Alert June 19, 2012

Update: Massachusetts Gaming Commission Holds Weekly Meeting

On June 19, 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:

Commission Hiring

  • Commissioner Zuniga reported that four different executive search firms have submitted proposals and the solicitation period has come to an end. He is currently in the process of reviewing the applications and will determine if one or two of the firms should come in for an interview. The commissioners plan to discuss these applications and make a determination at the next meeting.
  • Chairman Crosby reported that several people are in the process of being hired for office staff positions, but the background check mechanisms are still being put in place.

Commission Internal Policies

  • Commissioner Zuniga has drafted all the chapters of the employee manual and has started circulating the chapters for review. The commissioners plan to vote on the manual at the next meeting.

Project Management

  • The commissioners still seem undecided on whether to bring in a temporary worker or use a firm to put together the project management chart. Commissioner Zuniga will collect quotes and the Commission will vote on it next week.

Casino Workforce Development

  • The Commission heard a presentation by Holyoke Community College president and chair of the Council of Presidents, Bill Messner, on workforce development. The presentation slides may be found on the Commission’s website. The 15 community colleges in the Commonwealth have agreed to establish the Community College System Casino Careers Training Institute. There would be a training site in each of the three regions that will offer certifications and licensures necessary to work in one of the casinos. Mr. Messner said it could take up to a year to have the infrastructure in place to start developing the necessary workforce.
  • Chairman Crosby expressed excitement over what the community colleges are doing and is very supportive. However, he said he was unsure on the degree to which the Commission would be involved or provide financial support. Commissioner Stebbins agreed that this was very important, but expressed his fear that some organizations could try and take advantage of the opportunity by offering worthless or fraudulent certifications. Chairman Crosby agreed that they must be wary of “fly-by-night” operations.

Request for Public Comment

  • Commissioner McHugh told the commission that the request for public comment had been circulated, and the response period will last a month. The request seeks advice on how the Commission drafts the rules for the first phase of the application process and advice on expediting the process.

Consultant Report

  • Kathleen O’Toole of Michael & Carroll gave the consultant update. The main things they have been working on since the last meeting are planning mandatory job positions, collecting information on standard salaries, determining future revenue sources and developing the RFA Phase I timeline. They will be meeting with various commissioners in the coming week to discuss options for a formal organization structure before submitting a final proposal to the Commission.
  • Importantly, the consultants have started drafting the RFA Phase I regulations in consultation with Anderson & Kreiger. They will incrementally circulate the sections as they finish them. At next week’s meeting they will discuss in greater detail the proposed RFA Phase I timeline.
  • The other important advice given was on near term hires. Their full memorandum of recommendations may be found in the Commissioners Packet. In addition to the Executive Director, the consultants believe it is important to hire a General Counsel, Director of Information Technology, Revenue Collection Manager, Director of Administration, Human Resources Manager, and Deputy Director of the Investigation and Enforcement Bureau (“IEB”). There was disagreement among the commissioners on several of these positions, so they decided to further discuss the issues next week when Commissioner Cameron is present. However, a few issues are of note:
    • The Expanded Gaming Act states that the Deputy Director of the IEB will report to the Chairman. The consultants wonder if that was a mistake and that the position should actually report to the Executive Director.
    • Commissioner McHugh questioned whether the commission should first hire a senior general counsel or a more junior attorney to handle day-to-day legal work.  Either way, Commissioner McHugh indicated that there is currently enough work for a full time lawyer.
    • There was disagreement over whether the Director of IT must be a stand-alone position, or if it could be rolled into the Director of Administration role. The consultants and Commissioner McHugh indicated that it should be a very high-level, stand-alone position.

Community Mitigation

  • After attending the Community Mitigation Forum, the commissioners all agree that this is a more urgent issue than they had previously expected. Chairman Crosby will begin drafting a short memorandum with proposals to discuss soon. Also, they discussed hiring a community ombudsman to spearhead this issue. Commissioner McHugh also brought up the idea of creating an advisory commission surrounding mitigation.
  • After the success of the first Community Mitigation Forum, actors in Western Massachusetts have asked to have a similar forum that will be more accessible to people in that part of the Commonwealth. Chairman Crosby agreed that this was a good idea, and asked Commissioner Stebbins to take the lead in putting it together.

