Blog Goodwin Gaming May 20, 2014

New Bedford Casino Developer Drops Legal Challenge to State’s Gaming Law

KG Urban Enterprises, a developer seeking to build a resort casino in New Bedford, dropped its legal challenge over a portion of a Massachusetts casino gambling law that gave initial preference to a federally recognized Indian tribe in southeastern Massachusetts.

Recent filings with the 1st U.S. Circuit Court of Appeals showed an appeal by KG Urban had been voluntarily dismissed. The company sued the state after passage of a 2011 law allowed for up to three regional resort casinos in Massachusetts, along with one slots parlor.

KG Urban argued a provision of the law discriminated against potential commercial developers, effectively giving the Mashpee Wampanoag tribe temporary exclusivity in the southeast region.

In 2013, the Massachusetts Gaming Commission voted to begin accepting casino applications from commercial developers in the region while tracking the tribe’s efforts to gain federal approval for its proposed resort casino in Taunton. Lawyers for the state argued that the panel’s vote made the lawsuit unnecessary because KG Urban and other developers were no longer barred from applying for casino licenses.

But KG Urban argued they had no guarantee from the commission that commercial applicants in the southeast would receive the same consideration as those in the two other regions designated under the law.

U.S. District Court Judge Nathaniel Gorton threw out the case in January, but the company appealed.

A KG Urban spokesman said the recent decision to end the legal challenge arose out of ongoing conversations with the gambling commission and negotiations with New Bedford’s mayor over a potential host community agreement for the proposed casino at the site of a former power plant on the city’s waterfront.