1/3/13 MGC Weekly Meeting Summary

On January 3, 2013, members of Goodwin Procter's Gaming, Gambling & Sweepstakes Practice attended another public meeting of the Massachusetts Gaming Commission

ADMINISTRATION

Personnel searches

• The commissioners noted that critical hires are set to be completed by January 31, 2013 or slightly thereafter. There are finalists for the Investigations and Enforcement Bureau and General Counsel positions. The background checks on the finalists are being conducted.
• The commissioners reviewed the Employee Manual - Chapter 6 and voted to approve it.
• Chairman Crosby stated that the Commission's search for the Executive Director is progressing and anticipates an update in the near future. 

INVESTIGATIONS AND ENFORCEMENT BUREAU (IEB)

Scope of licensing

• The commissioners noted that there is one more potential applicant speaking to consultants.
• Commissioner Cameron reported that all potential applicants have completed "scope of licensing" meetings with investigators.
• There is a meeting next week and a conference call with all potential applicants. Despite this, the commissioners stated that this will not slow down the application process.

Investigations

• The commissioners stated that Plainridge Racecourse, MGM and Penn National have submitted Phase 1 applications. As a result, the background investigations will begin immediately.
• The commissioners reminded everyone of the January 15, 2013 deadline. In this reminder, the commissioners stated that applicants should be thoughtful in their submissions, namely making sure that all the relevant documents are submitted and that all documents are in electronic format.
• The commissioners stated that they will let the public know as soon as applications are submitted. By January 15, 2013, they will summarize where things stand.  

KEY POLICY QUESTIONS

Future Questions

• All future questions will be available for public comment. There are significant policy questions that will need to be addressed before the next phase of regulations.

RACING DIVISION

Transition Update

• Director Durenberger reported that the laboratory move is on track and should be completed by January 9, 2013.
• The transition audit requested by the Commissioner was completed by the State Auditor and is in final form. Adequate controls are in place, and all rules and regulations have been followed.
• Director Durenberger reported that the September 30, 2012 payments were processed on December 26, 2012. The December 31, 2012 payments are being processed and should be timely made.
• Director Durenberger stated that payments should be made because the legislation calls for the payments and cities and towns had budgeted for them. For the 2013 fiscal year, there would be a specific appropriation to set the monies aside to make the payments.
• Director Durenberger also stated that they were on track for all of the regulatory changes and that the personnel who opted to transition were all working. There are a couple of key hires going through the background check process.

PUBLIC EDUCATION AND INFORMATION

    a. Report from Ombudsman

    i. Information requests from developers, communities or others

• Gaming Policy Advisory Commission -- the labor seat was filled by Brian Lang from Unite Here. They are still waiting for the chair of the committee to be appointed by the Governor.
• With regard to question number 12 which related to the RFA 2 application, Ombudsman Ziemba submitted the following recommendations:
  • The Commission has an interest in having the process move along as quickly as possible. To the extent the licensing is not complete, a conditional license will be given, but this has inherent risks.
  • Once the license is awarded, there are statutory provisions in place that can put deadlines on construction. The failure to comply will result in financial penalties.

    ii. State permitting process

• Ombudsman Ziemba's report recommended that the Commission not mandate local and state permitting, although requiring the filing of the Environmental Notification Form (ENF) encourages bidders to complete an expanded ENF which shortens the process.
• The Ombudsman recommended that the Commission not get involved in local permitting and that the Commission require applicants to comply with local zoning. The standard is higher at the local level because of the supermajority requirement of zoning boards and the zoning appeal board process.
• Accordingly, the recommendation was that there be an expedited process for applicants. The report indicated two benefits associated with this: economic (revenues and jobs) and risk mitigation.

CHARITABLE GAMING

• Commissioner McHugh gave the report on charitable gaming. Chapter 23K, Section 4 gave the Commission control over charitable gaming. This legislation requires the commissioners to review the existing statutes and make recommendations for changes. This was done in consultation with the Attorney General’s Office. It is recommended that the regulation of charitable gambling be transferred to the Massachusetts Lottery with supervision by the Attorney General's Office.
• The proposed legislation would repeal the portion of the statute that gives the Commission jurisdiction over charitable gaming. It was also proposed that the legislation that regulates beano be repealed as well.
• Chapter 271, Section 7A was recommended for modification to deal with three issues: i) make it clearer; ii) deal with the problem associated with 50/50 raffles; and iii) consolidate the functions of the Massachusetts Lottery as well as the Attorney General's Office.
• The Commission recommended that in order to be considered a Charitable Gaming Organization the organization must be: i) registered as a charity; ii) be run by members of the organization; and iii) file a tax return giving the appropriate amount of money collected to the Massachusetts Lottery. It was also recommended that the penalties for running an unauthorized bazaar be increased.
• Some of the commissioners took issue with the definition of bazaar and had concerns that this would include poker gaming events. As a result, the Commission approved the proposed legislation with the exception of the definition of the word bazaar pending further consideration by the Attorney General's Office.

PRACTICE OF LAW BY OUT OF STATE ATTORNEYS

• Attorney Grossman informed the commissioners of the rules required for out of state attorneys to practice in Massachusetts.
  • Regulation 107.02 requires the following with regard to out of state attorneys:
    • The attorney must be a member of good standing in all jurisdictions in which he or she is admitted.
    • No present disciplinary proceedings in any jurisdiction.
    • Read and be familiar with Chapter 23K and CMR 205.
    • A member of the Massachusetts bar must present the application and represent the person/entity concurrently with out of state counsel.
• Attorney Grossman recommended that legal staff review and approve the applications and issue the notices to the petitioners.
• As of the date of the Commission meeting, the Commissioner had already received two applications.
• Attorney Grossman stated that this procedure is the same procedure followed by the courts of Massachusetts.
• It was recommended that a fee not be charged and that this rule apply to the Racing Division as well.

The next meeting will be on Thursday, Jan. 10 at 1 p.m., at the Division of Insurance 1st Floor, Meeting Room E, 1000 Washington Street, Boston, Mass.

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