Steve Wynn and the city of Everett were the winners in the contest for the license for the Boston Metro casino zone, with Suffolk Downs and the Mohegan Tribe as definite losers, and with the city of Boston as a potential loser, at least in the mind of its mayor, Martin Walsh.
The casino resort could open as soon as late 2017, according to a spokesman for the company.
The Massachusetts Gaming Commission awarded the license to Wynn—technically Wynn MA LLC— for its proposed $1.6 billion casino resort proposal with a 3-1 vote. Whether any more casinos are built in the state ultimately depends on the fate of the November 4 ballot measure, Question 3, which would ban casinos.
Three commissioners, Gayle Cameron, Bruce Stebbins, and Enrique Zuniga, cited Wynn’s financial strength and estimated that it would have the most positive economic benefits for the region. Some commissioners were impressed by Wynn’s plans to attract high rollers and to take advantage of Boston’s reputation as a tourist Mecca. The Mohegan’s plans, on the other hand, were seen as less ambitious ($1.1 billion instead of $1.6 billion) and more inclined to draw on local patrons so as not to ding its existing customer base in Connecticut. Wynn also promised more jobs, 3,287, compared to 2,500 for the Mohegans, and promised to pay workers salaries a third higher than his rival’s. Wynn’s construction labor costs would be $621 million compared to $293 million for the Mohegans.
Commission Chairman James McHugh told reporters, “This has been a really, really difficult decision. The two were very close together. The Wynn applicant had the edge in the economic benefits that it would provide to the community and the region.”
The Mohegans had bristled at Commission Zuniga’s contention that it needed to obtain $100 million more in equity in order to have enough funds to build. “The notion that MSM only has $45 million available to initiate development is not true. We will have several months to get the financing in place and will have the $732 million in financing quickly, which we can then deploy.” But apparently that argument was not persuasive enough.
The one commissioner who voted for the Mohegan Sun, James McHugh, acting chairman of the commission, worried that Wynn might be delayed or even stalled by the problems associated with cleaning up the hazardous chemicals left behind by the former Monsanto chemical plant on the site adjacent to the Mystic River and by traffic issues. “Those concerns are still with me,” he said shortly after the vote.
At first, Wynn resisted the commission’s criticisms of the design for his 27-story casino tower, which was various described by commissioners as “uninspired,” “stale,” and “atrocious.” This prompted Wynn to respond, “There is no doubt that a glass curtain wall allowing for floor to ceiling wall to wall glass that looks upon the Mystic River and the Boston skyline is the most attractive solution for the guest experience.”
In the end, though Wynn, submitted to the commission’s “suggestions,” promising to
submit alternative designs to the commission, just as he submitted a revamped traffic plan for Sullivan Square in Charlestown. Previous to being granted the license, Wynn had upped the ante on the traffic issue from $46 million to $76 million. He dug in his heels at the suggestion that his company should be fined if certain mass transit targets were not reached.
Wynn Vice President Kim Sinatra had told the commission, “Frankly, it is not in our interest to invest $1.6 billion and be left with a transportation surrounding that does not work.”
Everett Mayor Carlo DeMaria greeted the news ecstatically: “They did choose the right city and the right applicant. Frankly, it’s the right time for Everett.” He added, “People got what they wanted. Imagine being a taxpayer in Massachusetts and getting what you wanted. Government worked today and I thank the commission.”
Wynn Senior Vice President Robert DeSalvio said, “This is a great opportunity to cleanup that site that has been sitting for so long and we hope that our project will just be the start of economic development as part of the Lower Broadway Plan.”
Mohegan Sun Tribal Gaming Authority CEO Mitchell Etess criticized the decision, “We are extremely disappointed in today’s decision. Mohegan Sun has worked incredibly hard to develop a comprehensive proposal that will deliver the most economic development and revenue for the commonwealth.” He added, “We have worked cooperatively with our thirteen host and surrounding communities, met or exceeded all of the commission’s conditions and believe we are the best choice for the commonwealth’s flagship casino.”
Mohegan Tribal Chairman Kevin P. Brown, while expressing disappointment at the end of the tribe’s three-year effort, sounded optimistic about the tribe’s prospects. “Mohegan Sun continues to be one of the most successful casinos in the Western Hemisphere, and we will move forward to expand and diversify our business,” he said.
