At its last meeting of the year the Massachusetts Gaming Commission officially voted to allow the voters of Revere to determine the casino’s fate, with the vote set for February 25. They will also be voting on a new host community agreement with the casino operator. The commission granted a waiver for the December 31 deadline to submit a favorable referendum vote with the license application.
The host community agreement commits the developer to pay Revere as much as $30 million annually, with $33 million up front and another $45 million in infrastructure improvements. They will also pay $1 million for schools and $4 million for public safety and $40 million for infrastructure. They also committed to giving job preferences to Revere residents.
According to Mitchell Etess, chief executive officer of the Mohegan Sun Tribal Gaming Authority, “This agreement formalizes the strong partnership we’ve quickly established with Revere and lays out the many ways the city and its residents will benefit from Mohegan Sun Massachusetts.”
The Mohegan Sun would own and operate the casino on land leased for 99-years from Suffolk Downs, which may continue to offer racing.
Suffolk Downs CEO Chip Tuttle issued the following statement after the commission vote, “For close to 80 years, the city of Revere has been a great partner and host to Suffolk Downs. This campaign will be about affirming the strong support Revere has already shown for a resort casino and the preservation of Thoroughbred racing at Suffolk Downs.”
He added, “Gaming development by Mohegan Sun on the Revere portion of our property gives horse racing its best chance to succeed here. We are committed to racing for years to come should Mohegan Sun earn this license.”
Revere Mayor Dan Rizzo predicted that his city’s voters would support the agreement. “I know that when the citizens of Revere see this new agreement with Mohegan Sun, they will support the project and the opportunities it provides our city in numbers greater than we saw back on November 5.” In that election Revere voted 61-39 for the casino.
The Mohegan Sun’s previous proposal, for a casino in Palmer, lost by 94 votes on November 5, the same day that Suffolk Downs’s proposal for a casino won in Revere but lost in East Boston. This prompted Suffolk Downs to partner with the Mohegans for the Revere-only proposal.
The waiver was opposed by the city of Boston, where voters defeated the Suffolk Downs casino proposal.
“The integrity of the East Boston vote must be respected and maintained,” said a letter from the office of outgoing Mayor Thomas Menino. Incoming Mayor Martin Walsh has hinted at the possibility that the city will sue to try to stop the process from going forward.
Crosby told the Boston Herald that there was “no perfect solution,” to the issue.
The 16,000 plus page plans (compared to 18,000 pages for Wynn and 7,000 for MGM) call for a $1 billion casino resort on 42 acres that Suffolk Downs owns, with 4,000 slot machines, 100 table games, 20 poker tables, and a 300 room hotel with the potential to add another hotel in a second phase. Retail shops, casual and fine dining and other entertainment venues would also be developed, plus a spa, 5,000 square foot greenhouse and 38,000 SF of meeting space. The project would take 30 months to execute from groundbreaking to grand opening.
Mohegan Tribal Chairman Kevin Brown commented, “We hope to make Mohegan Sun Massachusetts the signature project of the Massachusetts gaming industry.”
The Mohegan Sun’s proposal is a smaller scale version of its $2 billion casino resort in Uncasville, Connecticut, which opened 17 years ago. One other difference between that casino resort and the one planned is that for nearly two decades the Sun and its nearby neighbor, Foxwoods, enjoyed a virtual gaming monopoly in New England.
The Sun is still one of the most successful casinos on the planet, with 6,000 slots that gross more than any other casino resort in the Western Hemisphere.
Etess told the Boston Globe, “Putting a deal like that together in a compressed time frame was very challenging and difficult. It’s something you could have taken six months to do. It was done in six days.”
Etess denies accusations from the former supporters of the Sun in Palmer that his company never intended to try very hard for a casino there, and that they just wanted to keep that town out of the hands of any other developers.
