All bets are on as players enter state’s casino game for licensing

By James D. Mitchell

 

“Anyone who’s anyone” in the casino and hotel business has laid down their bets for the rights to obtain casino licenses—each slapping down their respective $400,000 licensing fee as part of the Phase I application for a Greater Boston (Region A) casino license, which is expected to be awarded to one casino developer by February 2014.

Mass. Gaming Commission (MGC) Chairman Stephen Crosby called Tuesday’s filings “a momentous occasion.” In interviews this past week, Crosby expressed that the commission will be under heavy scrutiny to award the licenses quickly, neatly, and fairly.

As of Tuesday three companies have committed their proposals and money for the Greater Boston license; Wynn Las Vegas, LLC, owned by Vegas billionaire Steve Wynn, has signed a lease agreement for waterfront property in Everett. The second prominent and earliest favorite is Suffolk Downs in East Boston, which is partnered with Las Vegas’ Caesars Entertainment. The third is Crossroads Massachusetts, LLC/Warner Gaming, which proposes a $700 million casino/hotel resort in Milford.

A fourth possible “dark horse,” PPE Casino Resorts/The Cordfish Company, in Baltimore, has yet to submit a proposal but could pursue slots or a casino. Suffolk Downs’ owner Richard Fields also partnered with Cordfish when they developed the Seminole Hard Rock in Florida.

For many observers, the two new entries vying for the casino license were a surprise considering that Suffolk Downs was the lone applicant for quite some time. But all that changed when Wynn, along with Mayor Carlo DeMaria, Jr., made a surprise visit to Everett to look over the former Monsanto plant site, which is situated on the Mystic River.

Following a tour, Wynn addressed the media at an Everett city hall press conference, stating that he was in the hospitality business and that every hotel or project built by his company is first-class.

In a statement from Mayor Carlo DeMaria, Jr.—sent to the Everett Advocate on Wednesday—the mayor announced, “I am very pleased that Mr. Wynn has filed an application with the Gaming Commission. I look forward to open, honest and forthright conversations between the administration, business owners, the residents and the developer. I know that this is a very exciting time for the City of Everett and the Commonwealth of Massachusetts and could lead to great things for our community.”

In 2011 Wynn, partnered with Patriots’ owner Robert Kraft, proposed a gaming complex in Foxborough but was shot down by town voters. Wynn has since secured a lease on the Monsanto property and become a serious player in the regional bid for the casino license.

But Suffolk Downs backers, including Boston Mayor Thomas Menino, have some heavy stakes in the East Boston horse racing track’s success.

“The process of earning a license requires significant investment and substantial resources, and we have worked with our partners at Caesars Entertainment to assemble a best-in-class team as we move toward a second phase of larger public review of our plans to create thousands of jobs and improve the local economy,” said Joe O’Donnell, a principal owner of Suffolk Downs and a Cambridge, MA-based entrepreneur and philanthropist.

Suffolk Downs paid its nonrefundable $400,000 application fee on August 10, 2012.

“This is an economic development initiative that will set the standard for gaming development in Massachusetts and will create thousands of new jobs with real career paths and room for advancement,” said Richard Fields, a principal owner of Suffolk Downs. “And it is built on a foundation of collaboration and partnership—with local residents and community groups; with local businesses; and with Boston’s entertainment, tourism, and convention facilities.”

Since introducing its development plans last June, Suffolk Downs has hosted several community meetings and addressed numerous local business organizations to further discuss the development and transportation plans along with the career opportunities that will be available at the resort. In the weeks ahead, Suffolk Downs will provide updates on opportunities for local businesses, public safety programs, and regional tourism initiatives.

In December Suffolk Downs and Caesars announced a partnership with the Citi Performing Arts Center, Boston’s leading not-for-profit performing arts and cultural programming provider.

According to the Mass. Gaming Commission (MGC) website, the background investigations of all applicants for Category 1 (resort casino) and Category 2 (slots-parlor) gaming licenses will begin immediately. Each applicant for a gaming license, as well as their qualifiers, will undergo extensive background investigations to ensure they meet the high standards for good character, honesty, integrity, and financial suitability.

MGC has established multiple investigative teams to execute the substantial background investigations. The teams are comprised of gaming experts from the consulting firms Spectrum Gaming and Michael & Carroll and collectively include former FBI agents, state investigators, prosecutors, Massachusetts state police troopers, and accountants; the teams all have vast experience in all types of investigations, including but not limited to, background, corruption, organized criminal enterprise, and racketeering, as well as corporate due diligence and gaming industry backgrounds for the largest gaming entities in the industry.

The due diligence investigations for Massachusetts entity applicants will cover their regulatory history in other jurisdictions, financial stability, compliance plan and history, and recent litigation, among other areas. The investigations for qualifiers—those individuals who are officers, board members, or key investors of the applicant—will cover their employment history, criminal record, education, stockholdings, and financial suitability, among other areas. Investigations may take up to six months to complete, dependent on the complexity and number of qualifiers for each applicant.

MGC will announce when public versions of the applications will be made available. The applications must first be reviewed and processed by the investigators for completeness and areas of confidentiality.

MGC has already made significant progress in planning the regulations necessary for the Phase 2 process, which will focus on an applicant’s site-specific plan. Phase 2 regulations are expected to be released in summer 2013.

In an effort to speed the licensing process, MGC has also made a determination to first proceed with the issuance of the single slots-parlor license. It is anticipated that the slots-parlor license will be awarded by the end of 2013. MGC anticipates the first resort-casino license to be awarded on or before February 26, 2014.