Alert January 17, 2013

1/17/13: MGC Weekly Meeting Summary

On January 17, 2013, members of Goodwin Procter'sGaming, Gambling & Sweepstakes Practice attended another public meeting of the Massachusetts Gaming Commission.

Administration

Master Schedule

  • The Commission reviewed the master schedule for the application process which targets approval of the first license in the spring of 2014 and the remaining licenses in the winter of 2014.

Application process

  • The Commission discussed developing more detailed evaluation criteria for casino proposals focused on amenities and non-gaming enhancements in order to ensure that gaming facilities in Massachusetts are truly “destination resort casinos” rather than “convenience casinos.”
  • The Commission further resolved to solicit public comment seeking innovative marketing and tourism ideas to consider as part of the evaluation criteria.

Public Education and Information

Report from Ombudsman

  • The four likely factors for defining a “Surrounding Community” will be: (i) proximity; (ii) affected transportation infrastructure; (iii) noise and environmental impact; and (iv) drainage patterns.
  • The Ombudsman also reported that they would be seeking public assistance and comment in developing the full definition of “Surrounding Community.

Community Disbursements

  • Pursuant to 205 CMR 114.03, not less than $50,000 of the initial Phase 1 application fee shall be used to reimburse the host and surrounding communities for the expenses related to determining the impact of a proposed gaming facility and negotiating a community impact mitigation agreement.
  • The two ways in which communities can receive money under 205 CMR 114.03 are:
    • Reimbursement of actual expenses that were properly appropriated at the local level and consistent with the intent of the statute, as determined by the Commission.
    • By way of a grant to such community to be spent at a later date to cover such expenses.
  • The Commission discussed some other important elements of the disbursements related to the Commissions role, including:
    • All negotiations would happen between the applicant and the community with the Commission acting only as a “gatekeeper.”
    • The grant agreement would include audit and clawback features so that the Commission could recapture any funds that remained unspent at the conclusion of the process.
  • The Commission also discussed the possibility of a municipality refusing to enter into a letter of authorization with an applicant.  The Commission determined that this would be an issue for the applicant to deal with at the time of the Phase 2 application.  There was no decision made as to what an involuntary process might look like.
  • The Commission unanimously voted to give the Ombudsman oversight of grant disbursements to communities seeking reimbursement for impact studies.

Regulation Update

  • The Commission reviewed the progress made at the January 10 meeting on the process for the Phase 2 applications.  It was acknowledged that development of the Phase 2 regulations and Phase 2 application review (including the definition of “Surrounding Community,” designation of host communities, application review, etc.) would be the most time consuming part of the approval process. 

Investigations and Enforcement Bureau (IEB)

Scope of licensing & Investigations

  • The IEB informed the Commission that the Phase 1 applications for each of Plainridge Racecourse and Penn National Gaming, Inc. had been reviewed and assigned to investigatory teams comprised of Massachusetts State Troopers to conduct the necessary background checks.  Review of an additional five applicants (MGM Springfield; Mass Gaming Entertainment, LLC; Hard Rock MA; Wynn, LLC; and Mohegan Sun) was nearly complete and the remaining would be completed by the end of the following week. 
  • It was noted that each applicant was instructed to submit a redacted version of their application so that the non-confidential portions could be released to the public, and the IEB was in the process of gathering and compiling those redacted versions of the applications. 
  • There was discussion of whether the initial $400,000 application fee would prove sufficient to fund review or if additional fees would have to be collected from applicants.
  • The Commission discussed the fact that two of the applicants had not yet specified which license they were seeking and the IEB informed the Commission that this information was considered a priority and would be resolved by the end of the following week.

Racing Division Report

Pari-mutuel and simulcast statute review and discussion

  • The Commission then discussed its broad regulatory powers to regulate simulcast licenses and the importance of Chapters 128A and 128C.  Chapters 128A and 128C are set to expire in 2014.  Because they are the only provisions that define the licensing authority of the Commission, they will need to be renewed or replaced.

Proposed regulation changes to 205 CMR 3.00 and 4.00

  • The Commission next discussed several proposed changes relating to veterinary matters, including: (i) repealing the current regulation which permits the use of a non-steroidal anti-inflammatory medication (phenylbutazone) on race day; (ii) providing a referee to afford owners and trainers additional due process protection in the event of an alleged medication violation; (iii) preventing the transfer of horses in a suspended trainer's care to his or her spouse during the period of suspension; and (iv) providing clear withdrawal times for accepted therapeutic medications to veterinary practitioners and trainers in the form of treatment restriction windows.
  • The Commission then approved the distribution of a letter explaining these proposed changes to the Local Government Advisory Board.

Other Business

Deadline Waiver Requests

The Commission then reviewed four requests for waiver/extension of the January 15th Phase 1 application deadline.  Each of the four requests was individually reviewed and discussed to see if it met the “extraordinary circumstances” standard set forth in 205 CMR 111.01(6) or the four-part analysis contained in 205 CMR 102.03(4).

     i.     City of Chicopee

  •       Waiver Request Denied

     ii.     Good Sam's Casino    

  •       Waiver Request Denied

     iii.     WM Development Company, LLC (t/a Paper City Development)

  •       Waiver Request Denied

     iv.    The Seafan Trust

  •       Waiver Requst Denied

The next meeting will be on Tuesday, Jan. 22 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 the author: David Apfel or Bob Crawford, co-chairs of Goodwin Procter’s Gaming, Gambling & Sweepstakes Practice.