Casinos Coming To Massachusetts: The Current State Of Play

Author:Mr David Apfel and Robert Milton Crawford Jr.
Profession:Goodwin Procter LLP
 
FREE EXCERPT

Notwithstanding its Puritan past and despite substantial opposition, Massachusetts has legalized casino gambling. The legislation authorizing the building of casinos was passed and signed into law in November 2011. The Chairman of the newly created Massachusetts Gaming Commission, the body that will award casino licenses in the state, was appointed by the Governor in December 2011. And the other four members of the Commission have all now been appointed, the last two just appointed on March 20, 2012.

The local press seems to carry stories on a daily basis about those bidding to enter the fledgling Massachusetts gaming market, and many familiar gaming and gambling names, including Steve Wynn, Caesars Entertainment, MGM Resorts, Hard Rock International, Genting Group and Mohegan Sun, have all initiated efforts to become Massachusetts's first casino owner and operator. Developments have been fast and furious, with multiple deadlines approaching. Although the first Massachusetts casino is unlikely to open its doors before 2016, lenders, investors, developers and operators should begin planning as soon as possible. This client communication is intended to help in that process. It recaps the new Massachusetts law, details the important deadlines established by the law, discusses the Commission chairman's publicly stated expectations, and identifies potential pitfalls and issues that those prepared to ante in should think about, as well as steps to improve their odds of winning.

The New Massachusetts Casino Gambling Law

"An Act Establishing Expanded Gaming in the Commonwealth" (the "Act") of Massachusetts was signed into law by Governor Deval Patrick on November 22, 2011. The Act authorizes the creation of one slot parlor and up to three "resort" casinos, a maximum of one casino in each of three designated regions:

The Act provides for the establishment of a five-member Gaming Commission which will have exclusive authority to grant operating licenses for Massachusetts' one slot parlor and three potential casinos. The appointment of the five members of the Commission was finalized on March 21, 2012, just one day before the deadline. The five Commissioners are:

Stephen Crosby – Mr. Crosby, the Chairman of the Commission, was appointed by Governor Patrick in December 2011. Mr. Crosby is a graduate of Harvard College and Boston University School of Law. He is currently the Dean of the University of Massachusetts' McCormack Graduate School of Policy and Global Studies. He has previously held state appointments under both Democratic and Republican administrations. Gayle Cameron – Ms. Cameron was appointed to the Commission by Massachusetts Attorney General Martha Coakley. Ms. Cameron is a 28-year veteran of the New Jersey State Police, and a former detective in New Jersey's Casino Gaming Bureau who was responsible for the state's casino gaming investigations. Ms. Cameron grew up in Massachusetts and is a graduate of Bridgewater State College and Seton Hall University. Enrique Zuniga – Mr. Zuniga was appointed to the Commission by Massachusetts Treasurer Steven Grossman, and he currently serves as the Executive Director of the Massachusetts Water Pollution Abatement Trust. Mr. Zuniga is a graduate of the Yale School of Management and has previously held management positions at the accounting firm Ernst & Young, the Boston Housing Authority, and design and engineering companies in Mexico. James F. McHugh – Mr. McHugh was jointly appointed to the Commission by Governor Patrick, Treasurer Grossman and Attorney General Coakley. Mr. McHugh served on the Massachusetts Appeals Court from 2001 until his retirement from the bench in February 2012, and he previously served on the Massachusetts Superior Court from 1985 until 2001. Mr. McHugh is also a Navy veteran, and a former adjunct faculty member at Boston College Law School and Northeastern University School of Law. He is a graduate of Brown University and Boston University School of Law. Bruce Stebbens – Mr. Stebbens was jointly appointed to the Commission by Governor Patrick, Treasurer Grossman and Attorney General Coakley. Mr. Stebbens presently serves as a business development administrator for the city of Springfield and has served two terms on the Springfield City Council. Mr. Stebbens is a graduate of The George Washington University, and he previously held positions with the National Association of Manufacturers and the Massachusetts Office of Business Development, and in former Governor William Weld's administration. The Act establishes strict and substantial eligibility criteria for those seeking casino licenses. For instance, a minimum capital investment of $500 million is required of all prospective licensees. All applicants must also provide plans that include a gaming area, at least one hotel and other amenities.

In public remarks, Chairman Crosby has indicated that he expects proposals to be as high as $1 billion in capital investment per casino complex. In addition, he has made it clear that all proposed casinos must be sensitive to local needs in design and operation. They should not just be a mechanism to reduce public debt, but should be destinations compatible with the history and culture of Massachusetts...

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