Alert May 22, 2012

Update: Massachusetts Gaming Commission Holds Weekly Meeting

On May 22, the Massachusetts Gaming Commission convened another public meeting, which was attended by a member of Goodwin Procter’s Gaming, Gambling & Sweepstakes Practice. This week’s highlights included:

Administration

Executive Director Update

  • The RFP for a search firm charged with finding a permanent Executive Director has still elicited only two responses, possibly because of the short response time.  The Commission debated at length whether it should go forward vetting the two responses or issue another RFP. The Commission voted 3-2 to cancel the current RFP and rebid the solicitation by the end of the week.

Other Hiring Needs

  • The Commission is still reviewing the over 600 applicants for administrative and organizational staff positions and is vetting those applications, but expects several such hires to be made soon.
  • The Commission approved a contract with Karen Schwartzman of Polaris Public Relations.

Racing Commission

Transition Plan

  • Commissioner Cameron noted that on May 20, the responsibilities of the Racing Commission transferred to the Gaming Commission.  The Division of Professional Licensure (“DPL”) will continue to be responsible for administrative matters (including daily operations and management of personnel and finance) until the end of the racing season, while the Gaming Commission will be responsible for adjudicatory functions and policy approvals.

Gaming Consultant/ Legal Consultant

During this part of the meeting, Gaming Consultants Michael & Carroll of Atlantic City, NJ, and Bill Leahy of Anderson & Kreiger joined the Commissioners in the discussion.

Work Plan

  • The Commission voted to approve the work plan/statement of work governing the 16-week process of developing a comprehensive strategic plan for the work of the Commission.  During those 16 weeks the Commission will also begin to implement the plan.  The work plan designates Chairman Crosby or his designee as project manager.  The work plan itself was not discussed.

Bifurcating the Application Process

The Gaming Consultants, Michael & Carroll, talked about the bifurcating the application process for casino developers into an RFQ/RFP process whereby the applicants would first be judged by their qualifications (including backgrounds of board of directors and economic projections for projects) and then by their application proposals.  Applicants would thus already be found qualified before they filed an application.  If an applicant is deemed qualified, it is obliged to inform the Commission of any change in circumstances that might disqualify it.  This would theoretically streamline the process because applicants would be putting together their applications while it was being determined whether they were otherwise qualified.  This process could save time for communities because there would be no referendum until an applicant was already determined to be otherwise qualified.

  • All of the regulations for this RFQ/RFP bifurcated process would be developed during the 16-week process mentioned above, and will likely take most of the summer.
  • Examples of regulations that will have to be designed include the following:
  • Fee structure - The Commission has the authority to set up a fee structure for the application process.  The Gaming Consultants propose that part of the fee would have to be provided by applicants as part of the RFQ process and put into escrow for the remaining RFP process.  If an applicant did not survive the RFQ process, that part of the fee would be non-refundable. 
  • The Category 2 (slots parlor) license will have to be solicited before Category 1, and it is being decided how this will take place.  Some of this decision will turn on what happens regarding the Native American compact license.
  • Commissioner McHugh wondered what would happen if latecomers want to apply after, for example, a main player had been found unqualified in the RFQ process.  Consultant Michael stated that there would have to be a policy decision reflected in the regulations and probably a hard date for applying for the RFQ.
  • Commissioner Stebbins wondered whether if the RFQ results in disqualifications, a candidate could reapply within the window, and Consultant Michael said this was possible.
  • Chairman Crosby expressed concern about staffing given that the Executive Director may not be able to staff the Commission by the time the RFQ is issued. Consultant Carroll stated that the timeline is for RFQ applications to be reviewed beginning in January 2013, which would give the Commission ample time to be staffed.  Commissioner McHugh also noted that the work plan has some provisions to hire some key staff more quickly, and that this needs to be a matter of attention sooner rather than later.

Timing for the RFQ/RFP Regulations

  • The timing for the RFQ will be affected by when the regulations are promulgated, and whether they're promulgated on an emergency basis or not. 
  • Bill Leahy of Anderson & Kreiger noted that the Commission may choose to promulgate either emergency regulations or formal regulations.  For emergency regulations to be promulgated there needs to be public necessity, and if found, Massachusetts law allows for immediate promulgation once regulations are developed.  Those regulations only would be in place for 90 days after which the formal process would need to be implemented.  In the alternative, there is an approximately 75-day process to develop formal regulations, which includes a Notice and Comment period.  Thus, it would likely take until September for regulations to be promulgated on a formal basis.  The consultants thought that the RFQ should not go out before July 31 anyway because of the Native American compact determination, and thus leaned toward promulgating regulations through the formal process. 
  • The consensus presumption is that a formal regulation process will go forward and that the bifurcated RFQ/RFP process will go forward.

Finance/Budget Update

  • Commissioner Zuniga stated that the commitments to the Gaming Consultants and the contract with Polaris Public Relations were approved.

Public Education and Information

Economic Development Forum

Community Mitigation/ Compulsive Gambling Forums

  • The Community Mitigation Forum is scheduled for June 18 in Framingham and will not be combined with the Compulsive Gambling Forum. 
  • There will likely be a half-day forum on compulsive gambling tentatively scheduled for June 25, location TBD.

Other Business

Research

  • Chairman Crosby noted that the Commission needs to address Section 71 of the Gaming Law, which lays out baseline research that the Commission needs to conduct and report to the legislature by November 2013. Commissioner Stebbins wants to break down that Section for the next meeting and discuss what research needs to be done.  This baseline study is necessary so that socioeconomic effects of the Gaming Law on Massachusetts can be studied.  Chairman Crosby thinks that this is an opportunity to do some great research on this topic and make a contribution to the industry. 

A copy of the agenda, full transcript and video archive of the May 22 meeting can be found here. The next meeting is scheduled for Tuesday, May 29, location TBD.  The May 29 meeting agenda will be made available on the Commission’s website.

 

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