As if the gaming industry in Massachusetts weren’t already very complicated, a decision by the Department of the Interior to grant land-into-trust status to 300 acres in the state to the Mashpee Wampanoag tribe has definitely thrown a monkey wrench into the system.
The original law that allowed casinos in Massachusetts approved three zones and a single racino. The racino was a straightforward choice, with Penn National Gaming already opening a Hollywood Casino at Plainridge Racecourse. MGM Resorts won the right to build a casino in western Massachusetts in Springfield after beating back Mohegan Sun and Hard Rock International. Wynn Resorts won the Boston area casino after a long and convoluted fight with Caesars Entertainment and later with Mohegan Sun (don’t ask). And the final casino in the southeast region was initially reserved for the Wampanoag tribe, but delays in federal approvals spurred the Massachusetts Gaming Commission to open up the bidding to commercial casino companies.
Last week, in a surprisingly quick decision, the BIA granted reservation status to the Wampanoags that will allow it to build a casino in Taunton. Tribal Chairman Cedric Cromwell called it “truly a glorious, monumental day” for the tribe, which only became a federally recognized tribe in 2007 but can trace its history back at least 12,000 years.
“Today, history has come full-circle,” Cromwell said in a statement. “While some outside the tribe will focus only on our quest to build a destination resort casino in Taunton. For us this goes far beyond economic development. This is about controlling our own destiny and preserving our ancient culture.”
The tribe has committed to contributing 17 percent of its gross gaming revenue to the state (versus 25 percent for commercial casinos) but if a commercial casino is also approved in Region C (the final available license), the tribe pays nothing and the commercial casino pays 25 percent.
Even before the BIA decision was announced late last week, Rush Street Gaming was not a happy camper.
Neil Bluhm, chairman of Rush Street Gaming, whose subsidiary Mass Gaming is the bidder, has threatened to withdraw his company’s bid for a casino license in Brockton unless the Massachusetts Gaming Commissions acts expeditiously on the only remaining application for a southeastern license.
Last week Bluhm said he was concerned that the commission might be dragging its feet until the federal government rules on whether the Mashpee Wampanoag tribe can put 150 acres into trust for a casino in Taunton.
Mass Gaming proposes a $650 million casino resort on the Brockton fairgrounds. But Bluhm said that the Brockton casino isn’t the only project it is working on.
“I’ve got other things to do,” said Bluhm. “Do I want to be here? Yes. I’m not giving an ultimatum, but I’m not going to sit here waiting forever.”
Bluhm says he can compete against a tribal casino, even one that pays nothing to the state. Bluhm insists that he is not worried about the possibility of competition from the casino resort that the Mashpee Wampanoag tribe threatens to build in Taunton or the actual competition that Steve Wynn’s Everett casino will provide.
Last week he told the Boston Herald that it is likely that the tribal casino may never happen or will be mired in court challenges for years.
“The commonwealth is so much better off if they pick us because you take away the risk that the Taunton casino never opens,” he said. “You’re sure that you’re going to have a casino, and it’s going to be successful or I wouldn’t be spending my time.”
He added, “The Mashpee face a long legal road,” said Bluhm. “I don’t want to spend the time, effort, or money waiting around.
“I’m not saying, ‘Pick our proposal,’ but I am saying, ‘Consider our proposal, see if it qualifies for a license and if it is in the best interest of the commonwealth, then make a decision, even while the tribe’s case remains unresolved.’ ”
Bluhm has declined to say whether or not his company would be among those mounting a legal challenge against the Mashpees. He told the Sentinel & Enterprise, “We’ll consider anything that makes economic sense.”
He later told the Sentinel & Enterprise, “We want to know that we’re not wasting our time,” he said, adding, “I’ve spent over $3 million. I can afford it. But it’s time. Time is more valuable than money. One of my partners says, ‘Neil, I think you’re nuts to hang in here,’ but I think it will be successful.”
At the request of Rush Street, the commission recently invited public comment on whether it should make a quick decision on the license or wait until the Bureau of Indian Affairs rules on the Mashpee proposal. Now BIA decision has been made, it’s uncertain how the commission will react.
Penn National, the owner of the Plainridge racecourse and the Hollywood Casino, is expected to legally contest the BIA decision.
“The commission repeatedly has informed applicants that it is under no obligation to issue a license in any region, including Region C,” the company wrote to regulators.
Brockton signed a host community agreement with Rush Street Gaming affiliate Mass Gaming and Entertainment in February after winning a very close referendum vote. Mass Gaming is a partnership of Rush Gaming and George Carney, owner of the Brockton Fairgrounds.
Some gaming critics have questioned whether the licensing process should go forward since the only rival to Brockton’s bid, that of KG Urban’s New Bedford proposal, had to withdraw after it was unable to nail down any financing. Might that not happen with Brockton, they reason.
At last week’s commission meeting Chairman Stephen Crosby wondered out loud whether Bluhm’s company would have trouble obtaining financing for its proposal, as happened with KG Urban.
It was in response to Crosby’s question that Bluhm aimed his own remarks about how much better a location Brockton is than New Bedford was. Especially its closer proximity to Boston.
Bluhm argues that his proposal will attract players who don’t want to deal with the Boston metro traffic to reach the Wynn Everett. He told the Herald, “Theirs will be a nice place, but for some it won’t be as convenient as us. But we are not going to kill Steve Wynn. He’s going to do fine.”
