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The state's gambling commission has turned down petitions from Northampton and Hampden to be designated as surrounding communities to the resort casino proposed in Springfield, while approving a bid from Longmeadow.
The state's 2011 gambling law makes communities located near casinos eligible for funding to mitigate any negative impacts from the developments.
In rejecting Northampton's request on Tuesday, the commission said the potential benefit to the city of increased tourism would outweigh any losses.
The panel also said no to the town of Hampden, but approved Longmeadow's request after hearing a traffic study that suggested increased congestion on Route 5 and other roadways in the town if the $800 million casino proposed by MGM Resorts is built in downtown Springfield.
MGM and Longmeadow now have 30 days to negotiate an agreement.