State, Mashpee Wampanoag Tribe Reach Revised Compact

The Mashpee Wampanoag tribe has agreed to pay the state between 15 percent and 21 percent of gross gaming revenue from a proposed casino in Taunton under a revised compact with the Patrick administration that features different revenue-sharing arrangements depending on whether the tribe has competitors to its proposed casino in southeastern Massachusetts.

The compact seeks to protect the tribe’s exclusive rights to casino gaming in southeastern Massachusetts by reducing the amount of shared revenue to zero if the Massachusetts Gaming Commission allows a commercial casino to open in the region.

The deal — renegotiated after the Bureau of Indian Affairs last October rejected a compact that would have delivered 21.5 percent in tribal gaming revenue to the state — reduces the amount of revenue the tribe would share with the state in exchange for Gov. Deval Patrick’s support for the tribe's application to take land into federal trust in both Taunton and Mashpee.

The tribe’s land application is critical to the Wampanoag’s efforts to open a casino. Mindful of concerns that the region will fall behind in the effort to build casinos and that the tribe’s efforts might not be successful, the gaming commission is exploring whether to open the region up to commercial casino bids, and has a meeting scheduled for Thursday to discuss the issue.

The Tribal Council voted on Tuesday night to ratify the agreement, authorizing Tribe Chairman Cedric Cromwell to sign the compact that Patrick must now file with the Legislature for its approval. A summary of the agreement obtained by the News Service details a new tiered revenue-sharing agreement.

Under the 20-year deal, the tribe must pay the state 21 percent of gross gaming revenue from a Taunton casino for as long as it operates the only casino in Massachusetts, an unlikely scenario given the progress already being made to license two other casino developments in eastern and western Massachusetts.

A total of 11 development groups submitted applications for the remaining two casino and one slot parlor licenses, and the gaming commission has set a tentative timetable of late 2013 for the slot license to be awarded and February 2014 for casino licenses.

More likely is that the tribe will return 17 percent of its casino revenue to the state as long as it retains exclusive casino gaming rights in the southeast region. Should a slot parlor open in that region, the tribe’s responsibility to pay would drop by 2 percent.

The last time a compact was put before the Legislature, lawmakers from southeastern Massachusetts objected to the lack of a deadline in the agreement for the tribe to take land into federal trust for a casino before the state could seek commercial casino bids in the region. Tribe leaders called idea of a deadline a "dealbreaker" at the time, the new compact gives the gaming commission the option of forfeiting revenue to seek a commercial development.

The Bureau of Indian Affairs in October objected to the balance of concessions made by the state to justify a revenue sharing agreement that would have sent 21.5 percent of casino revenue back to Massachusetts in exchange for exclusivity. That deal would have required the tribe to still pay 15 percent of its revenue to the state if another casino opened in the region, and the exclusivity clause did not apply to a slot parlor.

The new deal also excludes deals cut between the Patrick administration and tribe in the first compact concerning hunting and fishing rights and other non-gaming issues, such as the regulation of suppliers and entertainment services. The bureau of Indian Affairs considered those matters beyond the legal scope of a gaming compact.

Patrick on the radio last week said that an outline of the agreement had been vetted already by the bureau, increasing the likelihood the second time around that it will be approved.

Advised to restrict the scope of the compact to Class III casino gaming activities, the administration and the Wampanoag tribe agreed that if a tribal casino were to offer Class II games, such as bingo, the gaming commission could license another commercial casino in the southeast region without reducing the state revenue share.

The tribe is also prohibited from offering live horse racing.

The tribe has plans to construct a $500 million resort casino in Taunton, including hotels, restaurants, entertainment and a water park. The tribe estimates it will create 1,000 new construction jobs and 2,500 permanent jobs, with an annual payroll of $80 million.

Similar to the first agreement, the compact requires that the Wampanoag operate a smoke-free casino and comply with state worker's compensation, unemployment insurance and health care laws. The tribe has also agreed to contribute at least $1.5 million to the Public Health Trust Fund for gambling addiction services.

Massachusetts law enforcement agencies will maintain jurisdiction on casino property to prosecute violations of state gaming law, crimes against the facility's gaming operations or other crimes occurring at the casino.