Alert July 17, 2012

Update: Massachusetts Gaming Commission Holds Weekly Meeting

On July 17, the Massachusetts Gaming Commission convened another public meeting, which was attended by members of Goodwin Procter’s Gaming, Gambling & Sweepstakes Practice. The meeting’s highlights included:

Administration

Hiring

  • The newly hired executive search consultant JuriStaff delivered its first report to the Commission. JuriStaff reflected on the merits of limiting the applicant pool for Executive Director to individuals with gaming experience versus accepting applications from individuals with a strong regulatory background but no gaming industry experience. JuriStaff also delivered a draft job description to the Commission, which the commissioners plan to review prior to next week’s meeting.
  • The application for the ombudsman — who will coordinate the Commission’s relationships with, and technical assistance to, potential host communities and prospective developers — is posted on the Commission’s website.

Racing Commission

  • The Commission’s racing consultant, Ann Allman, presented her final report regarding what the Commission needs to know to effectively regulate the racing industry in the state. First, Ms. Allman recommended the Commission adopt:
    • The Association of Racing Commission International (“ARCI”) model rules of racing, which require judges to earn accreditation from the United States Trotting Association;
    • ARCI medication policies to govern the administration of medication to horses; and
    • Licensing procedures to include fingerprinting and random drug and alcohol testing.
  • Second, Ms. Allman recommended that the Commission establish a working group to compare the current regulations with the ARCI model rules and implement desired changes.
  • Ms. Allman and Commissioner McHugh discussed the declining revenues of the racetrack industry as a whole and the increasing difficulty standalone racetracks have with remaining financially stable. Ms. Allman noted that the racetracks she and Commissioner Cameron spoke with are all planning to submit a gaming application.       
  • The Commission has spoken with auditor Suzanne Bump about its wish to have a transitional audit conducted as soon as possible.

Project Work Plan

Consultant Status Report

  • Based on the feedback provided by the Commission, the consultants are revising the draft RFA I regulations. Anderson & Kreiger is reviewing the draft this week, and the consultants will continue to work with the Commission over the next few weeks to prepare the regulations for formal public comment.
  • The Commission has received six comments on the draft RFA I regulations, including comments from MGM and Suffolk Downs. In response to all the comments, Commissioner Zuniga noted a hunger for learning the criteria the Commission will use during its RFA Phase II evaluation. The Commission hopes to develop these criteria after it finalizes the RFA I draft regulations.
  • The Commission debated whether to extend Michael & Carroll and Spectrum Gaming’s contract to include crafting the investigatory process, or whether to retain new consultants who focus specifically on corporate investigation.
  • Chairman Crosby and Commissioner Zuniga spoke with a transaction advisory investment firm, which the Commission might retain to help it vet and negotiate deals with applicants. Commissioner Zuniga also noted that the investment firm might be able to help with ideas to increase competition for licenses, particularly in Region A.

Communicating with State Agencies

  • The Commission has received numerous requests to meet with developers and municipalities. While the Commission is not willing to meet privately with developers or municipalities at this time, it entertained several ideas for initiating a public dialogue. The Commission considered allotting one hour per month for the public to speak at Commission meetings. The Commission also discussed the possibility of allowing parties to speak with the Commission privately, provided the meeting’s attendees consent to the Commission posting a summary of the meeting on its website. The Commissioners noted that they would have to analyze whether this method would satisfy their open meeting law requirements before moving forward with this option.     
  • One potential bidder expressed concern with the Commission’s proposal to prohibit pre-applicants from communicating more than once with state agencies before paying the $400,000 application fee given the potential bidder’s belief that some competitors have already engaged in multiple talks with the Massachusetts Department of Transportation.
  • Commissioner Crosby confirmed with MassDOT that no substantive conversations between the agency and any pre-applicant have occurred. Upon confirmation that the same is true for all other state agencies,  the Commission will release a statement of interest form and begin accepting the $400,000 application fees on August 8 so that bidders can obtain applicant status and commence communicating with state agencies as they deem necessary.

Public Education and Information

  • The Commission will host another public educational forum on August 8 at Western New England University in Springfield. State Senator Gale Candaras will moderate the event. The event will explore community mitigation, tourism and workforce development issues.

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