Massachusetts Casino and Card Room Gaming
The push behind the successful effort to legalize gambling began in March 2007, when Gov. Deval Patrick formed a task force to study the societal impacts of gambling in Massachusetts. These included slot machines at the state's four racetracks, effects on the state lottery and the federal recognition of the Mashpee Wampanoag tribe.
In September 2007, Gov. Patrick announced a plan to allow three casinos in the state. Revenue from the casinos would be used for road and bridge repairs and provide tax relief for property owners. The bidding process would give preference to Indian tribes, allowing the Mashpee Wampanoag tribe a chance to bid for a license to build its casino in southeastern Massachusetts. State-licensed casinos would require voter approval in the host community.
The governor filed casino legislation in October 2007. The bill called for the creation of the Massachusetts Gaming Control Authority, with Gov. Patrick in charge. It included a $350,000 application fee for prospective operators, at least $200 million in licensing fees, and an allocation of at least 27% of gross revenue or $100 million a year to the state. Casino revenue was to go into seven trust funds, including the Community Gaming Mitigation Fund, to pay local affected community costs, and the Gaming Public Health Fund, which was to provide for social-service programs related to gambling. It was also announced that the casinos would be required to follow the state's workplace smoking ban. In November 2007, voters in Pittsfield, Chicopee and Worcester approved a nonbinding referendum to allow casino gambling in their cities.
In January 2008, Gov. Patrick warned legislators that if they did not act, the Mashpee Wampanoag tribe could go through the Department of the Interior with their plan for a casino in Middleboro and the state would receive no revenue. In addition, Gov. Patrick believed that the tribe would push for Class III gaming. The bill was sent to the House in March 2008, where it did not pass.
In January 2009, legislation to allow casino gambling in the state was proposed by a state Senate leader and other legislators. In March 2009, Senate Republicans filed the casino bill as an amendment to the budget proposal. In May 2009, it was defeated.
In April 2010, the state House of Representatives passed legislation allowing for up to 3,000 slots at the state's four racetracks and resort-style gaming, but it failed to pass.
Finally, on 22 November 2011, Gov. Patrick signed legislation (HB1039/HB3697) that allowed up to three destination resort casinos and one slots facility. The legislation created a five-member gaming commission to oversee the gaming licensing process. Each of the three casinos was to be located in a geographically distinct area, with one facility in Region A, defined as Suffolk, Middlesex, Essex, Norfolk and Worcester counties; one in Region B: Hampshire, Hampden, Franklin and Berkshire counties; and one in Region C: Bristol, Plymouth, Nantucket, Dukes and Barnstable counties.
The MGC has granted three gaming licenses. MGM was awarded the western Massachusetts license in June 2014, and MGM Springfield opened in August 2018. Wynn Resorts was awarded the Boston-area license in September 2014, and Encore Boston Harbor is scheduled to open in fall 2019. The slots parlor license went to the Plainridge Park Casino in February 2014. Plainridge formed a partnership with Penn National, and the property opened on 24 June 2015.
Even though three licenses had been awarded and another was pending, there was still strong opposition to casinos in Massachusetts. Casino opponents successfully placed a referendum on the November 2014 election ballot that would have repealed casino legislation. The state tried to block the referendum from appearing on the ballot, saying it was unfair to casino companies who had already sunk a lot of money into the state. But in June 2014, the state's Supreme Court ruled that the referendum had to be placed on the ballot.
The referendum did not pass, however, as Massachusetts voters overwhelmingly rejected the measure in November 2014.
There are two types of gaming licenses: Category 1, or resort casino, and Category 2, or slots parlor. A gaming license may not be awarded unless the applicant has received a certified and binding referendum vote in favor of gaming by the host community. Each gaming license mandates that if there is existing live or simulcast racing as of 1 July 2011, the licensee must complete the live racing season and simulcast racing must continue or the license will be suspended. Each licensee also agrees to be a licensed state lottery sales agent. An annual license fee of $600 is levied for each slot machine.
A Category 1 license permits the operation of table games and slot machines. The law requires a minimum capital investment of $500 million to include a gaming area, at least one hotel and other amenities. A minimum licensing fee of $85 million must be paid within 30 days after the license is awarded. The license is valid for 15 years. A Category 1 licensee pays a daily tax of 25% on gross gaming revenues. Up to three Category 1 licenses have been authorized by law.
A Category 2 license permits the operation of a gaming establishment with up to 1,250 slot machines; table games are not allowed. A capital investment of at least $125 million is required. The minimum licensing fee for a Category 2 license is $25 million. The renewal license fee is at least $100,000. A Category 2 licensee pays a daily tax of 40% on gross gaming revenue and an additional daily assessment of 9% of its gross gaming revenue to benefit the Race Horse Development Fund. Only one Category 2 license has been authorized by law.
The Boston license proved to be highly controversial. In 2011, Suffolk Downs, a racetrack that spans East Boston and Revere, inked a partnership agreement with Caesars to build a casino on the grounds of the horse track. In 2013, Caesars and Suffolk Downs signed a host community agreement that would see the casino giant build a $1 billion resort.
But in October 2013, the MGC indicated that Caesars might not be found suitable for doing business in the Bay State, and Caesars withdrew from the deal.
The Caesars withdrawal was the first in a chain of events that ultimately doomed the Suffolk Downs proposal, which had been considered an automatic since the casino legislation had passed. In November 2013, East Boston rejected the Suffolk Downs casino at the ballot box. As a result, Suffolk Downs had to scramble to find a new casino plan. The solution was to host the casino in Revere only and to partner with Mohegan Sun.
Revere had already approved the Suffolk Downs casino as a neighboring community, and in February 2014, it approved the casino plan as a host city.
The drama surrounding the Suffolk Downs proposal opened the door for Wynn Resorts. Wynn selected Everett as its host city and proposed to build and operate a $1.6 billion resort. The Everett voters approved the plan at the ballot box in June 2013.
The relationship between Wynn and the city of Boston has been contentious, to say the least. Mayor Marty Walsh sued the state Gaming Commission, claiming the commission had not acted properly when awarding the license. Walsh also wanted additional compensation — beyond the $24 million over 14 years Wynn had already agreed to — to help pay for public safety. That lawsuit was thrown out by a Suffolk Superior judge in December 2015, and the two eventually reached a deal in January 2016, with Wynn agreeing to an additional $6 million over 15 years.
In April 2013, the MGC decided to accept applications from commercial casino developers for the casino resort license in southeastern Massachusetts. The Mashpee Wampanoag tribe began construction on a casino in Taunton in early 2016.
The deadline for applications for the southeastern Massachusetts casino license passed in March 2015, with five groups successfully meeting the deadline. The commission voted against awarding a commercial casino license in April 2016.
In 2016, voters rejected a proposal to expand the state's law to allow for another slots parlor.
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