The FBI agent in charge of most of New England created a minor firestorm last week when he warned that expanded gaming in the Bay State might lead to corruption and an increase in organized crime.
Special Agent Vincent Lisi warned last week that the growth of gambling in the region was creating the perfect environment for the growth of corruption and assorted criminal activities.
“When you look at legalized gaming, you have a heavy amount of regulation, along with a lucrative business,” said the agent, adding, “Those two factors combined make for pretty fertile grounds for corruption of public officials.”
The Boston office plans to launch a public awareness campaign called “Stop Corruption Now,” using both advertisements on billboards and social media. It has already inaugurated a hotline for the public to report corruption.
Lisi’s comments prompted a stern rebuke from the American Gaming Association, which declared, “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.”
It added, “The American Gaming Association and our entire industry are committed to working with law enforcement to ensure the integrity of our product, the safety of our customers and the best interests of the communities in which we do business.”
It also prompted a critical review from the Republican, the newspaper serving Springfield, where MGM Resorts is building a new casino resort. The newspaper’s editorial declared, “It is good that the FBI intends to keep tabs on the industry. That is the job of such an agency, but it should be done privately, not speculatively – and only when there is evidence and not conjecture.” It added, “If problems emerge, the FBI and all other involved agencies should investigate and, if necessary, prosecute. But the casinos are here – a legal, regulated business approved by voters of Massachusetts.”
Supporters of gaming in the state note that the gaming commission—not local officials— will oversee the gaming industry.
Lisi defended his remarks, and said they were not intended as a critique of the new Massachusetts gaming industry, but rather to call public attention to the rise of public corruption crimes in recent years. An example, he said is the conviction on bribery charges of the former Speaker of the Massachusetts House, Salvatore DiMasi. Ironically, it was DiMasi who successfully kept the issue of gaming from being voted on by the legislature for many years, and it was his successor, Robert DeLeo, who led its passage in 2011.
Lisi added, “If you look at some of the cases we’ve had in the past, you’d think they’d be deterrents and that there would be a decline in the numbers that we’ve had. That’s not been the case.”
Public corruption has been front and center in discussions of gaming in Massachusetts, focusing on the granting of a license to operate a $1.6 billion to Wynn Resorts on property in Everett that was once partially owned by a known mob figure, Charles Lightbody. The discussion has intensified with a report in the Wall Street Journal that Wynn may be the focus of an investigation for money laundering.
However, supporters of gaming in the Bay State point out that the Commission has conducted an extremely rigorous vetting of potential casino operators, one so tough that it prompted Caesars Entertainment to pull out, and almost convinced Steve Wynn that he should do the same. Caesars ended up suing the commission over the issue.
Companies besides Wynn that made the cut include MGM Resorts, which is building an $800 million casino resort in Springfield, and Penn National Gaming, which is halfway done building a $225 million slots parlor in Plainville.
MGM Springfield
MGM Resorts International announced last week that it is working towards a 2017 opening of the casino that Hunter Clayton, executive vice president of development told several hundred Springfield residents and contractors was “unique.”
“This is really a tried and true urban revitalization project. The fact that we’re building a casino and hotel is second to the fact that this is a major urban development,” he said, according to the Republican.
Clayton added, “Our Detroit casino is in the city but somewhat separate from the central business district. Here in Springfield, our development is really at pedestrian scale. We’ve made a lot of promises here and it is important to us that we make good on those. We want to exceed the community’s expectations as this is our city now too.”
He talked up the opportunities that are available to almost all members of the construction trades. The first step will be involve demolishing existing structures on the site, installing or upgrading utility systems and other modifications prior to the beginning of the actual building.
He reemphasized the company’s commitment to diverse hiring and contracting and said they are likely to surpass those commitments. It will also work with local colleges to develop training programs in the casino industry.
The MGM project will employ an estimated 2,000 temporary workers in building the casino resort and have a permanent staff of about 3,000.
In a separate but related development MGM Senior Vice President of Public Relations, Jenn Michaels was one of several women honored in the first ever list of the Top Women in PR, an honor initiated by PR News. Michaels is the head of MGM’s 28-member PR department.
Southeastern Casino Zone
The Carney family, owners of Brockton Fairgrounds and Raynham Park, have recently been talking about a plan open a casino at the fairgrounds, and move their simulcast racing broadcasts there also from Raynham.
The Carneys previously applied the Massachusetts Gaming Commission to bring thoroughbred horse racing to Brockton.
Christopher Carney last week told the Taunton Gazette, “We’re looking at all options,” Christopher Carney said. “The city is ready for the next chapter. It’s the largest single piece of land that I can see is undeveloped. … The sky’s the limit.”
The Southeastern or “C” Zone is the last zone remaining to have a license issued for a casino resort. Applicants have until January 30, 2015 to make an application to the commission.
Applicants have been reluctant to apply, even though the commission opened the zone up to commercial bidding after the Mashpee Wampanoag Tribe, initially given an inside track for the license, wasn’t able to meet requirements for a license, including being able to put land in Taunton into trust for a reservation.
The Carneys previously bid for the state’s single slots parlor license, but lost out to Plainridge harness racing track in Plainville.
The Mashpee tribe recently submitted its Final Environmental Report to the state for its 151 acre Taunton site, the final state environmental hurdle it must pass for its proposed $500 million casino resort.
The only federal hurdle remaining is for the Bureau of Indian Affairs issues a decision on the tribe’s application to put the land into trust.
Meanwhile, former Methuen mayor and current executive director of the Merrimack Valley Planning Commission Dennis DeZoglio, was sworn in to his new position as chairman of the Massachusetts Gaming Policy Advisory Committee, which advises the Massachusetts Gaming Commission and makes non-binding recommendations. DeZoglio was appointed by Governor Deval Patrick to replace Robert Hubbard, who died last month.
Commission Chairman Stephen Crosby said the former mayor was a good fit for the committee, since no casinos are planned for Merrimack Valley, so there are likely to be no conflicts of interest.
The committee’s task is to “community mitigation, compulsive gambling and gaming impacts on cultural facilities and tourism.” It meets at least once a year. However, Crosby has said that he hopes the committee will take a “substantive role” as the state’s casinos begin to come on line.
