Alert July 26, 2012

Update: Massachusetts Gaming Commission Holds Weekly Meeting

On July 26, 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 Commission will likely include a sentence in the job posting for its Executive Director that indicates that some racing responsibilities may accompany the job. The commissioners debated whether including this phrase would discourage would-be applicants, but the Commission is tentatively moving forward with including the phrase.
  • Commissioner Cameron recommended to the Commission that it post a job opening for a separate Executive Director of racing. She indicated that she was flexible on the job title, but noted that other states name the position Executive Director.
  • The Commissioners noted that there must be at least two finalists for Executive Director pursuant to Commissioner Stebbins’s conversation with the Attorney General. Therefore, while the Commission may be able to shield the identity of initial applicants, at least one applicant who does not ultimately get the job will be revealed to the public.
  • The Commission is seriously considering hiring a staff attorney as well.

Internal Policies

  • The Commission executed a contract with the project management firm that is in the process of reviewing the Commission’s past memoranda in order to compile a master timeline for the regulatory process.

Racing Commission

  • Commissioner Cameron underscored the urgency in implementing racing consultant Ann Allman’s recommendations. Commissioner Cameron would like Ms. Allman to facilitate a working group that would make recommendations to the Commission regarding necessary modifications to current operations.

Project Work Plan

  • The Commission has the ability to extend its contract with its current consultants — Spectrum Gaming and Michael & Carroll. For now, the Commission has requested that the consultants provide it with what their plan of action would look like should they be kept on beyond September 30 (after the Commission submits the RFA Phase I regulations to the Secretary of State, thus completing the work for which the Commission retained the consultants).
  • The Commission is working with its consultants to prepare the revised RFA Phase I draft for formal public comment. It discussed lingering policy questions that must be resolved before the formal comment period begins. Some of these questions include:
  • Financial assistance to host and surrounding communities: the Commissioners agreed that the regulations should institute a mechanism for providing funding for host and surrounding communities before the formal application period begins. Prospective developers will be given the opportunity to pay the $400,000 application fee, if they wish, before the RFA-I application is available. A portion of that fee will be available to cities and towns shortly thereafter.
  • Delegation: Commissioners agreed that Commission staff members, once the licensing process is more formally underway, should be empowered to make final decisions, which would then be appealable to the Commission rather than the staff merely making recommendations that the Commission would have to approve.
  • Political contributions: Chapter 24 Section 46 of the expanded gaming law prohibits applicants from making certain kinds of political contributions, and Section 47 includes certain reporting requirements if an applicant makes a political contribution. The Commission will likely declare a pre-applicant an applicant when it pays the $400,000 application fee, and all applicants will have to report the political contributions they have made since November 22, 2011.
  • Code of ethics: The Commission will also likely draft a code of ethics that exists independently from the regulations. The code of ethics will apply to the Commission, the State Police, the Massachusetts Alcoholic Beverages Control Commission and, to a limited extent, the Massachusetts Attorney General.
  • Qualifications of developers: If the Massachusetts State Bureau of Investigation (“the Bureau”) comes across a disqualifying circumstance during the course of investigating an applicant, the Commission agreed that the Bureau should nevertheless complete its entire investigation of the applicant in case the circumstance either turns out to be less relevant than originally anticipated or the developer is able to correct the problem.
  • Supplemental information: The commissioners agreed they should build authority into the regulations for the Commission to request supplemental information after an application is filed.
  • Requests that applicants provide supplemental information not relevant to their application: The commissioners noted that applicants may have a wide range of information that will help the Commission populate its database and conduct informational studies with regard to, among other things, compulsive gambling. The commissioners discussed building authority to request this information from applications into the regulations, but applicants would be free to decline without penalty.
  • Role of the Bureau in making findings of violations in the statute: The Commission agreed that, save RFA-I and RFA-II decisions, the Bureau will have the power to make final decisions, which will be appealable to the Commission.
  • Application fee: Prospective applicants may pay the $400,000 application fee any time from August 8 up until filing the application.
  • Adjudicatory proceedings regulations: The Commission will likely piggyback off of the regulations of comparable government agencies — like the Racing Commission — in crafting its adjudicatory proceedings regulations.

Charitable Gaming

  • There are four types of charitable gaming in Massachusetts: beano (BINGO), charitable gaming tickets, bazaars and raffles. The State Lottery has historically regulated beano and charitable gaming. Additionally, the Lottery regulates bazaars and raffles conducted by anyone who holds a beano or charitable gaming license. The Attorney General currently regulates the remaining bazaars and raffles. The Commission, with the support of the Attorney General and the Lottery, is recommending that the Lottery regulate all types of charitable gaming. The Commission is hoping to draft legislation to accomplish this goal, and to make the transition by Fiscal Year 2014.

Public Education and Information

  • The Commission tentatively plans to institute a 30-minute window prior to its weekly meeting for members of the public to make statements to the Commission. Individuals will have to register ahead of time, present in the order in which they register and limit their statement to three minutes. Although this forum is not specifically designed for developers or operators to communicate with the Commission, nothing precludes them from doing so as members of the public.

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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.