BOSTON Casinos are coming to Massachusetts, but the process is unfolding in fits and starts. Last week the federal government rejected the Taunton casino deal that had been worked out between the state and the Mashpee Wampanoag tribe, so that project has gone back to the drawing board.
And Tuesday the Massachusetts Gaming Commission decided not to hire a consultant to try to drum up more bids for a casino license in the Boston area, which means Suffolk Downs is the only bidder so far and faces no competition.
For an update on where casino development stands, WBUR’s All Things Considered host Sacha Pfeiffer spoke with the chairman of the state’s gaming commission, Steve Crosby.
Sacha Pfeiffer: Is this process playing out the way you had hoped?
Steve Crosby: Well, I think everybody, including the Legislature, was anticipating and desiring substantial competition. The whole point of this project is economic development, to generate jobs and, secondarily, to generate revenue. And the way you get the best economic development is in a competitive environment where people are competing for the opportunity and putting their best foot forward. That’s what we’re seeing happening in western Massachusetts, and I think that’s great that we have at least four companies competing, and you can see them trying to one up one another in their better and better bids.
In eastern Massachusetts, at least for the moment, we only have one bid and that’s kind of odd because this is our biggest and best market.
So if that’s the case, why do you think it’s proving harder to stir up interest for that Boston-area casino license?
We really don’t know. I think the Suffolk Downs people have done a good job of positioning themselves early on. They’ve been at this for a long time. I think there is some sense that they’ve got such a big head start that it’s hard to catch up. But we have made quite a bit of a point here — in Las Vegas, at all of our meetings, talking with the industry — that there is nothing set in stone, that there is no favorite in any market, and that we are looking for competition in eastern Massachusetts. And I think the word has gotten around that the commission doesn’t agree with Suffolk Downs that it has a head start that makes it a prohibitive favorite.
If the commission is eager to attract more competitors for the Boston-area license, why did it opt not to hire a consultant to try to do that?
Just because we decided that it wasn’t going to be worth the $150,000.
This idea just popped up from a consultant as kind of a passing idea. And we thought it through and we actually put out [a request for proposal], and we asked three different companies to tell us, “Could you add value? Could you really change the nature of the competitive marketplace? And could you help the financing for all of the companies?” This wasn’t just about competition in eastern Massachusetts. This was to encourage the financial markets to support all of the bidders in Massachusetts. And the consultants came back and said, “Not that much,” basically — that we don’t need to encourage the financial markets. The financial markets are eager to come to Massachusetts. We are already doing the job of getting the word out there that eastern Massachusetts is open for business.
Does the fact that there’s only one bidder for the Boston-area license indicate to you that the process is somehow flawed?
I don’t think so. Steve Wynn and Bob Kraft came, and if the people of Foxborough had wanted a casino, there’d be two bids. So it isn’t that there’s something inherent that has limited it to only one. I think it means that Suffolk Downs has done a good job positioning themselves. They’ve been at this for years and years and years and years as the legislation has been talked about, and this is a big market. It’s going to cost a billion dollars, and not a lot of people have a billion dollars. So, no, I don’t think it’s anything about the process.
In Taunton, regarding the Mashpee Wampanoag casino deal that was rejected by the federal government, the feds say the reason they rejected it is that the the state would have gotten too generous an amount of the casino’s gambling revenues — 21.5 percent. As you know, from the start, there had been criticism of that contract and predictions that it wouldn’t be approved. Could and should the state have come up with a better agreement from the beginning?
No, I think that was clearly a negotiation between the tribe and the state, and the tribe agreed. You often renegotiate deals. It’s not all that surprising.
There are other legal hurdles, though. There’s a question about whether the land will even be able to be designated tribal land, which is a necessary step.
That’s another question: Is this even going to happen?
Well, right. Is there a chance this deal will never get off the ground between the Mashpee Wampanoags for this Taunton casino?
Sure. There’s first of all the compact. Then there is the land in trust. Then there are any number of potential lawsuits that can tie this thing up for a long time. We will be sitting there carefully watching this, and we don’t want this to sit around forever, either.
But right now, because it is sitting around, there are other developers who might be interested in the southeastern region who are blocked from submitting proposals. When will that change?
Well, whenever there’s some certainty here. We are assuming that they will renegotiate and that the Legislature will re-approve, and that the BIA — the Bureau of Indian Affairs — will approve. And there’s a very real possibility that they will get reservation land, or land in trust. So for the time being, we believe that it’s perfectly plausible that this will happen in a reasonable amount of time.
But every step of the way, we have to keep an eye out. As I say, our job is to look out for the overall best picture, for not only southeastern Massachusetts, but the whole state.