Although the 2011 Gaming Expansion law was envisioned by many lawmakers as a way of preserving horseracing in the Bay State, 80-year-old Suffolk Downs announced shortly after the decision that it will close by the end of the year, with racing operations ending September 29, with an estimated loss of 1,000 jobs.
The track’s CEO Chip Tuttle reacted to the loss: “We are extraordinarily disappointed, as this action is likely to cost the commonwealth thousands of jobs, small business and family farms. We will be meeting with employees and horsemen over the next several days to talk about how we wind down racing operations as a 79-year legacy of Thoroughbred racing in Massachusetts will be coming to an end, resulting in unemployment and uncertainty for many hardworking people.”
The racetrack has not operated in the black for seven years and the owners claim to have lost up to $60 million keeping it open. However, the 160 acres is “a very attractive” property, according to Tuttle, strategically located near Boston’s airport and mass transit options.
Tuttle added, “We’re focused on supporting our workers through this transition. We’re focused on turning the page. We’ve been at this a long time, and we don’t want to create any false sense of hope. We’re dealing with some very devastated people here.”
He accused the commission of failing to take into account the “human costs” of its decision.
Dan Rizzo, mayor of Revere, declared, “It’s going to be a major loss to my city to have a second track close in the last five years.” The Wonderland Dog Track closed four years ago after voters banned the practice of dog racing.
The commission has promised to look at the ramifications of its decision, the end of thoroughbred horse racing in the state. Acting Commission Chairman McHugh said after the vote, “We understand the tradition. We understand the good people that work there and their loss. We’re going to work hard to figure out what the most appropriate solution is.”
The commission has required Wynn to give a hiring preference to Suffolk Down workers should the racetrack close.
Not just Suffolk Downs, but the entire North Shore business community was looking forward to the economic development they hoped the casino resort would generate for them.
Gary Barrett, executive director of North Shore Alliance for Economic Development, based in Salem, told the Salem News, “I was surprised. I think the whole process has been somewhat surprising from a North Shore business perspective.”
North Shore Chamber of Commerce President Robert Bradford added, “It’s a sad day
for the North Shore.
Barrett added, “We’ve not heard one single, solitary word from the Wynn folks for opportunities for North Shore vendors or anything of the sort.”
Other North Shore business leaders said they hoped that Wynn would reach out to them.
Boston Mayor Martin J. Walsh reacted to the news by calling the decision “unacceptable,” and illegal. He demanded that Governor Deval Patrick and other state officials who appointed the commissioners to intervene. “I think we need intervention from the people who appointed them,” said Walsh. “They’ve clearly gone beyond their duty.”
The mayor left open negotiations, a lawsuit, just about anything. “Everything is on the table at this point, and we have never closed the door to engaging in discussions with Wynn.” Everett is 4.5 miles north of Boston.
A major bone of contention between Walsh and Wynn has been the traffic that will be funneled into East Boston’s Sullivan Square, which is already considered highly congested. “Serious questions remain around Sullivan Square and Rutherford Ave, and other impacts in Charlestown, as well as other neighborhoods in the City of Boston,” said the mayor in a statement.
The mayor has left open the possibility of suing Wynn or the commission or both to try to get the kind of deal that it wants with Wynn. So far negotiations between Wynn and the city have produced nothing.
Repeal The Casino
Now that three of the four licenses have been awarded for casinos in Massachusetts, opponents of gaming in the Bay State are calling on lawmakers and casino executives to participate in a series of debates in between now and November 4.
John Ribeiro, chairman of Repeal the Casino Deal, urged Wynn Resorts, MGM Resorts, Penn National Gaming, House Speaker Robert DeLeo and Senate President Stanley Rosenberg to participate as pro-casino spokesmen.
Most political odds-makers still give the edge to the no voters in this contest. Currently three communities, West Springfield, Palmer, East Boston and Milford have rejected casinos, while Springfield, Revere and Everett have approved them. This helped jump-start the statewide casino repeal effort, with the groups who organized the victorious no-votes coalescing into one organization.
Initially it looked as though the Repeal campaign had nearly an even chance of prevailing. In March a WBUR poll showed 46 percent supporting casinos compared to 43 percent again. But more recent polling shows pro-casino opinions at 59 percent, compared to 36 percent against. The most current WBUR poll indicated 52 percent for retaining casinos and 36 percent for the repeal.
