The Massachusetts Gaming Commission once again has pushed back the deadline for submitting a proposal to build a casino resort in the Bay State’s southeastern gaming zone, known officially as Region C. The deadline for initial applications was set at January 30, with the second part of the application due on May 26. The commission hopes to issue a license in the fall of 2015.
Licenses for the state’s one slots parlor, for the Boston metro zone and the western zone have been previously issued.
Region C is the last of the three regions to issue a license, and many see it as the least promising for a casino developer.
When the gaming expansion law of 2011 was adopted, the Mashpee Wampanoag tribe was given first refusal rights on the license, as long as it could meet certain requirements, such as getting a gaming compact from the state, and by putting its land in Taunton proposed for a casino into federal trust.
The last has proven to be the sticking point for the tribe. The Bureau of Indian Affairs has not yet put the land into trust.
Meantime only one other bidder, KG Urban, has actually paid the application fee, of $400,000. KG hopes to build in a now defunct power plant along the waterfront in the historic whaling town of New Bedford.
MGM Springfield
Meantime MGM Resorts has released its environmental impact report for its $800 million casino resort in Springfield. The developer is touting the project as the largest development in the history of the western part of the state.
The casino will have 3,000 slots and 75 gaming tables, a 250-room hotel, retail shopping, restaurants, a cinema, bowling alley, meeting spaces and residences.
The release of the EIR opens a month long review process by the public. The city council has also scheduled a series of meetings with the developer to map out the path ahead and to get updates on when MGM will begin to pay the city the $17.6 million each year that it is committed to. It has already paid a $1 million community grant and plans to pay $4 million in advance of tax payments.
At the first of these meetings MGM Springfield President Michael Mathis told the panel that his company is moving quickly. It plans to release its revised site plans by January and hire a general contractor the following month. Mathis spent 90 minutes with the council, outlining the pre-construction schedule.
That schedule includes final purchase of the property where the casino will be built, creation of a tenant relocation plan for those who will be displaced by this process, plus incentives for business that want to remain in the area.
After the meeting Mathis commented, “We just wanted to get back in front of them and let them know that this is the first of many conversations we will have as we continue to develop.” He added, “Transparency is really important to us.”
Council President Michael Fenton said of the meeting, “It was extremely productive. We are excited to have MGM Springfield back at the table, and we look forward to working with them on our revenue sharing concepts and our land use permissions moving forward.”
The council will hold a series of public hearings, perhaps as many as three, on zoning changes and site plan approvals next year, said Fenton.
Once the permitting process is over, the building itself, on 14.5 acres in the downtown area of Springfield, is expected to take about 2 ½ years to complete, with an opening of 2017 projected. According to a spokesman for MGM, “For almost three years we have been preparing to put shovels in the ground, and as of now we are on track, and moving full steam ahead.”
Other developments in the works include Wynn Resorts $1.6 billion casino resort in Everett, and Penn National Gaming’s $225 million slots parlor in Plainville that is already halfway completed.
Both Wynn and MGM, in unrelated developments, announced last week that they will each acquire at least $1 billion to help pay for their new casino resort developments. MGM’s notes will be due in 2023. Wynn says it has secured a $374 million line of credit and a loan of $875 million.
Wynn’s Everett
Although they recently suffered a devastating electoral loss at the November polls, opponents of gaming in the Bay State aren’t folding up their tents and surrendering on the issue.
John Ribeiro of Repeal the Casino Deal, who lead the electoral defeat, is demanding that the commission prevent the Wynn development from going forward after the report last week that the Justice Department is investigating whether Wynn Resorts has violated money-laundering laws.
The report on the investigation was reveled last week by the Wall Street Journal, which cited unnamed sources. It claims that federal investigators are looking into Wynn’s handling of sports betting as it relates to “high rollers,” as well as the allegation of money laundering of drug money at Wynn operations.
Wynn told reporters it is unaware of any such investigation, suggesting the “investigation” is simply business as usual in the gaming industry. “We have and will continue to work cooperatively with the commission and fully answer any questions they have,” said Wynn spokesman. Michael Weaver said.
