Alert June 05, 2012

Update: Massachusetts Gaming Commission Holds Weekly Meeting

On June 5, the Massachusetts Gaming Commission convened another public meeting, which was attended by members of Goodwin Procter’s Gaming, Gambling & Sweepstakes Practice.  This week’s highlights included:

Executive Director

  • The Commission is still seeking an executive search firm to recruit, screen and recommend qualified candidates for the role of Executive Director.  The deadline set in the Commission’s RFR for bids was June 13.  Commissioner Zuniga reported that there seems to be more interest this time around.  The Commission noted that the salary for this position should be market-competitive.  Chairman Crosby emphasized that the search firm need not be compensated based on a contingency fee and that firms should include in their bids the manner in which they think they should be compensated.

Internal Policies

  • Commissioner Zuniga presented his research on internal policies for the Commission.  He looked to handbooks from other agencies and material provided by the Attorney General’s office to provide a template.  He indicated that the examples he reviewed could be easily adapted to the needs of the Commission.  Chairman Crosby and Commissioner McHugh agreed that it would be best for Commissioner Zuniga to draft a handbook based on material from other agencies and to identify areas that require further discussion of the Commission.  Chairman Crosby noted that the handbook from the Massachusetts Technology Collaborative had been particularly recommended as a model.

Financial Disclosures

  • Commissioner McHugh discussed the need for disclosing any potential financial conflicts of interest as required by G.L. c. 268A, § 6.  State employees and special state employees (such as outside counsel Anderson & Krieger) must submit disclosure forms to their appointing authorities.  While Commissioner McHugh suggested that Chairman Crosby make the determination on whether a conflict exists, Chairman Crosby and the rest of the Commission agreed that Commissioner McHugh, with his legal background, would be the best person to make that determination.  It was agreed, however, that the more contentious determinations would be brought to the Commission’s attention.   Each commissioner will also be filling out the disclosures.

Employee Background Checks

  • Commissioner Cameron presented her research into required background checks for Commission employees.  She stated that while most states do not require drug testing and fingerprinting as a condition of employment, it is not unheard of.  Chairman Crosby thought it would be a good idea to require both of these in the background check.  The rest of the Commission agreed that it sets the right tone for a new agency, unanimously approving the proposal.

Racetrack Regulations

  • Commissioners Cameron and McHugh updated the Commission on the status of the racetrack regulations.  Currently, there are emergency regulations in place which are substantially the same as the regulations that governed the racetracks prior to the Commission taking responsibility on May 21.  However, emergency regulations may only stay in effect for 90 days.  So, the Commission has started the process to put in place by the August 17 deadline permanent regulations to govern for the rest of this year.  The proposed regulation may be found in the Commissioner’s Packet.  The first phase in the process is submitting the proposed regulation to the Local Government Advisory Commission, which is designed to help the Governor and local governments assess the proposed changes.  The commissioners all agreed that Commissioner Cameron should move forward with this step.
  • Commissioner Cameron also updated the Commission on the work of the racing consultant.  The consultant, Ann Allman, is in the process of interviewing many of the employees at the racetracks.  The Commission has decided to keep the regulations governing the tracks the same for this season but in the future is open to adjustment of the regulations as needed to reflect Ms. Altman’s findings as to best practices.

Casino Licensing Process

  • The gaming consultants from Spectrum Gaming and Michael & Carroll gave an update on their progress in identifying gaming regulations from other states that will be useful in creating the Commission’s regulations.  In addition, the consultants are moving forward with adjusting staffing requirements and identifying best practices.
  • The consultants noted that closing in on the exact timing of “Phase I” of the request for applications process (“RFA”) (the Commission had formerly discussed this phase as a “request for qualifications”) is their top priority.  This would be the first phase of the bifurcated licensing process the Commission has discussed over the past few weeks.  The phases will now be termed RFA Phase I and RFA Phase II.  Phase I will cover prequalification of proposals (including background checks of proposed operators), and Phase II will involve the full proposal. 
  • Chairman Crosby was authorized to send out a notice of proposed rulemaking regarding promulgation of regulations for Phase I for public comment.  It was made clear that the purpose in doing so is not to begin the formal comment period required to promulgate a regulation, but merely an invitation to provide comments to guide the Commission as it prepares the regulations.  The proposed notice may be found in this week’s Commissioner’s Packet.  Commissioner Zuniga questioned whether they should allow time at one of the regular business meetings for the public to make oral comments, but the other commissioners seemed visibly opposed to the idea.  They agreed to set this informal comment period at four weeks.  The commissioners also universally agreed that those providing comments should be required to include contact information.
  • Later during the meeting, after the consultants had left, Commissioner McHugh raised the problem of what happens once a license has been granted.  There are many different permits such as transportation, health and environmental that must be assembled before construction may actually start.  Commissioner McHugh wondered when this should all happen.  He was worried about the potential consequences of a locality voting in support of a proposal that is later changed due to permitting issues.  The Commission decided that the consultants likely have experience with this and should weigh in.