But even with tribal competition, Bluhm said he estimates the Brockton casino will bring in about $330 million annually.
This is based on an analysis by the Innovation Group that shows $404 million in gaming revenue, which would be reduced to $330 million by participation by the Mashpees.
He told the News Service, “We’ll still have a profitable casino. We would not be working on this if we thought that this wouldn’t succeed if there was also an Indian casino.”
If the commission were to act on Bluhm’s request to expedite the application it would be departing from previous examples, which including a complete vetting of the applicant’s full application. That application is due on September 30. The commission also has the option of issuing no license at all if it is not satisfied with the application.
The possibility that the Mashpee tribe might have been to eventually get federal leave to put land into trust can be seen in the rising stature of the tribe in national gaming circles.
Before the BIA decision was announced, Cromwell, chairman of the tribe, was co-host of the Native American Financial Officers Association convention, a gathering of more than 100 tribes, which was held at the Westin Copley Hotel in Boston. Wells Fargo and Bank of America organized it.
Various financial VIPs, such as bankers, lawyers and accountants, played court to the chairman.
This was the first time that the association has met in Boston, a sign of the growing importance of the state in Indian gaming, even if a casino has yet to break ground. Cromwell was obviously pleased for his region to be showcased. “We wanted Indian Country to come to Massachusetts, to Boston, because Boston is a great city,” he said, quoted by the Boston Globe.
Cromwell’s tribe of about 2,500 members has a lot riding on the possible success of the Taunton casino. Cromwell shared his ideas, including that of creating tax-free zones to take advantage of the fact that states cannot tax tribal enterprises, or non-tribal enterprises that operate on tribal land.
Cromwell said, “Many jobs are going off-shore because of the tax structure in the U.S. We want to bring them back, and attract them to reservations. Let’s bring them back. A casino is only one spoke in the wheel for us,” he said. “A very important one, but only one.”
The other Wampanoag tribe, the Aquinnah Wampanoag, who want to build a Class II casino on Martha’s Vineyard, were also very much in evidence at the conference. They were dressed in traditional garb, similar to what they might have worn when they greeted the Pilgrims who landed at Plymouth Rock in 1620.
Jonathan Perry, a council member, led them in a dance and then told the press later, “Our people have always been here,” Perry said in a later interview. “But this conference marks a fair and honest recognition of the native presence within Massachusetts.”
Both Governor Charlie Baker, who played no role in gaming legalization or licensing decisions, and Senate President Stan Rosenberg, who is also new to his position, said gambling regulators have to weigh the “significant market oversaturation that would no doubt occur with multiple resort casinos” in the region.
Wynn Everett
The largest private development in the history of the Bay State is about to begin.
Construction equipment and the men and women to employ them began arriving at the 33-acre site of the Wynn Everett casino last week, two weeks after the state’s environmental agency issue permits. They will soon begin pre-construction work on the $1.7 billion casino resort that will include a 600-room hotel, casino, restaurants, retail and a waterfront area—all expected to be ready for business in 2018. As many as 4,000 construction workers will be employed.
The casino will be built on the former site of the Monsanto Chemical plant. Environmental clean up of the land will begin before the end of 2015. Once that is complete the Wynn organization will be ready for a groundbreaking, possibly in the spring of 2016.
Wynn Everett GM Robert DeSalvio last week told Boston.com, “We’re looking to begin remediation shortly, and we want to make sure that in advance of that the site is safe and secure and fenced in.”
The Wynn Everett remains the focus of a strenuous legal effort by the city of Boston and several other smaller cities to get the license that the Massachusetts Gaming Commission issued thrown out. Boston Mayor Martin Walsh has alleged corruption and in his lawsuit accused Wynn of having had confidential information available to him from a state and federal probe of the convicted felon who was part owner of the land that Wynn purchased for the casino.
Walsh insists that traffic impacts on Sullivan Square in Charlestown (across the Mystic River from the site, and inside the city’s boundaries) should give voters of that borough a right to vote on it. Walsh’s lawsuit seeks to have Boston designated as a “host community,” in spite of the fact that state law’s definition of what a host community is does not include Boston.
If his lawsuit, which is actually against the commission itself, prevails, Wynn would be forced to negotiate a possibly lucrative deal with Boston, or possibly be forced to give up the project altogether.
Meanwhile, Wynn, who is not named in the lawsuit, keeps on as though it doesn’t exist. In Everett, the topic of conversation among the locals is the rumor that Wynn plans to bring planeloads of the newly rich from China.
The theory supposes that the Chinese, having discovered Wynn’s enormous casino resort in Macau, will want to travel to the U.S. to experience the Wynn Everett.
According to the Massachusetts Politics Blog, many of the locals predict that Wynn will operate charter flights from China, and even send yachts to big up the highest of high rollers at Logan Airport and ferry them across the water to the casino.
Of course, the casino is not being built near Boston mainly to attract Chinese. Its main target audience is the residents of Boston metro. The environmental impact report notes: “The MBTA’s Orange Line is a key component of the project’s transportation strategy to maximize patron and employee use of non-automobile travel modes,” adding, “A significant proportion of patrons and employees are expected to travel on the Orange Line.”
To grease the rails for that to happen Wynn will pay the Massachusetts Bay Transit Authority $382,000 annually to bring the serve to Everett.