Recently Robert Young, spokesman for Palmer Businesses for a Palmer Casino sent a letter to the gaming commission, declaring, “When you look at everything they’ve done, you come away with this absolute feeling that they were never in it to win it.” He added, “They changed the name to Mohegan Sun Massachusetts” from Mohegan Sun Palmer, and “They’ve never put a powerful campaign on to win this vote.”
Some critics of the Mohegans are also unhappy that the tribe is promising twice as much money to Revere as it committed to pay Palmer, although Revere has five times the population of the smaller town.
Young said his group plans to warn the voters of Revere about the Mohegan Sun.
Etess told the Boston Globe, “This talk from people in Palmer that we weren’t really trying or didn’t really care is particularly hurtful because we had invested so much into it. We were shocked at the outcome.”
Meanwhile, the Wynn Resorts’ proposal to build a $1.3 billion casino resort in Everett has cleared the hurdle of the gaming commission’s suitability investigation.
Although Chairman Steve Wynn has had some rocky early encounters with the commission, that doesn’t seem to have prevented the commission’s investigative arm, the Bureau of Investigation and Enforcement, from giving him a clean bill of health for both ethical and financial suitability.
The investigative staff made the recommendation during the regular commission meeting. It came two weeks after the commission ruled that the revised Everett land deal, by which Wynn acquired the 29 acres for his casino, was satisfactory.
It did require proof that Wynn and the landowners have crafted a deal that excluded convicted felon Charles Lightbody from making a profit on the deal. Lightbody, whose interest in the property was once 12.5 percent, was recorded in 2012 bragging to a friend in prison that he would make millions of dollars from the deal. The other partners hid Lightbody’s original interest in the land.
Wynn insisted on a revised deal that lowered the price from $75 million to $35 million, the value of the land before Wynn’s interest caused the value to skyrocket. Lightbody and his partners originally purchased it for $8 million.
The Bureau’s recommendation was conditional, including that Wynn be able to show that his business dealings in Macau, China constitute “responsible business practices.”
Although Wynn’s project hasn’t been voted on yet, the irrepressible gaming mogul didn’t hesitate to give the state advice on how it could amend existing gaming law to make it better—better from his standpoint, anyway.
One suggestion is to change the way the state requires that casinos collect income tax on amounts higher than $600 before the winner leaves the casino, an amount that is much lower than most other states require. States that have had such low thresholds have repealed them because they lose their states money to racetracks and casinos that don’t have such a low threshold.
Although Wynn has survived the gantlet of what many consider to be the commission’s overenthusiastic application of high-minded standards, one who did not, Caesars Entertainment, is suing commission Chairman Stephen Crosby for failing to reveal his former business relationship to one of the partners in the Wynn project.
Caesars was once the partner with Suffolk Downs in a project to build a casino resort in Revere and East Boston. Because of negative recommendations from the commission’s investigators, Suffolk Downs asked Caesars to withdraw its application before the commission had a chance to rule on it. Suffolk Downs has now partnered with the Mohegan Sun and proposes a casino resort for Revere alone.
The lawsuit, using the terms “objectivity and fairness,” claims that Crosby showed favoritism to Wynn, a relationship that Crosby announced several weeks ago when he recused himself from the commission’s ruling on the Everett land deal. Wynn did not recuse himself from the commission’s deliberations on the project as a whole, which will come during 2014.
Crosby, for his part, claims that his participation in the process so far has been “incredibly transparent.”
Now some of the commission’s staff are being accused of running afoul of ethics requirements, with recent disclosures showing that the commission’s top attorney, Commissioner Bruce Stebbins and several others have links to casino applicants.
This caused one gaming expert, Richard McGowan of Boston College, to exclaim, “Circumstantially, it doesn’t look good, I’ll say that much,” and to note that the commission forced Caesars out for simply having contacts with a man accused of Russian mob ties.
Because of the defeat of Foxwoods proposal in Milford, a town of 27,000, in November, Wynn’s only remaining rival for the Boston metro license is the Suffolk Downs/Mohegan Sun $1.3 billion proposal for Revere, which is two miles from Everett, and next door to Boston.
