Newly Seated Massachusetts Gaming Commission Chairwoman Cathy Judd-Stein will gavel her meeting to order this week, and confront a full agenda made even more pressing because some issues were punted to wait until she was aboard.
One of the biggest is the fate of the Encore Boston Harbor casino that is due to open in June, but which remains in limbo because the commission hasn’t yet ruled on Wynn Resorts’ continued suitability to hold the Boston metro license. That suitability was placed in doubt last year when founder and CEO Steve Wynn was forced to leave the company under a cloud of sexual harassment allegations. Wynn not only left the company, but sold all his shares.
Nevertheless, for the last year and more the commission’s investigators have been searching for evidence to show whether the company’s executives were covering up for Wynn when the company was undergoing a suitability review in 2015 before it was originally awarded the license. It also seeks to determine if Wynn’s toxic influence has been washed away from the current corporate structure and leadership.
As Matt Murphy of State House News Service observed, “The longer this goes without a decision, the harder it gets to pull the plug, if that’s the route they want to go. But we’re waiting on some court proceedings in Las Vegas to help clear the path for that.”
The Region “C” Question
Another issue is the southeastern part of the state (Region C,) which is entitled to a casino by law, but which the commission put off issuing out of deference to the Mashpee Wampanoag Tribe, which at one time had land put into trust for a casino in Taunton, only to have the Department of the Interior revoke the action under a federal judge’s order.
Currently the only open route for the Mashpees to build their casino lies with the U.S. Congress, which is considering a bill that would put the land into trust.
Rush Street Gaming has brought this issue back on the burner by petitioning the commission to reopen the bidding process, and to reconsider its proposal for a casino in the Brockton fairgrounds. The proposal has been made under Rush Street’s subsidiary Mass Gaming and Entertainment, whose principal is Chicago billionaire Neil Bluhm, which spent $430,000 for lobbyists in the Bay State last year. Bluhm’s partner is George Carney who owns the fairgrounds and also owns a betting parlor at a former dog racing park, Raynham Park.
Bluhm also contributed to the federal court legal challenge by some residents of Taunton—the challenge which has so far stuck the casino in the mud. The tribe certainly views Bluhm as its nemesis. The challenge argued that the federal decision to put the land in trust violated the U.S. Supreme Court’s Carcieri v. Salazar ruling that tribes recognized by the federal government after 1934 can’t put land into trust.
The tribe has argued and historians agree that it was the tribe that greeted the Pilgrims when they landed at Plymouth 403 years ago. However there is no historical record of the tribe’s interaction with the federal government before 2007, when the tribe achieved recognition.
Seeing an opportunity, MG&A petitioned the commission to review the decision in 2016 to deny its application for a license. One factor commissioners cited at that time was the desire not to saturate the gaming market with two casinos in the region—even though the tribal casino would not be under state jurisdiction. They also weren’t impressed by the design, which the commission chairman of the time said lacked the “wow” factor.
The MGC voted 4-1 to deny the license.
Three years later Mass Gaming continues to press the commission. Last week the company’s attorneys sent a letter that said, “Region C has been neglected and once again left behind.” The letter reminded commissioners that Rhode Island recently opened a casino on the border with Massachusetts and legalized sports betting at its two casinos last fall.
MGM Springfield
Now, six months after the $1 billion MGM Springfield opened, its operators are doing some soul searching as to what they need to do to fulfill its promise.
The casino has had a solid impact on the region, not the least being the 2,865 people it employs. Now the question is, will the Encore Boston Harbor, due to open in June, or the East Windsor casino Connecticut’s gaming tribes are fighting to open adversely impact the casino’s bottom line. Will it continue to be able to offer 3,000 jobs?
The Indian casinos in Connecticut had predicted they would lose 25 percent of their profits, instead it was about 9.2 percent. They no longer seem worried, and argue that the MGM’s rollout, which was less impressive than anticipated, is the reason they weren’t existentially threatened.
The casino was fast out of the gate with an impressive $42.5 million the first five weeks. After that it settled down. Monthly revenue figures have ranged from $21.6 million in December, to $22.2 million in October and $21.2 million in November.
In January MGM told investors it planned company-wide cutbacks, that might or might not include the Springfield property. The purpose is to consolidate business functions at its Las Vegas headquarters. It plans to cut $100 million in payroll over the next 24 months. The plan is to increase cash flow $200 million by the end of 2020 and another $100 million in the next year.
That’s about a 3 percent cut in payroll, which could mean a different number of individuals cut in the workforce.
The biggest threat to the MGM is the $2.4 billion Encore Boston Harbor, assuming it is able to survive the investigations by the Massachusetts Gaming Commission.
If the MGM is proving less of a threat to the Mohegans and Pequots, their proposed East Windsor casino is no threat at all—yet. No groundbreaking has happened because the tribes haven’t gotten the nod from the Department of the Interior to amend their tribal state gaming compacts, something required by the legislation that created the joint tribal gaming authority.
