Two weeks ago the Massachusetts Gaming Commission postponed a decision on whether to award a third casino license—this one for the southeastern casino zone—until early spring.
One of the considerations the commission will be considering is whether awarding a third license, while the Mashpee Wampanoag tribe is planning to build its own casino in Taunton, would be a move towards saturating the market.
Besides the bid for a casino in Brockton, Twin River in neighboring Rhode Island is further along in its move to relocate its Newport slots parlor to Tiverton, which is right on the border with the Bay State.
However, in a piece for the Providence Journal last week John Kostrzewa made the case that it will be the market that will determine the final outcome. He notes that the $650 million casino once proposed for New Bedford by KG Urban died because of “the uncertainty of obtaining viable financing for the project,” according to one of the principals, Barry Gossin.
The purpose of the 2011 law that authorized three casino resorts and one slots parlor was to create jobs and revenue by diverting gaming profits from Connecticut’s two tribal casinos as well as Twin River.
The southeastern part of the state has always been problematic because the law intended that the Mashpee Wampanoag tribe have the license—if it met certain conditions. The condition that the tribe had to wait the longest to achieve was to put the land in Taunton into trust. The process took so long that the commission opened the bidding to commercial bidders.
However, commercial bidders have been hamstrung by the fact that the Mashpees were always in the wings and a tribal casino that doesn’t have to pay any state taxes is a formidable competitor for any commercial casino that must pay 25 percent.
The one bidder remaining in the game is Mass Gaming & Entertainment, a partnership Illinois-based Rush Street Gaming, and George Carney, who owns the Brockton Fairgrounds. They propose a $650 million project on the fairgrounds.
Recently Neil Bluhm, chairman of Rush Street Gaming, indicated that he is impatient for the commission to award a license. “I don’t want to spend the time, effort or money waiting around,” he told the Associated Press. He adds that he already has the financing lined up.
Their casino would be competing against the $500 million Project First Light casino proposed by the tribe. The tribe already has a compact with the state that guarantees the state 17percent of the revenue as long as the tribe has no competition in the zone. If it does, the percentage falls to zero.
Meanwhile Mass Gaming met the extended September 30 deadline and submitted a Phase II application for the license. The original deadline was in May.
Brockton voters narrowly approved of the host community agreement last year with a vote of 7,163 to 7,020.
At the same time the Mashantucket Pequot and Mohegan Sun tribes of Connecticut are moving to identify a location for a third “satellite” casino in that state to try to keep the Bay State casinos from luring gaming dollars away from their two casinos, Foxwoods and the Mohegan Sun.
Kostrzewa observes, “The New England market is already saturated. The giant Wynn Resort, scheduled to open in 2018, seems poised to suck most of the money out of the Greater Boston area while Plainridge Park Casino in Plainville, near the Rhode Island border to the south, will continue to draw slots players’ money.”
The gaming commission has a choice about a southeastern license. Chairman Stephen Crosby has reiterated that it is not required to issue one. Last month commissioner James McHugh added, “I have no preconceived notion as to one or two casinos … If they make a compelling argument, we’ll listen to it.”
MGM Springfield
The president of MGM Resorts, William Hornbuckle visited Springfield last week to repair relations with the city government, relations that have soured a bit since MGM announced that it was changing its plan due to skyrocketing expenses.
Hornbuckle “reaffirmed” MGM’s commitment to a downtown “complex” despite its announcement last month that it planned to replace the 25-story hotel complex with a much smaller hotel in an existing building. The project will still have a 250-room, six story hotel and as many as 35 apartments that will be built in a vacant school department building.
His trip included a meeting with City Council President Michael Fenton and Mayor Domenic Sarno, who remains a strong supporter of the project.
Fenton commented, “They came armed with some good potential solutions and compromises and they made a commitment to having an ongoing dialogue.” He added, “We’ve got a lot of work to do. But it was a good first step and a welcome gesture from the president of MGM Resorts International.”
During the meeting Fenton reportedly told Hornbuckle that the council worried that eliminating the tower would decrease the casino’s “wow factor.”
The city council and mayor would have to approve of the new design, although the final arbiter will be the Massachusetts Gaming Commission.
The MGM announcement so upset some council members that Fenton unsuccessfully attempted to put a non-binding referendum on the ballot to invite the voters to weigh in.
So far MGM has only described the expenses as “skyrocketing,” without actually providing the figures, although Crosby recently noted that the additional costs were nearly $100 million.
According to MGM the costs owe to the fact that the company has to postpone the opening of the casino by a year to accommodate the I-91 viaduct restoration project. The costs of labor and materials will rise during that additional time. Glass walls, for example, have risen in cost by 30 percent in the last year and a half, according to the Wall Street Journal.
According to a spokesman, “Our original 2012 budget of $800 million did have some escalation built into it, but it assumed a 2016 opening. The statewide referendum, as well as coordination with the I-91 construction schedule, have resulted in an additional 18 months of extended schedule that were not initially factored in.”