Public Education

  • The Commission has three forums planned for the second half of June:
    • Economic Development Forum on June 14 at Quinsigamond Community College
    • Community Mitigation Forum on June 18 in Framingham.
    • Compulsive Gambling Forum on June 25 at North Shore Community College.
  • Commissioners Zuniga and Stebbins attended a compulsive gambling meeting hosted by the Massachusetts Council on Compulsive Gambling on June 1.  They reported that it was a very powerful meeting and that compulsive gambling is a problem in some segment of the population.  However, they said the attitude at the meeting was not focused on preventing gambling in Massachusetts, but on recognizing that it is here and how to limit the destructive aspects of it.  In fact, the Commissioners noted that some of these meetings are actually sponsored by those who may ultimately submit bids for a Massachusetts casino license.  Commissioners Zuniga and Stebbins acquired their contact information in order to fill out the necessary disclosures.
  • The Commission discussed whether it should actively participate in the Council, or just listen.  They agreed that the latter was the better approach.  Inclusion of a compulsive gambling section in the casino licenses was mentioned but it decided to table that discussion for later.  There was also talk of perhaps requiring future licensees to undergo certification in compulsive gambling issues.

Communications and Outreach

  • Director of Communications and Outreach Elaine Driscoll reported to the Commission on what she has been doing in her first week on the job (she was formerly the communications director for the Boston Police Department).  She conducted an audit of the Commission website and is looking at ways to make it more user friendly while being attentive to cost.  She is also working on creating a Commission calendar with big events and speaking engagements, starting a blog and putting together a sheet of accomplishments.  Ms. Driscoll has also worked hard to quickly introduce the Commission to social media.  She has already set up profiles with Facebook, YouTubeTwitter and Instagram.  She even shocked the Commission by informing them that she had been “live tweeting” during the current meeting. 
  • Chairman Crosby raised the issue of the Commission’s slow response time to problems.  He specifically noted that the Commission could not provide fast response to criticism from Rep. Joseph Wagner (D-Chicopee), an author of the casino bill, in the wake of Chairman Crosby’s public comments that the Commission could determine that having three resort casinos is not in the Commonwealth’s financial interest.  They acknowledged that there was little they could do because of the open meeting rules.  However, the commissioners and Ms. Driscoll will work to find solutions as well as inform the media of their constraints.

Project Management

  • Commissioner Zuniga raised the issue of finding someone to oversee project management until there is an Executive Director.  He offered several suggestions, the most popular being hiring a firm or soliciting resumes from a temp agency.  The discussion was relatively unclear as the commissioners did not really seem to know what they want this person to do, or how long they want him or her to do it.  There was confusion as to whether they would be hiring this person just for the 16-week plan created by the consultants (and which is already well into week two) or for the 18-month comprehensive plan.  While they need someone who can do the work, they also do not want to tie the hands of the future Executive Director who might want to select his or her own candidate for the position.  The Commission decided to leave the decision to Commissioner Zuniga, who will pursue both the firm and the temp agency routes and will report back to the Commission with recommendations as to best game plan.

Political Contributions

  • Chairman Crosby brought up the issue of political contributions by applicants.  The Office of Political and Campaign Finance has issued a notice of proposed rulemaking stating that it will be rewriting the rules that require local towns to post to their town websites any contributions to local politicians to encompass a requirement that potential casino licensees’ contributions be publicly posted. Commissioners Stebbins and McHugh have met with the Office’s chief counsel and will be hearing back from the chief counsel when there is a proposed regulation to share with the Commission.  Chairman Crosby received a press call last week asking whether the Commission intends to pass a regulation requiring them to post on the Commission website a list of potential licensees who have donated to local politicians.  Commissioner McHugh pointed out that the issue is premature at this point as there are no applicants and won’t be until the Commission has regulations as to the bidding process in place.  But the Commission seemed open to the idea of posting such campaign finance information once it gets further along in the process.

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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.