Alert June 12, 2012

Update: Massachusetts Gaming Commission Holds Weekly Meeting

On June 12, the Massachusetts Gaming Commission convened another public meeting. The meeting’s highlights included:

Administration

Hiring Needs

  • The commissioners entertained the idea of hiring a local law student to work in a co-op capacity to help the Commission interpret regulations by which it must abide and to review and proofread their own draft regulations.
  • Commissioner Zuniga recommended that the Commission familiarize itself with project management technology tools. He has begun working with Microsoft Project to begin drafting a broad schedule of the major milestones on the horizon for the Commission. He noted that the Commission needs to decide what project management software it plans to utilize before it can hire a temporary project manager.
Internal Policies
  • Commissioner Cameron recommended the Commission adopt a tiered background check system, wherein lower-level employees such as receptionists and administrative personnel do not undergo as rigorous a background check as high-level employees. The less rigorous check will not involve spouse information, professional licenses and the like, but it will still be comprehensive.
  • The Commission will rely on the State Police to deliver the results of the pre-employment drug tests. Any individual with a positive test result will not be hired.
  • Commissioner Zuniga is drafting an employment manual that covers employment and workplace policies. He has written two chapters so far, which largely draw from other government departments’ policies.
  • The Commission decided to run all speaking engagement invitations by its Director of Media before accepting to avoid any potential ethical abuses.

Gaming Consultant / Legal Consultant Update

  • Michael & Carroll and Spectrum Gaming began to review and document anti-money-laundering provisions as well as other federal regulations with which the Commission must comply.
  • Kathleen O’Toole spoke on behalf of Spectrum Gaming and Michael & Carroll. She indicated that they have begun to create a draft of the RFA Phase I process. Ms. O’Toole said she hopes the consultants’ draft of the RFA I process will be completed by early July. The Commission will then take about three weeks to review the draft, looking to finalize the draft by the end of July. At that time, the formal notice and comment period will begin, which requires a 21-day notice period followed by the hearing process. Ms. O’Toole and Commissioner McHugh anticipate that, best case scenario, the hearing process will extend through September or October. It will take longer if any member of the public has a substantive change, but the Commission hopes that major changes will occur as a result of the currently ongoing informal comment process rather than through the formal process.
  • Chairman Crosby noted that the Commission plans to ask the bidders to supply the $400,000 application fee at the beginning of the RFA Phase I, which will likely be in  mid-autumn. At the point when bidders pay the fee, they will officially become applicants. Thus, while the bifurcated process might save towns from spending vast sums of money negotiating with entities that might not pass the RFA I process, potential applicants do not save themselves the licensing fee under this proposed process.

Racing Commission

  • The Commission’s racing consultant Ann Allman has been conducting a review of racing procedures in the Commonwealth and comparing those procedures with best practices from other jurisdictions. Commissioner Cameron hopes to make recommendations to the Commission about any changes that may be necessary –in terms of timeline, budget, etc. – at some point during the coming racing season.
  • The first Racing Division meeting will be held in the Insurance Building on June 21. At the meeting, Commissioner Cameron will hear appeals that have been submitted since the State Racing Commission was disbanded as well as address pending track matters.
  • The Commission will visit Plainridge racing track (a potential contender for the slots parlor license, according to media accounts) on the afternoon of June 21.

Funding

  •  The Commission needs to review the Racing Development Trust Fund – into which the taxes from all racing operations in the state flow – in the near future to ensure that it has enough money to cover all operating expenses through fiscal year 2013. The coming fiscal year will see the disappearance of a line item in the legislative budget for the racing division, which places the fiscal burden of operating the division solely on the Trust. Gray Holmes, CFO for the Office of Consumer Affairs, explained the options available to the Commission in response to this change. The Commission ultimately decided to explore two options – asking the legislature to change the language in the statute to allow the Gaming Commission to fund operating costs of the Racing Division directly and retaining Anderson & Kreiger to analyze whether the statute allows the Commission to employ another funding structure.
  • The Commission appointed Commissioner Cameron to make the Racing Division’s financial decisions on behalf of the Commission, report back to the Commission on the general tide of her progress and obtain advance approval from the Commission on issues she deems subject to such approval.

Project Work Plan

  • Chairman Crosby noted that the Governor’s office has drafted a process by which it will handle instances wherein a developer, bidder or potential applicant makes a request to meet with a state agency. The Commission plans to publicize the process in the next week or two. Chairman Crosby alluded that the formal process will apply to potential applicants as soon as they pay the $400,000 application fee.
  • The informal comment period on the RFA Phase I process is underway and will be open for about a month. Anyone interested in submitting a comment to the Commission can send an email entitled “Bifurcation Process” to mgccomments@ma.us.gov. The Commission would particularly like to know if anyone has suggestions on how to expedite the process.  

Technical Assistance to Communities

  • Commissioner McHugh discussed the need to develop regulations that specify what approvals a given prospective developer must have before the community referendum.
  • Commissioner McHugh cautioned against providing assistance to one community and not another. He noted that the Commission needs to find a way to provide communities with the support they need without giving certain proposals an advantage in the process for which the Commission will ultimately serve as the judge.
  • Commissioner Stebbins suggested the Commission talk to the Massachusetts Department of Transportation for advice on how to anticipate infrastructure issues municipalities might encounter throughout the casino-permitting process. Commissioner Cameron pointed out that Atlantic City employed an economic development organization that was altogether separate from the Commission granting the licenses, but Commissioner Stebbins cautioned against postponing contact between developers and the Commission for too long.

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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.