A Tribal Casino Coming To Southeastern Massachusetts? Not So Fast...

A Compact Between the Commonwealth and the Mashpee Wampanoag

Today Massachusetts Governor Deval Patrick signed a tribal gaming compact with the Mashpee Wampanoag Tribe (the "Tribe"). The compact is a major first step toward the Tribe becoming the exclusive casino operator in the Southeastern Massachusetts region, one of three regions in which resort casinos may be developed under Massachusetts' new gaming law. But the compact is only a first step in what promises to be a difficult road ahead for the Tribe. Regulatory uncertainties and legal challenges await. This Alert briefly discusses the compact, anticipated next steps for the Tribe and the Massachusetts Gaming Commission (the "Commission"), and the major regulatory and legal hurdles the Tribe now faces.

Regulating the conduct of casino gaming in Massachusetts is "An Act Establishing Expanded Gaming in the Commonwealth" ("Gaming Act"), which Governor Patrick signed into law on November 22, 2011. The Gaming Act permits the newly created Commission to issue a maximum of one casino license in each of three regions defined in the Act. As discussed further below, the Commission's authority to award a casino license in the Southeastern Massachusetts region is restricted if a federally recognized Indian tribe reaches a compact with the Governor and the resulting agreement is approved by the Massachusetts Legislature by July 31, 2012.

The compact between the Tribe and the Governor provides for the Tribe to give the Commonwealth 21.5% percent of gross gaming revenues from its proposed casino, with the proviso that that payment would drop to 15%t of gross gaming revenue should any other casino open in the Southeast region. This percentage is lower than the 25% of gross gaming revenues any non-tribal casino will have to pay the Commonwealth if it obtains one of the three casino licenses. Under the compact, the Tribe is not permitted to operate live horseracing, thereby removing any potential competition for nearby Plainridge Racecourse. The proposed Taunton casino must be smoke-free and comply with the state's worker's compensation, unemployment and health care laws. In addition, the casino will be subject to the jurisdiction of state law enforcement. The Tribe also agreed to submit to the oversight of a to-be-formed Tribal Gaming Commission, the Commission and the National Indian Gaming Commission ("NIGC"). The Governor, on the other hand, agreed to support the Tribe's pending fee-to-trust application with the federal government and urge the federal government to give the Tribe's application early and expeditious approval (a process that is described in detail below). The compact is automatically renewable after its 15-year term expires.

Governor Patrick must next file the compact with the legislature. As noted above, the legislature has until July 31 to approve the compact. If the legislature does not approve the compact by the July deadline, the Commission is obligated to solicit proposals for a resort casino in the Southeast region by October 31, 2012.

The compact's chances for being passed by the July 31 deadline are uncertain. For one, it remains unclear whether the legislature has the ability to amend the compact or must vote "up or down" on the compact as it currently stands. In a press release, the Governor's Office stated that "[t]he compact must be negotiated and ratified by July 31, 2012," suggesting that the legislature may have an opportunity to make changes.1 This could prove problematic for the Tribe as, despite its strong democratic majority, the Massachusetts Legislature by no means serves as a pro forma rubber stamp for initiatives out of the Governor's office. In fact, just yesterday state...