MGM Resorts International on December 5 paid almost million to eight “surrounding communities” that it previously struck deals with, as required by the 2011 Expanded Gaming Act. The payments are to mitigate some of the effects of the Springfield casino, which will break ground early next year, with an opening in 2017.
The $800 million casino resort has been licensed by the Massachusetts Gaming Commission to serve the Bay State’s western gaming zone.
On November 20 MGM paid its host city of Springfield $1 million to help create an unrestricted community development grant plus $150,000 that will be used for a pavilion at an area golf course. The gaming company will also make upfront payments to the city until the grand opening of the casino, when it will be paying $14 million annually.
Payments will be used in many instances to address traffic and roadway impacts in the towns affected. But they will also be used to improve existing situations. In some cases residents of the affected communities are to be given preferences in hiring by MGM.
Some communities, such as Hampden, who tried to get mitigation funds, were denied them because they couldn’t convince MGM or the Massachusetts Gaming Commission, that they would suffer negative impacts from the casino.
The commission ruled, for instance, that Northampton would not be negatively impacted, despite its mayor’s contention that the casino would hurt the town’s businesses 20 miles distant.
Some communities surrounding Springfield are also looking to that city for possible inspiration on urban development and design.
Timothy Murray, president and chief executive officer of the Worcester Regional Chamber of Commerce told the Republican that he is watching closely to see how the city in partnership with MGM is using the advent of a casino to benefit the community and surrounding region.
“It’s my understanding that the Springfield model is trying to completely reverse that big-box, keeping everybody under one roof mentality,” he said. He has spoken to MGM executives and cited their interest in creating “a new paradigm that’s outward looking and encourages the kind of cross-pollenization of locally owned businesses. I think it’s a very interesting model.” Murray, a former lieutenant governor, and former mayor of Worcester, compares this unfavorably to some previous malls that have been built in the state.
Gaming in Springfield will have a definite impact on the arts: artist John Simpson has been hired to render murals inspired by the Wizard of Oz, one of MGM’s greatest films. Simpson has already begun the series, which he hopes to have completed by the time the casino opens in downtown Springfield.
Simpson told the Republican, “I’m really excited about these and I have been trying to do as much as I can over the weekend. Once the characters are done I will be able to focus on the background and maybe even add some words.”
Wynn Everett
The mayor of the town that was passed over to give the gaming license for the Boston metro area to Wynn Resorts is demanding that the Massachusetts Gaming Commission investigate reports that the federal government is investigating Wynn for alleged money laundering.
Revere Mayor Dan Rizzo pointed to the recent report in the Wall Street Journal in a letter he sent to Commissioner James McHugh. That article alleged that the Internal Revenue Service, Drug Enforcement Administration and several U.S. Attorneys are investigating the gaming giant.
The commission recently awarded the license for the Boston metro area to Wynn, which plans to build a casino resort in Everett, along the Mystic River. The mayor called for a public hearing to, “compel the attendance of all necessary witnesses to testify under oath and, to the extent necessary, issue subpoenas for the production of documents and records.”
Rizzo added, “The public should not have to learn of these allegations from the Wall Street Journal, months after the licensing decision has been made and weeks after the public has been called to decide upon the future of casino gaming at the ballot box.”
The commission reiterated previous statements that it is “reviewing the matter” and that its investigative and enforcement bureau would be giving a report to the commission at a future meeting.
The city of Revere previously filed a lawsuit against the commission, alleging that it acted improperly when it awarded the license to Wynn.
Wynn plans a $1.6 billion casino resort complex with a 500-room hotel. Although seemingly huge, the Wynn will be somewhat modest compared to the Wynn Las Vegas, which has 2,700 rooms. Wynn’s statements have led experts to believe that he plans to concentrate on a luxury hotel.
That comparison in scale is also true of MGM, whose MGM Grand Las Vegas is the second largest casino on the globe, with 5,000 rooms.
Because the Wynn Everett will be a short drive from Boston it will also be able to tap that city’s population in addition to the high rollers and tourists that the resort’s luxury appointments will attract.
Gaming Impact Report
Meanwhile the state is conducting two of the most far-reaching studies of the impact of the new casinos, with data to be collected before, during and after the casinos open, making the Bay State a virtual statewide laboratory for gaming research.
The studies will cost a total of $4 million, to be paid for by gaming fees and taxes. They will be conducted by the University of Massachusetts-Amherst, under the direction of Rachel Volberg, an expert in problem gaming.
The $225 million Plainville slots parlor being built by Penn National Gaming is not due to open for business until next summer, but the Massachusetts Gaming Commission recently authorized two scientific studies, both of them connected to the question of whether gambling causes addiction and leads to increases in other social ills, such as crime, as well as lower home values.
The two studies are considered groundbreaking, in large part because they will collect data before the casinos open. Commission Chairman Stephen Crosby commented “The mission is to substantiate with data — not anecdotes or myths — what the impacts of casino gambling are in Massachusetts,” He added, “It never has been done like this anywhere else and it will create a database of information that will be valuable worldwide. This will be a phenomenal resource.”
The first study, dubbed the Social and Economic Impacts of Gambling in Massachusetts, has already been underway for several months. It involves a survey of thousands of state residents. An identical survey will be conducted a year after all four casinos are operating. This will Volberg told the Boston Globe, provide “a snapshot before and a snapshot after, on problem gambling prevalence and gambling participation.”
Public attitudes about gaming, the gaming behavior of local residents, why people gamble and whether gambling is considered a recreation, will all be surveyed. Another set of surveys is planned for 2018.
The second study the Massachusetts Gambling Impact Cohort study, will focus on a “cohort” of 2,600 individuals, and follow them for at least five years.
According to Volberg, “It’s truly remarkable that we’re going to be able to start this study in advance of any of the casinos being operational. The cohort study “focuses on getting a better understanding about how problem gambling starts, develops, and resolves over time. To do that you really need to follow individuals, rather than taking a population snapshot.”
Casino Opponents Stay Organized
Meanwhile the people who unsuccessfully tried to repeal the state’s gaming expansion law have decided not to disband, but will instead refocus their efforts on becoming a gaming watchdog.
Celeste Myers, who led No Eastie Casino, told reporters this week, “None of us are willing to just roll over and walk away. We have every intention of morphing to meet the next phase.”
She said she and her allies would seek to get anti-casino people put on gaming advisory boards that the law requires.
Myers and allies in Repeal the Casino Deal, saw their initiative defeated by more than 60 percent of the vote cast.
Steve Abdow of Repeal, said, “We are mulling things over. Nothing is definite, but there is a chance we’ll try some things to keep an eye out, to . . . ensure that the Commonwealth’s interest is protected.”
Rob Pyles of Faith for Repeal, told the Boston Globe, “It’s happening; they’re coming. So what’s our role? Do we disband and say we tried? Or do we channel what we’ve already built into some sort of mechanism for accountability?” Pyles said his group’s members fear that if the casinos don’t hit their projected revenues that they will then ask for a lower tax rate. The law calls for a 25 percent tax rate on the three casino resorts and 49 percent on the one slots parlor.