Political analysts say several factors are at work. A very small percentage of the voters are undecided on casinos.
Those who oppose casinos for their own communities will not necessarily oppose them statewide. Governor Deval Patrick, who supported the casino law, has said he would vote no if one were proposed for his hometown, but that is part of the not-in-my-backyard (NIMBY) complex.
This means that for Question 3 to succeed, it will have to win on an appeal to a moral argument.
At the same time voters tend to vote for the status quo, and the status quo is now that casinos will be built.
Research shows that dollars spent on “no” votes (in this case votes that would not repeal casinos) are more effective than money spent on “yes votes.” And the “no” forces are by far better financed than the “yes” campaign. Moreover, Massachusetts law sets no limit for spending on initiatives.
Most of the money to defeat Repeal comes from large donors, mainly from two casino developers, Penn National, which has contributed $1.27 million and MGM Resorts International, which has donated $500,000. Pro-repeal has 40 times as many donors, according to Wicked Local, but their donations are much smaller.
MGM Springfield President Michael Mathis this week issued a statement that said, “MGM Springfield will maximize every opportunity to move forward with the most innovative destination resort casino project in the country. We do this while some are trying to slow progress and thwart a once-in-a-lifetime opportunity for Springfield. MGM Springfield remains focused on developing the things that are important to the people we talk to: good jobs, business opportunities and community partnerships.”
So far, Wynn Resorts has declined to join the funding effort. Robert DeSalvio, commenting shortly after the Massachusetts Gaming Commission awarded the Boston Metro license to Wynn, commented, “We have always said that it is up to the citizens of Massachusetts to make that decision come November. Whether or not we get involved at a later date, we really haven’t come to that conclusion.”
Ribeiro is not surprised by the donation discrepancy. “We’ve always known this will be a David vs. Goliath battle, and David is still standing,” he said last week. “We’re confident we’ll have the resources needed for victory in November.”
Meanwhile the Bay State’s top Roman Catholic prelates, the bishops of Boston, Worcester, Springfield and Fall River, speaking through the Massachusetts Catholic Conference endorsed Repeal the Casino Deal’s campaign, publishing a statement that emphasized that gambling as a legitimate form of entertainment when done in moderation,” but adding, “expanded gaming in the Commonwealth opens the door to a new form of predatory gaming.”
“The gambling industry threatens local businesses, weakens the moral fabric of society, and fundamentally alters communities for decades to come. Three destination resort casinos and a ‘slots’ parlor will saturate the entire state, diminishing our rich heritage and history,” said the statement. Not to mention it decimates church-sponsored bingo nights.
James Driscoll, executive director of the conference, added, “Proponents are making the argument that if it’s not going to solve all the economic problems in the state, it’s going to go along way toward doing that. And we just want to point out the reality that casinos now have peaked and they’re starting to slide in revenue. Just in 2014 alone, five out of the 12 casinos in Atlantic City look like they’re going to close.”
Although the bishops issued the joint statement, they don’t plan to do anything more coordinated.
Ribeiro was happy to get the bishops’ support, saying “This support from the Roman Catholic Bishops, on top of support from a number of faith groups, elected leaders like Senator Elizabeth Warren and Congressman Stephen Lynch, bipartisan grassroots support and more shows the wide-ranging and growing support for casino repeal.”
The pro-casino Committee to Protect Massachusetts Jobs responded, “We respect the bishops’ opinion; however, we believe that casino gaming, thoughtfully introduced, in the way this plan does, recaptures much of the almost $1 billion that Massachusetts residents spend each year at gaming facilities in other New England states and in the process creates much-needed jobs for communities such as Springfield.”
Outgoing Governor Deval Patrick, a consistent supporter of casinos in the Bay State, last week declined to state what advice he would give his successor if Question 3 passes.
“Don’t ask me about hypotheticals. I am not going to be the governor. I know the work and thought and care that went into developing this piece of legislation, and the work and thought and care that has gone into implementing it,” he said to reporters.
The high interest in the casino question could improve turnout at the polls in November, according to Massachusetts Secret
ary of State William Galvin. “I’m pretty confident November will be a good turnout,” he said, according to the Boston Globe.
