Blog Goodwin Gaming May 03, 2016

Massachusetts Gaming Update: Commission Rejects Application for Resort Casino in Brockton


The wait is over and the decision is in. On Thursday, April 28, the Massachusetts Gaming Commission voted 4-1 against awarding a commercial license to Mass Gaming & Entertainment, LLC to build a resort casino in Brockton. After evaluations and deliberations, the Commission’s majority determined that Mass Gaming’s proposed plan did not meet expectations for a resort casino in Southeast Massachusetts, also known as “Region C.” In addition, the Commission found that competition between the proposed Brockton casino and the Mashpee Wampanoag Tribe’s casino in Taunton might threaten successful gaming in Region C.

The Commission evaluated and rated Mass Gaming’s proposal for a resort casino in terms of Finance, Economic Development, Building & Site Design, Mitigation, and General/Overview. The Commission found the proposed plan at least “sufficient” in four of the five categories, but ultimately decided the proposal was “insufficient” for its failure to demonstrate that it would be a “destination resort casino” rather than a “local convenience casino.”

While the Commonwealth’s lone slot parlor has been operating in Plainville for just under a year, Massachusetts does not currently have an operating full-flown destination resort casino. The Commission has awarded licenses for commercial casinos in Springfield and Everett, but the development of those projects is still underway. If the Commission had also granted a commercial license to Mass Gaming, there would have been one slot parlor and four resort casinos in the state, including two resort casinos in Region C. While proponents for expanded gaming anticipate a strong customer base, four resort casinos may have been too ambitious without an existing baseline to measure customer growth for resort casinos.

As a result of the Mashpee Wampanoag Tribe breaking ground for its First Light Resort & Casino on April 5, the Commission had to consider the consequences of having both a tribal casino and commercial casino in Region C—specifically, oversaturation of the resort casino market and the potential loss of revenue share under the Tribe’s compact with the Commonwealth. This potential loss of revenue share had to have factored significantly into the Commission’s decision.

Under the terms of the Mashpee Wampanoag Tribe’s compact with Massachusetts, the state receives 17 percent of the tribe’s gaming revenues if the tribal casino is the only casino located in Region C. If, however, the tribal casino competes with a commercial casino in the region, then the Mashpee Wampanoag Tribe does not have to pay any revenue share—zip, zero, zilch, nada—to the state. Consultants and commentators warned that the tribal casino would reinvest its tax savings to make its resort casino bigger and better and, ultimately, draw more customers and profits than a competing commercial casino. Evidently, the Commission agreed that, in a competition between a tribal casino and resort casino in Region C, the Commonwealth would be the hardest hit.

This despite the pending lawsuit challenging the Department of the Interior’s decision to take land in trust for the benefit of the Tribe—the very decision which has allowed the Tribe to move forward with its plans to build a tribal casino in Taunton. But the Commission has stated that it could revisit the issue should the Tribe be unable to deliver the tribal casino that the Commission is expecting.

The post Massachusetts Gaming Update: Commission Rejects Application for Resort Casino in Brockton appeared first on Goodwin Gaming.