Goodwin Gaming
April 9, 2013

Mass. Gaming Commission Discusses IEB Process, Timeline and Other Topics in Weekly Meeting

By Bob Crawford and Eleanor Simon

On April 4, 2013, the Massachusetts Gaming Commission held its 62nd public meeting.  In addition to the discussion on Region C, the commissioners heard from Director Wells on investigations developments, Ombudsman Ziemba on community progress, and Director Durenberger on Racing Division matters.  Highlights from those discussions include the following:

IEB Report – Investigations Progress

  • Director Wells, the Director of the Investigations and Enforcement Bureau (IEB), provided a status report on the Phase 1 application process.  She confirmed that the investigations on all of the applicants are underway and that the IEB is making good progress.  With respect to the Category 2 (slots-parlor) applicants, Director Wells estimated that the investigations into three of the four applicants should be completed by the end of April and the fourth applicant within the first weeks of May.  Therefore, the investigations for Category 2 applicants are proceeding according to schedule.  Once the investigations are complete, the IEB will provide a report on the suitability of the applicants to the Commission.  The Commission will review the recommendations from the IEB at the end of the May and then hold adjudicatory hearings on the suitability of the applicants to make the suitability decisions, which may be appealed.
  • With respect to the Category 1 (resort casino) applicants, Director Wells informed the Commission that it is likely that the investigations into these applicants will not be completed until the end of August, a slightly later completion date than the original mid-June timeline.  The Commission discussed some of the issues with the investigations that are contributing to the delay, including the volume of materials, the complexity of certain applicants (in particular those with foreign individuals or subsidiaries in their organization) and the problems experienced with the redacting process.  The Commission and Director Wells also confirmed that the IEB will release their suitability recommendations for the Category 1 applicants on a rolling basis as completed, which will aid both the Commission and the communities involved.

Public Education and Information – Community Timeline

  • Ombudsman Ziemba provided an update on community progress in the context of revising the timelines for issuing Category 1 and Category 2 licenses.  The current timeline is to issue Category 1 (resort casino) licenses in February of 2014 and to issue the Category 2 (slots-parlor) license in December 2013.  Ombudsman Ziemba discussed revising the timeline with various communities and only a small handful expressed any confidence in being able to complete the required steps (including the execution of a Host Community Agreement and the completion of a referendum) in an abbreviated timeframe.  Ultimately, given the current progress of the communities and the desire of the Commission to provide consistency in their timetable and deadlines, the Commission decided not to revise the Category 1 or Category 2 timelines.
  • The commissioners also briefly discussed whether to revise the current requirement that the IEB and the Commission must make a suitability determination on a particular applicant prior to the holding of a community referendum.  Commissioner McHugh noted several considerations in the argument to keep the rule as is including: (1) the cost of a referendum, (2) voter fatigue in the number of elections that have occurred/will occur in Massachusetts, (3) no final judgments can be made until background checks are completed, and (4) the possibility of misinformation and disinformation injected into the debate with an earlier referendum.  The Commission again decided to leave the rule as is, confirming that there should be no community referendum until a suitability determination.

Racing Division Update

  • Director Durenberger provided the Commission with an update on various Racing Division activities, which included presenting revised legislation on pari-mutuel and simulcast laws and a first quarter review of operations.  In presenting the first quarter review of operations, Director Durenberger discussed both the regulatory and the operational structure of the Racing Division and how the Commission has worked to strengthen both since assuming responsibility for the Commonwealth’s horse racing industry from the State Racing Commission.  Director Durenberger noted that the Racing Division’s purpose with respect to its regulatory structure continues to be to strengthen the existing structure prior to receiving the additional monies expected in connection with expanded gaming.  In this respect, Director Durenberger touched on the five key recommendations the Racing Division received and the progress the division has made: (1) adopt model rules of horse racing: the Division has adopted certain model rules and continues to make progress enacting those rules; (2) upgrade the audit and financial systems to automate data process: the Division has executed a contract to do so and is in the implementation phase; (3) upgrade the licensing system and/or utilize technology to streamline information management: the Division is currently working with Racing Commissioners International as part of a beta-testing program of a web-based licensing system; (4) investing in human resources to enhance the Division’s professional profile: the Division has recruited and continues to recruit several individuals with broad industry and professional experience; and (5) conduct independent audits of the Racing Division: the Division conducted an audit, with a clean outcome, and will continue to schedule periodic audits.  Director Durenberger noted that with respect to the operational structure, the Racing Division is continuing to look at best practices and model rules and is working to resolve technology and network issues that it continues to experience.