Charitable Gaming

  • Commissioner McHugh reported that he has met with representatives of the Attorney General’s office and will soon meet with the Town Clerk’s Association. After that, he will have thoughts on charitable gaming that he will be ready to share with the Commission.

Contribution Disclosure

  • Commissioner McHugh presented updates on two proposals under discussion that will have an impact on applicants:
    • First, Commissioner McHugh discussed the Office of Campaign and Political Finance’s (“Office”) proposed rule requiring that municipalities disclose all political contributions to elected officials from casino license applicants. The rule would require that disclosures be made to the Town Clerk and to the Commission. The Office will soon hold a public hearing. Commissioner McHugh raised two important questions: (i) at what point does one become an applicant? and (ii) will there be a look back provision requiring disclosure of contributions made prior to becoming an applicant?
    • Second, Commissioner McHugh informed the commission that the House is currently debating a bill that would require anyone who spends money supporting or opposing a ballot question regarding approval of a casino disclose that information prior to the vote. The proposal, House Bill 4049, would amend the referendum disclosure law currently in place.
    • Commissioner McHugh pointed out that these proposals are in line with the Commission’s goal of transparency, but they could raise First Amendment issues. He questioned whether the Commission should be supporting the proposals. Chairman Crosby said he does not believe it is the Commission’s role to be proactively supporting the proposals.

Communication and Outreach

  • Ms. Driscoll, the Commission’s Director of Communications, updated the Commission on her work. Of note, she is working with state vendors on branding, working with the mass.gov webmaster on make the Commission’s site more user friendly and promoting the gambling forums. Further, she is in the process of organizing the community inquiries so the Commission can effectively respond, and so it can catalogue the questions as an informal poll to see what people are most concerned about.
  • Now that the request for public comment has been released, the Commission discussed having a hearing in which community members may speak. While Commissioner McHugh expressed doubt that there would be enough time to have a full hearing, most of the Commission agreed that a focused hearing on the specific issues in the notice was feasible. Chairman Crosby said that this could be a chance to hear from casino industry representatives who have had little interaction with the Commission.

Economic Development

The commissioners all agreed that the Economic Development Forum was informative. While discussing it, they provided some interesting insights into their thinking:

  • Chairman Crosby acknowledged that it was clear the “3+1” model – three resort casinos and one slots parlor – appeared economically feasible.
  • The Commissioners all agree that the three full casinos should be destination resort casinos. To that end, a major factor in granting the casino licenses will be the amount of amenities planned. This would include retail shopping, golf courses, restaurants, etc. Chairman Crosby mentioned that the commissioners should all start thinking about ways that the Commonwealth can encourage travel to the resort casinos.
  • Chairman Crosby and Commissioner Stebbins both commented on the negative discussion surrounding the slots parlor. The panel members said that very little new money comes into the Commonwealth through slots parlors – they tend to just move the same money around. Further, the slots parlor must be located in a place where it is unlikely to take gamblers away from the resort casinos, as those will be the real focus and revenue creators. Commissioner Stebbins suggested putting the slots parlor close to the border and far away from the other casinos. Chairman Crosby said this was an urgent issue as the slots parlor phase is fast approaching. He is concerned about the lack of information regarding cost/benefit analysis, locations and economic impact. These are issues he hopes to talk to the consultants about.
  • Commissioner McHugh said that one of his big takeaways was the desire to design the application process in a way that increases competition and allows for easy comparison. Important factors he mentioned are community mitigation and job creation. He said that Missouri has a good model.
  • Finally, Chairman Crosby mentioned the idea of granting one license at a time (also discussed at the Economic Development Forum). A staggered approach would allow an applicant who lost in one region to revise its application and resubmit it for a different region.

 

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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.