Blog Goodwin Gaming June 30, 2014

Massachusetts Gaming Commission’s Work Continues with the Evaluation of Eastern Massachusetts …

By Amanda Russo  

Suffolk Downs Proposal
(AP Photo/Suffolk Downs) (Dec. 3, 2012)

Wynn Resorts Proposal
(AP Photo/Wynn Resorts) (Mar. 27, 2013)

The Massachusetts Gaming Commission (“Commission”) held two public hearings the week of June 21, 2014 to determine which applicant would be awarded the sole Boston-area casino license. The Commission held its first hearing on Tuesday, June 24, 2014, to get input on Mohegan Sun’s proposed casino at Suffolk Downs racetrack in Revere. The next day, on June 25, 2014, the Commission held a public hearing in Everett to discuss Wynn Resorts’ proposal. “This is a really important part of the process that’s required by law,” Commissioner James McHugh said of the hearings. Commissioner McHugh acted as Chairman at both hearings due to Chairman Crosby’s recusal from the Boston-area deliberations following allegations of bias after he attended the opening day festivities at Suffolk Downs.

The hearings came on the heels of the Supreme Judicial Court’s June 24, 2014 ruling to allow the referendum to repeal the state’s gaming law on the ballot in November. In a statement responding to the ruling, Chairman Crosby, said that the Commission respects the SJC’s holding. While the Commission takes no official stance on the repeal issue, Chairman Crosby went on to say that the Commissioners “are committed to implementing the law as it currently exists in a manner that is participatory, transparent and fair.”

Mohegan Sun Proposal in Revere

Mohegan Sun’s proposed project entails redeveloping approximately 40 acres of property near the Suffolk Downs horse racing track. Suffolk Downs representatives have stated that Suffolk Downs will likely be forced to close if the Commission does not award a casino license to Mohegan Sun. The $1.3 billion dollar project was approved by Revere voters in February of this year. Once completed, the casino would boast a 170,000 square foot casino floor, approximately 500 hotel rooms, and other space for shopping and entertainment. Mohegan Sun claims that the project will create approximately 6,500 jobs (2,500 construction jobs and 4,000 permanent jobs). An agreement with Revere guarantees that the casino will pay the city approximately $33 million during construction and an additional $25-30 million a year in payments once the casino is open.

The public hearing on the Mohegan Sun development took place at Revere High School, with more than 400 people in attendance. Mayor Daniel Rizzo was among the first to address the Commission and gave a passionate speech about the economic growth and opportunities the casino would bring to the town.

Mitchell Etess, the Mohegan Tribal Gaming Authority’s Chief Executive Officer, also addressed the Commission, calling Wynn’s planned tower a “cookie-cutter design,” identical to a previous Wynn proposal in Philadelphia. Etess opined that the Wynn design would be “better suited to Las Vegas.” Etess went on to say that Mohegan Sun Massachusetts was “specially designed” for Revere.

Of the 400 attendees, only a handful of anti-casino activists showed up to contest the casino proposal. One casino opponent, Brian Gannon, complained of the speaking order of the hearing; he thought that the public, rather than elected officials, should have been allowed to speak first.  Gannon said “a culture of intimidation” had prevented many opponents from speaking up. “This room is stacked against us,” he said. Another casino opponent, Justin Pasquariello, personally addressed the mayor, saying that, “when addiction increases in Revere and surrounding communities and crime increases, and make no mistake the research tells us that will happen, you will be responsible for not having brought that into the discussion.”

Despite a few voices of dissent, more than 63% of city voters supported the casino proposal during the February 2014 referendum.

Wynn Resorts Proposal in Everett

The Wynn Resorts proposal is for a $1.6 billion resort casino in Everett on a former chemical plant site along the Mystic River. Wynn’s plan is to undertake a multimillion-dollar cleanup of pollution at the 32-acre site. Everett voters overwhelming approved the casino proposal in June 2014, with 87% of voters in favor of the Wynn plan.

Similar to Mohegan Sun’s proposed casino, the Wynn development includes a roughly 100,000 square foot casino floor, more than 500 hotel rooms, and space for nightclubs, shopping, and dining. At the hearing, Wynn representatives said the plan will create approximately 3,700 construction jobs and more than 5,000 permanent positions, totaling 30% more jobs than Mohegan Sun’s project. The casino also reached an agreement with Everett to pay the city $30 million during construction and more than $25 million a year once the casino opens.

At the hearing, Wynn Senior Vice President Robert DeSalvio told the Commission that he wanted to “correct some things” said at the Mohegan Sun meeting. DeSalvio noted that Wynn was much further along in the process of filing a final state environmental impact report than Mohegan Sun and denied the claim that Wynn had sought waivers from certain Commission regulations. He also said that any mention of Everett project’s design as “cookie-cutter” couldn’t be further from the truth.

Many speakers also discussed the strong need for the economic boost Wynn’s project would provide to their community.  Mayor Carlo DeMaria told the Commission, “we’re the city that time has forgotten.” The Wynn project “could be the catalyst for our development,” Mayor DeMaria said. Dr. Thomas Stella, Everett’s Assistant Superintendent of Schools, went on to say that the Wynn proposal is the city’s only hope for remediating the contaminated would-be casino site.  Not one person from Everett said anything in opposition to the Wynn proposal.  The only voices of dissent were opponents from neighboring communities who discussed issues with traffic and the unwillingness of Wynn to discuss labor harmony agreements with union representatives.

Time to Place Your Bets

In the race for the sole Boston-area casino license, things are neck and neck. Voters of both potential host communities have approved their respective casino proposals. According to two new polls, however, the voters of eastern Massachusetts favor Mohegan Sun’s Revere casino proposal over Wynn’s Everett proposal.

The Boston Globe conducted a poll on June 20, 2014 that showed 20% of respondents favoring a Boston-area casino at Suffolk Downs in Revere, with only 7% supporting Wynn’s Everett bid — 39% said they don’t have a preference, with a final 29% disapproving of any casino gaming in the area.

Another poll, commissioned by Mohegan Sun, showed 50 % of voters preferring the Suffolk Downs proposal, compared to only 22% favoring the Wynn plan.  The same poll showed that 35% of voters would vote to repeal the casino law altogether when they head to the polls this fall. The casino nay sayers are, however, outnumbered by the 58% of voters who would vote against a casino law repeal.

If either set of poll numbers is to be believed, Suffolk Downs has the edge over Wynn. However, with the Suffolk Downs proposal garnering opposition (albeit limited opposition) at this week’s hearing and Wynn’s hearty financial position, and its promises to repurpose otherwise unusable wasteland and create more jobs than Mohegan Sun, Wynn just might pull ahead. Wynn’s DeSalvio has gone as far as to promise a hiring preference for Suffolk Downs employees who lose their jobs if Mohegan Sun is not awarded the license.

Ultimately, the decision rests with the Commission. A decision was initially expected by early September 2014. However, that might now shift to sometime after the November 2014 elections, following  Boston Mayor Martin J. Walsh’s June 26, 2014 request that the Commissioners delay the decision on the resort-casino proposals until after voters have weighed in on the gambling referendum. The Commission will hold a public hearing on July 2, 2014 to take public comment on Mayor Walsh’s request.