BOSTON — A divided Massachusetts Gaming Commission chose Plainville on Thursday to be the site of the state’s first and only slots parlor.
On a 3-to-2 vote, the panel offered the slots parlor license to Penn National Gaming, which plans to operate a $225 million facility at the Plainridge harness racetrack. The track has been struggling to stay afloat as horse racing faltered in Massachusetts in recent years.
Commission Chairman Stephen Crosby voted along with Commissioner James McHugh for a competing bid from Cordish Cos. to build a slots parlor in Leominster, saying it would offer more jobs and opportunities for the state’s economically challenged north-central region. A third applicant, Raynham Park, did not receive any votes.
In backing Plainville, commissioners Gayle Cameron, Enrique Zuniga and Bruce Stebbins cited, among other factors, their desire to preserve harness racing. The track’s owners said it would almost certainly close without the slots parlor. The commissioners also noted Penn National’s considerable experience in operating 28 gambling facilities in North America.
“We never knew what the outcome was going to be until the vote was taken, so my stomach was in knots for two days,” said Tim Wilmott, chief executive of Wyomissing, Pa.-based Penn National.
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The commission gave the company until Friday to accept the conditions, after which the license would be formally issued. Wilmott said he did not see any major concerns with the conditions set by the commission, which were largely technical.
It would be the first license for expanded gambling awarded in Massachusetts since passage of a 2011 state law that allows for up to three regional resort casinos but only one slots parlor, a smaller facility with a maximum of 1,250 slot machines but no table games, such as blackjack.
The slots parlor will also be subject to a higher state tax on gambling revenues, 40 percent as opposed to 25 percent for the resort casinos.
Wilmott said he expected the slots parlor at Plainridge to be fully operational by the second quarter of 2015, but added the company would also seek permission from regulators to open on a partial basis with 500 slot machines within six months.
The facility will have a sports bar operated with former NFL quarterback and Heisman Trophy winner Doug Flutie.
Penn National took over the Plainville bid after the track’s owner, Ourway Realty, was disqualified by the commission because of financial irregularities turned up during a background check.
While the three commissioners who backed Plainville also had high praise for the Leominster bid, they cited racing as a factor in their decision.
“If our decision was to result in the track closing, there would be a number of people out of work that day,” said Zuniga.
McHugh, a retired state appeals court judge, said the Cordish proposal was stronger because it had the potential to create more jobs in its region. He pointed to what he called an “ingenious” plan by Cordish to devote at least $1 million in annual slots parlor revenues to promote startup medical device firms.
“In the end, it’s the quality of the jobs, and the number of fulltime jobs, and the location where the jobs will be placed that tips the scales for me toward Leominster,” McHugh said.
Crosby agreed, noting that the Leominster area had a higher unemployment rate than Plainville, in the southeastern part of the state. He also argued that while he supported horse racing, the commission was under no obligation to try to save the industry.
Joseph Weinberg — chief executive of Baltimore-based Cordish, which operates the Maryland Live! Casino — said he respected the panel’s decision.
“We do think it’s a missed opportunity but it was the state’s decision, and they made it,” said Weinberg, who would not rule out a future attempt to enter the Massachusetts market.
The commission evaluated the proposals on the basis of several categories, including economic development, building and site design, and finance. Penn National and Cordish scored the highest grades, with Raynham, a former dog track, trailing in nearly every area.
Once issued the license, Penn National will have 30 days to pay a $25 million licensing fee to the state.