The Massachusetts Gaming Commission will soon vote on whether to authorize a third commercial casino in the Bay State in Brockton, or let the Mashpee Wampanoag’s First Light Resort & Casino in Taunton remain as the only casino in the region when it opens next year.
The two proposed casinos are about 20 miles apart.
Things the commission must consider: The Plainridge Park casino in Plainville is not “off and running” quite as energetically as had been hoped. Rhode Island voters will decide whether to move a casino now located in Newport to Tiverton, just across the border with Massachusetts.
The commission is expected to vote on the Brockton casino next month. The Mashpees want their $500 million casino to operate alone, and have even threatened to sue if the commission allows the Brockton casino to move forward.
Currently the Taunton casino itself is the subject of a lawsuit by some residents in the city who say the Bureau of Indian Affairs violated a 2009 U.S. Supreme Court ruling when it put the Taunton land into trust. That ruling said that tribes recognized by the federal government after 1934 cannot put land into trust. The tribe was recognized in 2007.
The Brockton casino developer, Neil Bluhm and Rush Street Gaming, is contributing funding to that lawsuit at the same time that it is arguing before the commission that backing the tribe’s casino is a risky gamble because the lawsuit might prevent it from opening.
Rush Street Gaming proposes to build a $677 million casino on the Brockton fairgrounds. Bluhm argues that his casino is sure money for the state, while the tribal casino is iffy money.
If the 1,300-member tribe’s casino faces competition its tribal state gaming compact allows it to pay the state nothing. If it maintains its regional monopoly it will pay the state 17 percent of its profits. The commercial casino will pay 25 percent, plus a one time licensing fee of $85 million. This would, in and of itself give the Indian casino a competitive advantage, but it’s one that Bluhm has repeatedly said his casino is prepared to accept and that it can compete effectively in that environment. The fact that Rush Street Gaming is trying to stop the tribal casino in its tracks might argue against that point.
Richard McGovern, a Boston College professor who is an expert on gaming issues, told the Boston Globe that the commission faces a thorny choice. “If the commission denies the Brockton license and the Mashpee can’t get a casino built, that region goes without a casino. If the commission approves the Brockton license and the tribe goes ahead and builds, then there’s two casinos within 20 miles, and that’s not good either.”
Commission Chairman Stephen P. Crosby acknowledged the tough decision he and his colleagues face last week in a statement: “The Commission is keenly aware that the Commonwealth’s expanded gaming legislation contemplated only one casino in Southeastern Massachusetts,” he said, adding, “But it is equally true that the legislation did not contemplate that region being left in a state of extended uncertainty.” He added, “Reconciling these two competing public policy goals fairly is the challenge the Commission is now trying to meet.”
When the gaming legislation was approved in 2011 lawmakers and then Governor Deval Patrick were working off the same playbook: a strategy designed to maximize casino profits by limiting them to four locations, including the tribal casino.
New England gaming expert Clyde Barrow, based at the University of Texas Rio Grande Valley told the Cape Cod Times “There’s no question that the intent was to have three casinos and a slot parlor and that the southeast region was preferably to be an Indian casino. That was the intent and plan and now it’s coming to fruition.”
The tribe, the only federally recognized tribe capable of operating a casino without state blessing, presented an issue because unless the tribe was included in the state’s plans it was legally capable of operating a casino independently and pay the state nothing.
The stipulation that the tribe be given special status by the legislation was the solution they arrived at. The new law set what were considered to be relatively easy goals for the tribe to achieve, including putting land into trust. It was the final requirement that proved to be the sticking point. The Bureau of Indian Affairs took much longer than anticipated to put the land into trust, and the commission opened up bidding for a commercial license.
Then last fall the BIA put the land into trust in Taunton.
Recently the tribe sent a letter to the commission insisting that it is required by the 2011 law and is not allowed to grant a license to Brockton. Doing so, said the letter, would be “yet one more breach of promises to Native Americans, which have taken place for generations.”
Meanwhile, the tribe plans a groundbreaking for its casino on April 5. It says it can open a new casino as early as the summer of 2017.
