GAMING COMMISSION TO REKINDLE SOUTHEAST CASINO TALKS IN SEPTEMBER
By Colin A. Young
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, JULY 26, 2018.....Massachusetts gaming regulators are interested in getting an updated look at the gambling market in the Northeast and what a third resort-style casino would mean for Massachusetts, but they want to make it through a busy summer first.
The Massachusetts Gaming Commission decided Thursday to put off until September a request to reconsider their 2016 denial of a bid to build a casino on the Brockton Fairgrounds. Mass Gaming & Entertainment, the developer behind the unsuccessful Brockton bid, petitioned the commission to reconsider its application without reopening a broad application process for the southeastern region casino license.
MG&E, which is backed by Rush Street Gaming, said its roughly $700 million project is "ready to start" and the $85 million licensing fee "is ready to be paid today." The developer said its project would provide 2,000 construction jobs and 1,800 permanent jobs, and would generate more than $70 million in annual state tax revenue and up to $13 million for Brockton.
Since the 2011 expanded gaming law took effect, Massachusetts has licensed a slots parlor and two of three possible resort casinos. The slots parlor, Plainridge Park Casino in Plainville, opened in June 2015. MGM Springfield is expected to open its doors next month and Encore Boston Harbor, operated by Wynn Resorts, is expected to open in 2019.
Commissioners on Thursday decided to instruct staff to draft a response to MG&E's letter and opted to defer a broader discussion of Region C -- the commission's designation for southeastern Massachusetts -- and the possibility of reconsidering casino applications there until at least September, after the state's first resort casino opens in Springfield.
"With everything the commission has before it for the summer, I think it would be best to set a date for this; a time in the fall when we can truly ask questions and come up with a plan for how to go forward," Commissioner Eileen O'Brien said.
Once the commission launches the process, its staff is expected to delve into the status of the gambling market in the Northeast, and specifically in Massachusetts, as well as the potential impact on casino gambling from online gaming, sports betting and daily fantasy sports. The commission will also consider what kind of application process it should conduct if it considers issuing a Region C license a second time.
MG&E requested that the commission "agree to reconsider MG&E's application without reopening the [licensing] process more broadly."
But Gaming Commission General Counsel Catherine Blue said the commission does "not at this time have a process in our regulations for a reconsideration or the award of a license in a process that is different from what we already have" and chairman Stephen Crosby expressed interest in seeking other commercial casino operators that may be interested in applying for the Region C license.
Of concern in Region C when the commission rejected the Brockton proposal from MG&E by a 4-1 vote was the possibility of the Brockton casino competing with the Mashpee Wampanoag tribe's planned $1 billion First Light Resort and Casino in Taunton, less than 20 miles from the site of the planned Brockton casino.
Since the commission denied the MG&E/Rush Street proposal, the decision to grant the tribe land in trust on which the tribe planned to construct the casino has been reversed and the future of the tribe's plan remains in doubt.
"The Commission has done nothing with regard to Region C licensing for over two years. As a result, the Southeast region has lost the opportunity for thousands of jobs, and the Commonwealth has lost tens of millions of dollars in tax revenues," executives from MG&E wrote. "The delay has put Region C at a competitive disadvantage, and increased the likelihood that regional competitors will absorb Region C's potential market share."
But commissioners on Thursday made clear the potential for competition with a tribal casino was not the only factor that led to the Brockton bid's rejection.
"From their letter, the MG&E people make it seem as though the only, or the most important, factor in their not being awarded the license was the status of the tribe," Commissioner Enrique Zuniga said. "There was indeed a lot of other factors that played into, ultimately, the 4-1 decision not to award the license. That is an important clarification for the record."
Crosby, who participated in Thursday's meeting by phone, said he went back to review the commission's ruling from 2016 and reminded commissioners they were "way more comprehensive in our concerns than simply the tribal issue."
In its ruling from 2016, the commission wrote that it determined MG&E's application demonstrated that it had not "thought broadly and creatively about creating an innovative and unique gaming establishment that will create a synergy with, and provide a significant and lasting benefit to, the residents of the host community, the surrounding communities, the region and the Commonwealth of Massachusetts, and will deliver an overall experience that draws both residents and tourists to the gaming establishment and the Commonwealth of Massachusetts."
In April 2016, when the commission denied a license to MG&E, Crosby said, "Bottom line, I end up feeling like this does not meet the standards that are required to make the decision. I think that I come down on the side that this does not warrant an award."
Commissioner Bruce Stebbins said in 2016 he had "some concerns about the strength of this application" and said he didn't "want to make an award of a license to an application that, in my estimation, is just not up to the level of excellence that I would expect."
Commissioner Gayle Cameron, who also participated by phone, said Thursday she thinks an updated market analysis would help the commission determine how to move ahead with the possibility of licensing a casino in Region C but added that she thinks many of the factors that led to the 2016 denial have not changed.
"Overall, I don't think many of the circumstances that caused us to deny that license have changed," she said. She added, "The saturation point is always something we're looking for and what's best for the commonwealth."
When it rejected the MG&E application two years ago, the Gaming Commission anticipated that there may be legal issues with the tribal casino planned for Taunton and held out the possibility that it could re-open the commercial licensing process in Region C at a later time.
"Circumstances could change. If we don't award the license we retain the option to re-bid this years down the line or however long later," Zuniga said in 2016. "I know that's not what the city of Brockton would like to hear, but in the notion of risk there is a lot that we could learn along the way simply by preserving the option to award at a later time."
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