Mass. Casino Proposals A Possible Boon To TaxpayersPlay
The proposed $1 billion casino development outside Gillette Stadium may have to clear an extra hurdle. Foxborough Building Commissioner William Casbarra said besides a town referendum, a town meeting vote will also be necessary to OK zoning changes, and that requires two-thirds approval.
The commissioner’s determination can be appealed, but if if stands it’s a major obstacle. Many in Foxborough are ambivalent about further development.
But if you’re not from Foxborough, you probably want voters there to vote yes.
The resort casino would go up on 200 acres owned by Robert Kraft, the owner of the New England Patriots. He’d lease the land to casino developer Steve Wynn. And Wynn has been courting town voters, trying to assure them that a resort casino in Foxborough would be nothing like those he’s built in Las Vegas and China.
"Having Steve Wynn gunning for this license is going to force Suffolk Downs to offer a higher price, which is good for Massachusetts taxpayers."David McAdams, auction theorist
"To put a word to it, if those places are grand or vast or something like that, think of the word 'intimate' for me. I think that this is a place that I would make feel intimate," Wynn said.
If the billionaire sells town residents on the idea, that still doesn’t guarantee a casino will come to Foxborough. It only gives Wynn and Kraft the green light to submit a license application to the state's Gaming Commission. And to win a license, they’ll have to outbid other proposals in the same license region, namely East Boston’s Suffolk Downs.
"Well the value of having a second competitor is that people will bid more," said David McAdams, an auction theorist at Duke University's Fuqua School of Business.
"Having Steve Wynn gunning for this license is going to force Suffolk Downs to offer a higher price, which is good for Massachusetts taxpayers," McAdams said.
That’s because competitive bids in the secret bidding process would boost the amount the state gets. At a minimum, developers have to pay $85 million up front for a license, hand over 25 percent of revenues and pay additional aid to the town. In East Boston, Suffolk Downs is teaming up with Caesar’s to plan a similar-sized resort to the Foxborough proposal.
"A best-in-class, sort of world-class, high-end facility, that combines gaming, retail, restaurant, hotel, and in our case, does it with horse-racing as a centerpiece," said the racetrack’s Chief Operating Officer Chip Tuttle.
But horse racing as a centerpiece won’t win this horse race; more money on the center of the table will.
"There’s the whole issue of maximizing benefits to the state," said UMass Dartmouth professor Clyde Barrow.
Barrow said the state law requires the Gaming Commission to look at many factors, including overall economic value to the state. He said the Foxborough proposal has the disadvantage of being at the southern edge of the state’s northernmost casino region.
"And essentially, if you locate a casino that far south, you’re effectively leaving the entire northeast region open to New Hampshire, which is already poised to undertake gaming legislation in the spring," Barrow said.
McAdams agrees that Suffolk Downs has the advantage of being in Boston, further away from other casinos-to-come, with better access to more people.
"There’s lots of reasons why the Gaming Commission is probably predisposed to award this license to Suffolk Downs," McAdams said.
McAdams said that’s only going to make the men behind the Foxborough proposal make their bid more attractive.
"Wynn and Robert Kraft know what they’re up against. And so the fact that they’re willing to go through all the effort and expense to prepare a serious bid means they think they have a chance of winning! So that puts real pressure on Suffolk Downs. They don’t know how high Wynn and Kraft are gonna go."
That is, assuming Wynn and Kraft get the go-ahead from Foxborough residents. If voters there say no, all Suffolk Downs has to worry about at this point is a competing proposal in Milford. That one isn’t being financed with pockets as deep as Wynn’s, meaning Suffolk Downs probably wouldn’t have to reach as deep into its pockets.
This program aired on December 16, 2011.