Mass Gaming & Entertainment, a subsidiary of Rush Street Gaming, maintains that the tribe is posturing and that the casino is very much a risky business due to the federal lawsuit. The lawsuit, it claims, could take ten years to resolve.
Attorney Adam Bond, who represents the Taunton residents challenging the Mashpees, argues that the tribe has no historical ties to the city and that the federal government overstepped its bounds in putting the land into trust.
“The fight is about government getting too big,” he told the Oneida Dispatch. “It’s about government going rogue and ignoring its federal mandate.”
Tribal Chairman Cromwell calls the lawsuit, “a desperate attempt by Mr. Bluhm to force the Massachusetts Gaming Commission to approve the plans for a casino in Brockton” and adds, “Clearly, Mass Gaming & Entertainment and Neil Bluhm are taking the low road here.”
Barrow saysthat the tribe may have the advantage in this fight. Speaking of Rush Street Gaming, Barrow said, “It’s a tough row to hoe. They’ll have to continue making the same argument they’ve been making, that there’s room for two casinos in the same market.”
The commission has another hearing scheduled for later this month in Brockton.
Crosby commented last week, “Nobody wants four casinos. Nobody wants two in Southeastern Mass. But we owe it to the commercial folks to take a look at what they’re telling us, see what their argument is and as you said there are hurdles still in the way of the tribe. It is not a done deal.”
At the last hearing the commission asked tribal attorney Arlinda Locklear if the federal lawsuit could stop the casino from going forward, and she declared that it would not.
She told commissioners that the U.S. Department of Justice worked with the department of the Interior in the period leading up to the decision to put the land into trust.
“That decision was not made lightly. That decision was the result of three years of close and careful deliberations. … Those two agencies worked closely together, to address every single legal issue and historical argument that had to be addressed.”
Commissioners questioned Locklear closely on the legal questions of putting the land into trust. She said the language governing this particular land into trust decision involved ambiguous language and that both departments felt that their interpretation of it was “entitled to deference by the court.”
Lockyear also stated that the lawsuit over the legality of the BIA decision wouldn’t affect the construction project.
She said, “Finally, let me say the fact that that lawsuit has been filed affects none of this. That lawsuit proceeds and will fail, we believe, at the end of the day. … The project is ready to go. It has full funding, and we think it’s going to happen.”
Despite the lawsuit, Barrow says there is plenty of precedent for the tribe moving ahead. “They move forward and once revenue is coming in, it becomes difficult for any level of government to say ‘tear it down,’” he said.
The tribe has also answered Bluhm’s assertion that it doesn’t have sufficient funding for the project by recently revealing that the tribe is backed by the Genting Group, the largest casino developer in the world.
Kevin Jones, an executive with Genting Massachusetts, told the commission that Genting operates 50 casinos with $45 billion in annual revenue and added, “We’ve put this together so we can open on a fast-track basis in 2017.” He promised that the project would be “best in class.”
Jones said, “Genting will operate the tribal casino on behalf of the tribe. We will operate the casino while helping to build up the capacity of the tribe to operate it themselves. Our role is to work ourselves out of a job on behalf of the tribe.”
Cromwell told the commission: “Genting is putting up millions and millions and millions, and has never stopped believing in our goal.”
Barrow notes that Genting’s Resorts World in New York is the most profitable casino in the United States.
First Light Casino will be built in phases. Phase I will include the casino, with 3,000 slot machines, 150 gaming tables and 40 poker tables, dining, entertainment and nine retail shops. Three 15-story hotel towers, a 31,000 square foot ballroom, parking garage, water park and other amenities will be added in subsequent phases. Design is by Steelman Partners.
Construction will employ about 1,000 temporary workers and the casino, once open, will generate over 2,500 permanent jobs.
If the tribe is able to open in summer 2017 it will be the first resort casino to open in the Bay State and will beat both $2 billion Wynn Resorts casino in Everett and the $950 million MGM Springfield, which are aiming at opening more than a year later at the earliest.
Recently the tribe unveiled its plans that include two casino towers, a casino building and a parking garage. A representation of a traditional wetu, a domed hut tribal home of Eastern Indian tribes, will frame the main entry.
