The Massachusetts Gaming Commission last week voted 4-1 to increase the amount the horseracing development fund pays to Plainridge Park Casino. The fund is derived from slots revenues.
The racino, currently the only casino operating in the Bay State, and which operates harness racing in the spring and summer, will collect 60 percent of the fund, instead of 55 percent.
The casino opened in June 2015, at which time it was getting 25 percent of the fund, and the rest went to thoroughbred racing. However, there is almost no thoroughbred racing in the state since Suffolk Downs closed. The only races are the 100 a year Plainridge runs.
The great majority of the horse development fund is used to increase the size of purses at a race. Plainridge successfully argued that increasing the size of purses promotes better racing and allows more reinvestment.
Betting on Sports Betting
Meanwhile the commission, along with the Wynn Boston Harbor, which is rising along the Mystic River, are keeping an eye on the U.S. Supreme Court, which will decide in the coming months whether to throw out the Professional and Amateur Sports Protection of 1992 (PASPA), which is a federal ban against sports betting.
Oral arguments were recently made by both sides of Christie v. National Collegiate Athletic Association to the Justices. The case challenging the ban was brought by the state of New Jersey, hence the name of its outgoing governor, Chris Christie. Making the arguments were Ted Olson and Paul Clement, both two former solicitor generals.
Allowing sports betting could easily fatten the take from the Everett casino, which is slated to open in 2019. Wynn already collects a considerable revenue from sports betting in Las Vegas at his luxurious 1,600 square foot Race & Sports Book. Currently Las Vegas is the only place where sports betting is legal. That was grandfathered in when Congress approved of the ban. The fact that not all states are covered by the ban is one of the reasons New Jersey used in challenging the law.
The law was a reaction to the Pete Rose scandal in which arguable the best hitter in the history of baseball was caught betting on sports, including games he was playing in.
Some estimate that as much as $150 billion is bet illegally on sports every year, with a lot of it on games such as the Super Bowl. This alone, says the American Gaming Association and other supporters of ending the ban, makes the ban into virtually a big joke. According to the AGA the Bay State alone could realize $682 million in economic growth and $133 million in taxes, plus more than 3,000 jobs.
Wynn Boston Harbor President Bob DeSalvio told the Everett Independent:
“We at Wynn Boston Harbor are watching the court case with interest. Our industry supports legalized and regulated sports betting but the ultimate decision rests with the courts, state and federal lawmakers and the Massachusetts Gaming Commission.”
The commission discussed the matter at its December 7 meeting. Commission spokesman Elaine Driscoll commented, “We are following any developments closely. The commission has not taken an official position on this topic. I do anticipate it will be raised at the commission meeting on Thursday. Part of that conversation will be a report on the arguments before the Supreme Court, as the commission decides next steps.”
The commission asked its executive director, Edward Bedrosian, to prepare research in case Bay State lawmakers are put in the position of deciding whether to incorporate sports betting into the gaming scheme.
Bedrosian told the panel that in the development of a white paper he would take a “cautious proactive approach,” and added, “The outcome of this case could — and if I could show you my paper ‘could’ is in capital letters — have implications for the potential of legalized sports betting in Massachusetts.”
He added, “If the Supreme Court decided this case in a way that allowed individual states to legalize sports betting, there are many issues that would need to be decided. First, obviously, whether to legalize sports betting, what’s the appropriate tax rate, who is the regulator, who decides the number of licenses, who gives them, how sports betting could be accessed whether in person or online. These are just a few.”
The commission produced a similar white paper two years ago on the subject of daily fantasy sports.
Commission Chairman Stephen Crosby suggested that the paper should provide “a sort of lay of the land today and lay of the land under each of the different outcomes” adding, “There are a lot of states teeing this up and if there is a competitive consideration we ought to at least give the legislature enough of a heads-up with enough time that if they wanted to prepare, sort of, or at least have some committee that knew what was going on, they have time to do that.”
Commissioner Lloyd Macdonald urged an even more cautious approach. “Before we spend significant resources on this I think we should wait and see what happens with the case before the court.”
Also, closely following the case is Bay State Attorney General Maura Healey. Not a supporter of gaming, the AG has urged caution in further expanding the activity in the state.
State lawmakers haven’t considered the issue before now, although it was subject of debate in the 2009 gubernatorial race.
AGA President Geoff Freeman told the Independent that the arguments made before the Supreme Court encouraged him. “The justices of the Court expressed deep interest in the role of the federal government – a role that we believe has created a thriving illegal market that has driven trillions of dollars to offshore websites and corner bookies. States and tribal sovereign nations have proven to be effective regulators of gaming and today’s oral arguments before the Supreme Court moved them one giant step closer to offering a new product that Americans demand.”
Last month Governor Chris Christie said, “From our perspective, this should be a choice for the people of New Jersey. They’ve spoken in a referendum, the Legislature passed a law, I signed it and we think the Supreme Court is going to back the right of the states to do what they think is best in this area.”
If the Supreme Court does return the decision-making to the states, Massachusetts’ legislature and Governor Charlie Baker, not the gaming commission, would decide whether to embrace it. But the commission can assist the legislature by gathering information, including looking at how other states might approach the issue, including tax rates, regulation, how many licenses would be allowed, who gets the license, and whether the wagering can only be conducted in person—or online.
MGM Springfield
With the $960 million MGM Springfield due to open its doors next fall, the Minority Business Alliance of Springfield is holding a seminar entitled “How to do Business with MGM Springfield.”
MGM has committed to certain percentages of minority and veterans hiring, purchasing and contracting and has so far exceeded its goals.
The casino resort in Springfield’s South End will sprawl across a 14.5-acre campus.
Meanwhile the free valet parking program, which the casino premiered ten months ago to help area motorists cope with the problems created by the huge construction project, recently reached a total of 10,000 cars aided. The parking is provided across the street from the construction project and provides parking for surrounding businesses, such as the Caring Health Center, a federally funded program that provides care for area residents.
City officials plan to ask the MGC to extend the program, which includes grant funds created by gaming. Thomas More, interim executive director of the Springfield Parking Authority told the Republican “The program has been quite successful and we’ve seen the numbers increase pretty steadily throughout the year.”
The program was created at the urging of Mayor Domenic J. Sarno as a use for the casino mitigation fund that the commission controls. It was initially funded for $200,000 and later expanded. The number of cars that use it range from 187 to 375 cars daily.
Realtor Goes to Court
FBT Everett Realty, which sold the Everett property on which the Wynn Boston Harbor is rising, is suing the Gaming Commission and Wynn to get more money for the 30 acres, which they sold to Wynn for $35 million, after acquiring it for $8 million in 2009.
They are also suing the law firm that original represented them, the firm of Davis, Malm & D’Agostine.
However, they were initially going to be paid $75 million by Wynn in 2013—until it came to light that it was possible that a man with gangland connections, Charles Lightbody, had an interest in the property.
To deal with that possibility—and on receiving a warning from the Massachusetts Gaming Commission that it might not approve the transaction— Wynn lowered the price to what the land was worth without a casino, so that buying the land would not violate state law that says a convicted felon cannot make a profit off of a casino deal.
The litigants claim that Lightbody was no longer a partner in the land at that time, having sold his interest, and thus they should have been able to sell the property for the original price. In 2016 several associates of FBT were acquitted of criminal charges that they had hid Lightbody’s involvement.
Armed with their acquittals and proof that Lightbody was not a partner at that time, the associates seek $40 million more. Their suit argues that the commission’s action was an unconstitutional “taking.” They are also suing their former law firm because, they claim, it gave them poor legal advice in the case.