Eventually the commission, at a future meeting, will have the hard numbers to examine. The company’s estimates involved tapping consultants, contractors in the region and factoring in market conditions and commodities prices.
MGM Springfield COO and President Michael Mathis said last week that in spite of the additional costs that MGM would spend over $800 million.
Southeastern Gaming Zone
Cedric Cromwell, the chairman of the Mashpee Wampanoag tribe, has become the man of the hour in the weeks since the Bureau of Indian Affairs put his tribe’s 152 acres in Taunton into trust, making it eligible for a casino in the Bay State’s southeastern casino zone.
Cromwell, 50, is described in a recent profile by Cape Cod Times as looking “the part of an aging boxer being led to the ring, handlers surrounding him as he shuffles along. Though he just recently turned 50, he looks as if the next punch could send his tall frame into a heap.”
But, “when he gets to the podium, a wide grin envelops his face as he shouts, ‘Maaaaaaaashpeeeeeeeeeee’ to wild cheers. He leads the assembled tribe members in a chant of ‘Mashpee, Mashpee, Mashpee.’ ”
When the BIA announced its decision, Cromwell told his tribe’s members: “It’s been 12,000 years for our people, on this very important land we call Turtle Island, our home, land of the Mashpee Wampanoag. … The past four centuries we’ve been denigrated, called every name but the name we are, the Mashpee Wampanoag. Land taken from us. We’ve been doubted and denied. Turned away, turned down. But yet we still live here.”
Cromwell has led the 2,800-member tribe for six years, taking up the reins of leadership after a former tribal chairman was convicted of federal corruption and embezzlement charges involving the disgraced Washington lobbyist Jack Abramoff.
That was one challenge. Then, the same year he was elected, the U.S. Supreme Court in Carcieri v. Salazar ruled that tribes recognized by the federal government after 1934 can’t put land into trust. Many people felt that ruling doomed the Mashpees’ quest.
At the same time the tribe endured internecine struggles and criticism from many quarters. This hurt Cromwell, but he was resilient and never gave up, always focusing “relentlessly” on the prize.
In 2012, a few months after the legislature approved of the gaming expansion act the tribe purchased land in Taunton, a city with high unemployment that was seen as a good location for a project that would generate economic activity.
Taunton Mayor Thomas Hoye and Cromwell negotiated a “partnership” between the tribe and the city and the voters supported the host community agreement by a 63 percent margin.
The tribe and state negotiated a tribal state gaming compact that was rejected by the National Indian Gaming Commission because it gave the state too much money. This delay, along with the time that the federal government took to process the land-into-trust, prompted the commission to open the southeastern zone to commercial bidding.
Then, a month ago the prize became a reality and suddenly the Mashpees were in the driver’s seat.
Wynn Everett
After hinting for months that a libel lawsuit was in the offing over Boston’s lawsuit to stop the Wynn Everett casino, Wynn filed suit against an unidentified defendant who allegedly defamed the company by releasing subpoenas to the media. The subpoenas were part of the city of Boston’s lawsuit against the Massachusetts Gaming Commission’s decision to award a casino license to Wynn’s $1.7 billion proposal.
Wynn Resorts Ltd. filed the suit in Suffolk Superior Court. The action contends that the subpoenas were not actually intended to serve the purpose of a subpoena, but rather to leak a falsehood to the media.
Martha’s Vineyard
Meanwhile, the Class II casino proposed by the Aquinnah Wampanoag tribe on Martha’s Vineyard continues to split the island’s population.
Thirty years ago the tribe signed an agreement that, in return for returning land that the tribe has had as its homeland for thousands of years, obliged the Aquinnah not to build a casino on the land. Congress ratified the agreement in 1987.
Claiming that the passage of the Indian Gaming Regulatory Act two years later supersedes that agreement, the tribe claims that it has the right to convert an unfinished community center into a small casino with 300 slot machines.
The state and the town of Aquinnah sued to stop the casino. The lawsuit is now in federal court in Boston.
According to Tobias Vanderhoop, chairman of the tribe, quoted by the Boston Globe, “I want my people to have every program and service that they are entitled to as Indian people. We are not just some corporation looking to capitalize on a casino. We are a sovereign tribal government. And these are our lands.”
Not everyone on the island opposes the casino. One resident who preferred to remain anonymous, told the Globe, “If the casino was from anyone else people would be really freaking out. But because it’s the tribe, nobody wants to touch it.”
Another resident who was willing to go on the record, Eva Trussel said, “Do you want to turn it into one big Jersey Shore. It is a beautiful part of the world. I’d hate to see the island tarnished, and that’s the only word for it.”
For years the island’s population has diminished. Some say that the small casino might stop that hemorrhage and keep some of the residents, especially members of the tribe, at home.
While the legal questions are thorny, some of the island’s residents are more practical. Rob Baker, who operates a small business on the island, speaks for them when he says, “I would be shocked if it comes and even more shocked if it succeeds.”
Another local businessman, John Tiernan, added: “I know how hard it is to run a business on the island. I wish nothing but good for the tribe. But I just don’t see it working.”
