Massachusetts Miracle
The Massachusetts legislature passed a final version of a gaming expansion bill that authorizes three regional casinos and one slot parlor. The final bill was approved 118-33 by the House and 23-14 by the Senate. Governor Deval Patrick signed the bill a few days later, commenting, “A long chapter in the debate around casino gambling is about to close.”
The first casino could possibly open within about three years, according to some in the industry. One will be put in western Massachusetts, one in the southeast and one near Boston. The slot parlor could be open within a year.
The casinos will pay a 25 percent tax rate, while the slot parlor will be 49 percent, a 9 percent increase from the original House and Senate bill. Casino developers will be required to invest a minimum of $500 million and pay an $85 million license fee. The slot parlor developer will pay a $25 million license fee and be required to invest at least $125 million.
Towns where the casinos will be located will need to approve casinos via a referendum, but only if it’s a small town. In larger cities, only “neighborhoods” or wards of cities, not the entire city, will be allowed to vote on whether a casino would be allowed there. This provision is seen aimed at East Boston, where Suffolk Downs proposes to build a casino, and has much political support.
The final bill took out an amendment passed by the Senate that would have allowed casinos to give away drinks, as long as bars and taverns could do the same. In the final wording, casinos will be limited to serving free drinks on the casino floor. Restaurants and taverns will still be banned from offering them at all.
The ban on lawmakers working in the gaming industry for one year after leaving office, which had been passed in the Senate, also stayed in the bill.
Competition for the licenses started immediately. But in reality, two licenses are almost locked up.
Connecticut’s Mohegan Sun, whose development arm has been lobbying strongly to build a casino, including a 600-room hotel and spa on 152 acres in Palmer that it hopes to lease, is the favorite in the western Massachusetts region. Other announced bidders in the casino license competition include Hard Rock International, which has partnered with Paper City Development LLC to propose a Hard Rock Hotel and Casino in Holyoke, with Penn National Gaming and Ameristar also likely to bid.
In the southeastern region, the license is reserved for the Mashpee Wampanoag tribe, as long as it negotiates a compact with Patrick by the end of July.
Cedric Cromwell, chairman of the tribe, reacted ecstatically to the news. “I really want to see the Wampanoag tribal nation rise and leave no Mashpee Wampanoag behind,” he said, according to the Cape Cod Times. The tribe has the financial backing of Genting bhd of Malaysia.
KG Urban Enterprises, which is exploring proposing a casino in New Bedford, has filed suit against the state, claiming the bill gives the tribe an unfair advantage.
The real competition will be for the license in the Boston area. While many politicians—including House Speaker Robert DeLeo—want the license to go to Suffolk Downs, a major competitor emerged soon after the bill was signed when Wynn Resorts Chairman Steve Wynn visited Robert Kraft, the owner of the New England Patriots, to propose a casino next to Gillette Stadium in Foxborough.
Wynn’s plans may be derailed, however, because the Foxborough town council has resisted changing zoning laws to permit a casino. A referendum could be held by mid-year.
Las Vegas Sands may also bid, with Sheldon Adelson telling Global Gaming Business that he believes only one location would work (see cover story on page 22).
Meanwhile, Patrick, Attorney General Martha Coakley and Treasurer Steven Grossman began the process of picking the people who will serve on the independent commission that will choose the location of and oversee the selection of the operators for the state’s three regional casinos and one slot parlor.
The officials promised that the process for picking the five commissioners would be transparent and rigorous. The law gives the officials four months to name the commissioners. The governor will name the chairman. The treasurer and attorney general will name one each, and the three of them will pick the final two. No more than three commissioners can come from the same political party.
According to Grossman, quoted by the Boston Globe, “We have only one chance to get this right.”