Western Massachusetts
The last man standing in the western part of the state is MGM Resorts and its proposal for an $850 million casino resort on 14.5 acres in Springfield’s South End. The gaming commission December 23 gave MGM a positive determination for its ethical and financial suitability to operate a casino.
The ruling does not guarantee that the commission will approve of the project, however it moves the proposal further along.
MGM Chairman James Murren hailed the ruling, “Our approach from the start of this rigorous process has been to be as forthright and thorough as possible in order to showcase our company’s incredible global work ethic and high standards.”
When MGM later submitted its application Murren said, “We have worked hard to develop the strong relationships necessary to create a world-class urban casino-resort proposal that will anchor a renaissance for an important Gateway City and the region around it.” He added, “Our application demonstrates our ability to do so, as it delivers on the criteria set out by the Massachusetts Gaming Commission, as well as all the transformative issues that make MGM Springfield the catalyst needed to rebuild an urban core.”
The commission said that the company satisfactorily addressed its concerns about several issues, one of them being a case where a former board member convicted of wire-tapping continued to advise the company after leaving the board. The investigators also raised concerns about MGM’s business dealings in Macau, especially its relationship with an investor whose father has been linked to Chinese organized crime.
The MGM proposal is popular in Springfield, where it was approved 58 to 42 percent and where Brent Bertelli, a local greenhouse owner, quoted by the Republican, commented last week, “MGM is a world-class company and they are a perfect fit for this neighborhood. I grew up here in the South End so there are a lot of heartstrings for me in this neighborhood. The June 2011 tornado was seen as the final nail in the coffin for the neighborhood, and I think MGM is the chance of hope.”
Nevertheless, there are discouraging voices from those who believe the casino may have a negative impact on existing businesses. One owner of such a business said last week, “At a casino, you have a different clientele, especially when it comes to retail and dining. Either you have people looking for a buffet, or a high-end restaurant. I just don’t know how these little businesses will fare alongside a huge place like what they’re proposing.”
Slots Parlor
Three companies are vying for the single slots parlor license: Penn National Gaming, which proposes a casino in Plainville at Plainridge Racecourse, Raynham Park, which proposes to convert its now defunct dog racing track into a 175,000 square foot slots parlor and the Cordish Companies, which propose a casino in Leominster.
The commission is expected to award a license in the next few months. It is possible that a slots parlor could be open by the end of the year. Raynham Park says it can open a temporary casino within six months of getting a license.
Repeal the Law
Meanwhile the state attorney general, Martha Coakley, is urging the Supreme Judicial Court to rule on the legality of a ballot initiative that would repeal the gaming expansion act.
Coakley ruled in September that the initiative, if passed, would violate the contractual rights of casino operators, and thus was unconstitutional. Proponents appealed. The high court is expected to rule this spring.
Matthew Cameron, who represents the group pushing the initiative, told the Boston Herald, “It’s an open question. I think, honestly, that the smartest thing would be an injunction on casino development if it clears the SJC. I think the industry’s going to be pretty scared if they see that’s going on the ballot.”
Mayor Dan Rizzo of Revere, whose voters strongly supported a casino in November, thinks the effort to repeal the law is much too late.
“That horse left the barn back in November 2011, expanded gaming is allowed here in the state,” he told the Herald last week. “Now, it’s not good enough for them that they’re not going to have a casino in East Boston. It’s really become a huge distraction to what the state’s trying to do, and that’s create jobs and hundreds of millions of dollars in enhancements.”
The same people pushing the initiative, who include those who successfully defeated casino proposals in Palmer and East Boston, plan to join forces with opponents in Revere to try to defeat that proposal on February 25.
Celeste Myers, who leads No Eastie Casino, told the Herald, “We have pledged our support to the opposition in Revere.” That group, Don’t Gamble on Revere, asked for Myers’s help.