Ribeiro declared, “They certainly should put the project on hold until it’s resolved. That would make sense. It’s just another example of what this industry is all about. This is what comes along with the casino industry.”
A spokesman for the commission told reporters that the commission is aware of the report and that it might decide to address it at its December 4 meeting.
The incoming governor, Charlie Baker, turned up the heat on the commission by declaring, “I think the issues that have been raised in news reports—and at this point they are news reports—are ones that should be taken seriously by the Gaming Commission, and the Gaming Commission should pursue them.” He added, “Fundamentally, if this is in fact an open and ongoing investigation, I think it’s important for the Gaming Commission to do its job and review that.”
Wynn has a generally clean record and any accusers would have the burden of proving their allegations, say industry experts.
Although the voters have spoken in the affirmative about whether gaming will go forward in the Bay State, that doesn’t mean that opponents can’t gum up the works of individual casino projects.
For example, the city of Revere and the employees of Suffolk Downs, who lost their own casino bid when the commission chose Wynn, have filed suit against the commission, claiming that it showed favoritism toward Wynn. Some experts feel that this could cause some authorities to question the commission’s vetting of Wynn.
Limiting Losses: Play Management
Last week the gaming commission and the state’s casino developers moved closer to a meeting of the minds on the issue of whether to adopt a system that rewards patrons who voluntarily set a limit for gambling losses and sticks to it, a program known as “play management.”
Two developers remain adamantly opposed to rewarding patrons who set limits with free play on a different date, but they are willing to support a program where patrons set limits on losses per day.
Representatives of Wynn and MGM warned that rewarding players for not going over a limit would lead to players setting unrealistically high limits in order to get the free play—which could be counterproductive for problem gamblers.
Robert DeSalvio of Wynn declared, “If someone has a problem the worst thing is to give him incentives to come back. We don’t want to see him back in the casino.” He added that anything that customers see as “difficult, cumbersome, or embarrassing,” might cause a customer to cross the border for a gaming experience.
Opponents of such a system point to the system that was tried and abandoned by Nova Scotia.
Commissioner James McHugh disagreed. “To say that is different from the incentives you are already providing, it’s an industry-wide thing, that it’s a dysfunctional approach to problem gambling strikes me as inaccurate.”
The operators say they don’t oppose computer software that encourages responsible play, but do oppose programs that patrons must opt out of, instead of opting in. That would mean that a player would be signed up for such a program unless he said he didn’t want to be.
They pointed out that nowhere in the U.S. has the program been tried before. In a statement to the commission by the American Gaming Association, it wrote: “The fact that these limit-setting technologies are in use does not in and of itself mean the effectiveness of these programs has been established on the basis of sound science.”
Judith Glyn, a consultant hired by the commission, said the program targets the occasional visitor to a casino. In an interview with the Boston Globe she said, “It’s to let people go to casinos and enjoy themselves instead of walking out with that horrific feeling of regret because they spent more than they wanted to.”
One operator, MGM, said it worries that the commission will use the four casinos as a “test lab,” for untested theories.
The gaming companies are also concerned that the commission has hired as a consultant Dr. Rachel Volberg of the UMass Amherst School of Public Health and Health Sciences. She will help the state develop the procedures. Volberg is considered to be anti-gaming by casino operators and they question whether her report, due out in several months, will be impartial. The report is called MAGIC (Massachusetts GamblingImpact Cohort).
Commission Chairman Stephen Crosby challenged the developers on those criticisms and said that if they felt that way that they should participate in the study, which one developer said they would be happy to do.
Penn National Gaming is being more cooperative towards such programs, and says it is willing for its Plainsville slots parlor to be used as a test ground. Jay Snowden, Penn chief operating officer told the commission, “Given the lack of empirical or scientific data, we believe it’s paramount to view whatever happens at Plainridge as a test. The goal of that trial is to gather facts. By the time MGM and Wynn open, we should have enough data to see if it is an effective tool.”
The commission doesn’t see such programs as addressing the problems of those with a gambling program, but rather to help average players set a budget and keep to it. It will make a decision about the program next month.
