May 8, 2012

Update: Massachusetts Gaming Commission Holds Weekly Meeting

On May 8, the Massachusetts Gaming Commission held another of its now routine public meetings, which was attended by a member of Goodwin Procter’s Gaming, Gambling & Sweepstakes Practice. With more of the preliminary administrative tasks completed, the Commission began to turn to more substantive issues, such as initial questions to consider in the RFP process for gaming licenses. This week’s major meeting highlights were as follows:

  • RFPs for a search firm charged with finding a permanent Executive Director are due this Friday, May 11. Commissioner Zuniga said he had yet to receive any applications for the role, but that applicants traditionally wait until the deadline date to throw their hat in the ring. Commissioner Zuniga has met with representatives of the AG’s, Governor’s and Treasurer’s offices to discuss criteria for selecting a search firm and expects to have the firm in place by the end of May. Chairman Crosby noted that the search firm will not cast a wide net in its search for a permanent Executive Director, but will also have a list of potential candidates from the Commission.

    Acting Executive Director Stan McGee was present at the meeting. Mr. McGee, whose appointment was not without controversy, began his work with the Commission this past Monday.
  • Boston Police spokeswoman Elaine Driscoll will be moving into the role of permanent public information officer on May 29 (she replaces consultant Karen Schwartzman, who filled the role temporarily as the Commission was getting up and running).
  • Both gaming consulting groups (Michael & Carroll and Spectrum Gaming) have cleared the background check process, as has outside counsel Anderson & Krieger LLP.
  • Anderson & Krieger is making fast progress on draft guidance for the Gaming Act, which includes appendices outlining (i) the various funds the Commission is to oversee, (ii) the Commission’s advisory board functions, and (iii) the regulations the Commission needs to promulgate to carry out its mandate under the Gaming Act (this falls under the “policy on policies” document the firm is also working up).

    Anderson & Krieger will also be taking the lead in drafting the various implementing regulations the Commission will need in order to carry out its mandate under the Gaming Act. So as not to reinvent the wheel, the Commission will look to other gaming commissions nationwide as well as other governmental departments within the Commonwealth to borrow appropriate regulations and policies.

    The outside law firm will also assist the Commission in drafting emergency regulations to facilitate an on-time transition to control of the Racing Commission by the May 21 deadline.
  • The May 3 public information and education forum was deemed a resounding success, with more to follow shortly. The next forum will be on June 14 at Quinsigamond Community College. It will cover issues pertaining to what the Commission can take from existing gaming studies and reports and untapped resources and tools to assess license applications. Commissioner Stebbins is also exploring the possibility of having a panel examine ways to maximize the economic potential of casinos for the Commonwealth.

    Chairman Crosby is coordinating a subsequent forum on the mitigation of adverse impact on local communities and problem gambling. He has been working with the Metropolitan Area Planning Counsel (MAPC) on these issues and has also reached out to the Massachusetts Municipal Personnel Association (MMPA). Chairman Crosby has asked Kathleen Scanlan, of the Massachusetts Council on Compulsive Gambling, to moderate the problem gambling panel at the proposed forum.
  • Commissioner McHugh discussed creating a set practice for responding to questions coming into the Commission from local communities and citizens. Thus far, Commission McHugh has been responding to easily answered questions as they come in. Moving forward, the Commission agreed it should log all questions and raise gray area issues at each meeting, so it can respond to all questions in a timely manner. Commissioner Stebbins advocated for posting questions and answers to the Commission website so that all can benefit from the information being shared in response to submitted inquiries. Springfield and Palmer were mentioned as two communities that have already submitted questions to the Commission.

    The Commission is also working with MAPC on best practices for dealing with host and surrounding communities. Chairman Crosby noted that the Commission has some latitude in defining “surrounding communities” and will need to think about how best to draw boundaries.
  • Commission Cameron has been working with the State Racing Commission to take over its responsibilities by the May 21 deadline. The Commission will be enacting emergency regulations to continue the status quo under the current racing regulations at least for the next racing season. Payments out of the Racing Fund will be distributed within the next few weeks.

    In response to its RFP for a racing consultant, the Commission received one “comprehensive” proposal from Annie Allman of Last Frontier, which the Commission voted unanimously to accept. Ms. Allman will be subcontracting Spectrum Gaming to assist in data analysis for her comprehensive review of racing in the Commonwealth. She will also be working on a “holistic overhaul” of racing looking at all key stakeholders.
  • Despite online gaming and Indian gaming both making the agenda, yet again, the Commission did not spend long on these topics.  The Treasurer’s Online Products Task Force will meet on May 14. Chairman Crosby will attend this first meeting to advocate for Commission involvement on the front end of the process and a holistic approach to prevent turf wars later. Commissioner Zuniga will work with the task force at future meetings.
  • As for tribal gaming issues, Commissioner McHugh noted that the First Circuit will hear oral argument on the KG Urban appeal in June, which is as soon as one could have hoped for. KG Urban is appealing the dismissal of its suit challenging the provision of giving a federally recognized tribe first crack at the southeastern region’s sole resort casino license.
  • The real meat of the meeting focused on starting a concrete RFP process for the gaming licenses. Guy Michael of Michael & Carroll had proposed a bifurcated process. The first step would be a Request for Qualifications (RFQ). Michael & Carroll propose that the Commission use standard individual and corporate background check applications as the starting point to vet candidates for qualification before they spend time and money submitting their gaming license proposal. The Commission would then tailor the process from there as it sees fit.

    Chairman Crosby noted that a bifurcated process would be a positive gesture towards accommodating those calling for speed in the licensing process. The main concern the Chairman voiced was whether having a hard deadline for RFQs would cut off competition. Noting the recent developments with Wynn’s Foxboro courtship, Chairman Crosby said he did not want the process to foreclose the possibility that new players might emerge in response to late breaking developments. The Commissioners agreed that any RFQ process should include a procedure for reopening the request for background check applications should the commissioners find the pool of license contenders scant.

    The commissioners also highlighted the benefits of a bifurcated process for both applicants and local communities: an early RFQ process would allow both sides of local negotiations to wait to expend considerable resources until after they were assured the prospective casino operator had cleared the RFQ process. Mr. Michael noted that there have been examples of companies passing the background check process in one state but not in another, citing Caesar’s as a notable example.

    The Commission would like to be able to send out RFQs as soon as possible and have asked Mr. Michael to return to the Commission two weeks’ time with a concrete RFP plan. Commissioners spoke of posting the RFQs as early as June.
  • The transition process for charitable gaming oversight continues to move forward smoothly. Commissioner McHugh has met with State Lottery staff and the Attorney General’s office to discuss key issues. Commissioner McHugh envisions no problems meeting the July 31 hand-off deadline. Following up on agreement that the Commission should start using meetings to bring in pertinent players to advise the group on key issues, Commissioner McHugh plans to bring in State Lottery staff to address the group.
  • The Office of Campaign and Political Finance (OCPF) is looking into promulgating regulations as to applicants for gaming licenses. The Commission indicated its intent to be heard as part of that process. A key issue in drafting regulations is drawing a clear line defining when an entity becomes an “applicant.” Commissioner McHugh will take the lead in liaising with the OCPF.

    Next week’s meeting will be back at the Convention Center, with the Commission planning to eventually regularize meeting place and time (1:00 p.m. on Tuesdays at the Division of Insurance).

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Those interested in learning more about Goodwin Procter’s gaming and gambling expertise and practice, and those interested learning more about the issues outlined above, should contact David Apfel or Bob Crawford, co-chairs of Goodwin Procter’s Gaming, Gambling & Sweepstakes Practice.