohegan Sun insists that its agreement with Brigade Capital Management, its largest investor in the Revere casino proposal, prevents it from showing a preference for its Connecticut property. Mitchell Etess, chief executive officer for Mohegan Sun, doesn’t say that his company likes the current language of the law, only that it can work with it.
“We will work with the regulators in whatever shape or form they want,” Etess said in a previous interview with CommonWealth. “If they want to increase the withholding provision, we’re certainly not going to stand in their way. But we’re not saying that has to change or we’re not going to operate.”
The commission did not act on some requests by Wynn et al. It declined to support Wynn’s request that casinos not be required to provide a licensed day care center for employees, or to ask that the 25 percent tax on gross revenues not be changed for the 15 years covered by licenses, noting that current legislatures cannot bind future legislatures. It also declined to address Wynn’s request that the procedure for pooling and distributing tips be changed or to change a requirement that casinos implement a system so that patrons can keep track of their winnings and losses be altered.
The commission concluded that some of the rules operators consider “administratively burdensome” could be addressed through its regulatory powers.
Meanwhile, Boston Mayor, who has so far lost in his efforts to force his city to be considered as a “host community” for the Wynn and Mohegan Sun casino proposals, revealed last week that he will be meeting with representatives of both developers to negotiate “surrounding community” mitigation agreements. The goal is to get such agreements in place before the June 16 deadline, when mandatory arbitration is forced on both parties.
The mayor told reporters, “We’ve set up meetings with both proponents again to talk to see how quickly we can get possibly to an agreement. If not, we’ll keep our options open. If we can’t get into an agreement, it automatically goes to arbitration, so we really don’t want to head there. If we do enter into and negotiate a surrounding community agreement, I would rather do it without arbitration, rather do it at the table.”
Wynn and Walsh and his predecessor have not been on the best of terms over the months, but the most recent meetings have been “productive,” according to a spokesman for Wynn. The Mohegans also characterized their meetings with the mayor’s representatives as “productive.”
Walsh says he is going to wait to see how the negotiations go before deciding whether to challenge the commission’s ruling on the city’s status in court. “It’s still an option, but we’ve had a couple of good conversations, so we’re going to see where we go with those discussions,” Walsh told reporters.
Both Wynn and the Mohegans have reached mitigation agreements with surrounding cities, including Cambridge, Everett, Chelsea, Lynn, Malden, Medford, Melrose, Salem and Somerville for the Mohegans, with Winthrop and Saugus still to be decided and Cambridge, Malden and Medford for Wynn, with Chelsea and Somerville still in arbitration.
Repeal the Casino
Polls show that most Bay Staters want a say in whether casinos are allowed in their state, and therefore support the Repeal the Casino Deal repeal referendum being on the November ballot.
The most recent poll, by MassINC Polling Group for WBUR, found that 52 percent of 504 likely voters supported having a ballot measure on gaming compared to 39 percent who oppose such a vote. The pro-vote percentage has grown 7 points since March.
The same poll showed that 52 percent of those surveyed did not have much confidence in how the Massachusetts Gaming Commission is doing its job of choosing developers to grant casino licenses. That percentage combined 29 percent who said they had “not too much confidence” and 23 percent who had no confidence at all. These percentages don’t result from the many missteps of commission chairman Stephen Crosby, who was forced to recuse himself from the process of choosing a license for the Boston metro zone: most of those polled said they had never heard of Crosby, 15 percent approved of his job performance while 16 percent did not.
The possible repeal of the state’s gaming expansion law has become regular fodder for candidates for public office with their eyes on the November election. Martha Coakley, the attorney general running for governor, is in the middle of it since it was her ruling that the repeal referendum was unconstitutional that put the issue into the lap of the state’s highest court. It is considering her argument that the repeal would constitute an illegal “taking” of private property as well as arguments from the other side.
Candidates to succeed Coakley have weighed in, with Warren Tolman supporting letting the voters decide, while opponent Maura Healey says she would actively try to repeal the law.
Other factors are at play if the Supreme Judicial Court rules that the measure is legal. Then the battle will move to the airwaves, TV, the internet and print, with unions, especially building trades unions, poised to play a major role in the debate. The ruling is expected in July.
In Plainville, where the only slots parlor designed for 1,250 machines has already started construction at the Plainridge Racecourse, the $225 million project, with daily images of thousands of workers in hard hats raising girders, pouring concrete and taking home a paycheck will provide ammunition for Penn National Gaming, which is poised to pour many thousands into a campaign to defeat the referendum. A thousand construction jobs are at stake at that site alone. The casino is due to open next spring.
Recently Penn spokesman Jeff Morris declared, “We’re confident that at the end of the day, the message of jobs and revenue will win out. If the law is repealed, all of this stops. All of these jobs stop.”
According to Lasell College political science professor Paul DeBole, interviewed by the Boston Globe, “There’s really no better visual than a bunch of people standing in line at the unemployment office vs. a bunch of guys in hard hats doing work for a major construction project. If I was a pro-casino person, those are the kinds of commercials I’d be making right now.” This will allow pro-gaming people to sidestep the issue of whether gambling is moral or not, and to go straight to whether it’s good to create jobs.
John Ribeiro, leader of Repeal the Casino Deal, addresses the question by stating that there is no job shortage for construction workers in the state. He recently told the Globe, “We are experiencing a construction boom in Massachusetts, specifically around Boston, without the casinos. There are a lot of jobs.” He argues that casinos create “economic black hole(s)” in their communities and cause a net loss of construction jobs.
While they wait for the court to rule, Ribeiro and his allies are busy collecting signatures. They need to collect 11,485 valid signatures by June 18, but are confident of doing so.
These efforts have so spooked MGM Resorts that it has asked the commission not to award a license for the Western gaming zone until the repeal is decided. MGM, which proposes to build in Springfield, is the only applicant for the Western zone.
The commission is scheduled to vote on whether to award the license on June 13. The commission will look at five categories, including an overview of the project, finances, economic development, building and site design and mitigation. The commission is not required to award the license, and it could attach conditions to the license.
