Massachusetts Stringent Gambling Rules Shrink Casino Company Hopefuls

BOSTON (Associated Press) - When Massachusetts lawmakers legalized casino gambling, they took pains to ensure that casinos would not be built in places where they weren't wanted or operated by the ethically challenged.

Two years later, those basic tenets of the law appear to be holding - so much so that only a handful of casino hopefuls remain standing with a key Dec. 31 deadline approaching for final applications.

A string of ballot box setbacks for would-be developers, most recently in East Boston and Palmer, and rigorous background investigations by state police attached to the Massachusetts Gaming Commission - the autonomous agency created to oversee casino gambling - have all but assured that just two or fewer companies will vie for the coveted resort casino licenses in eastern and western Massachusetts, respectively. The possibility even exists of no current bidder being qualified in either region, a prospect that would put off any casino openings for months if not years.

Even so, the state's policymakers aren't apologizing.

"While I am a very strong supporter of expanded gaming, I am also a very strong supporter of saying that if people do not want it in their community, then they are not going to get it in their community," said House Speaker Robert DeLeo, D-Winthrop, who championed the 2011 law.

A cornerstone of the law was the requirement that casino developers negotiate host community agreements with the cities or towns in which they hoped to build, deals that voters must ratify in binding referendums.

Some mayors or town boards simply refused to negotiate with suitors, ending the process immediately. But in other cases where agreements were struck, promising millions of dollars in revenue, infrastructure upgrades and other enticements, residents who had been widely expected to rubber stamp the deals instead turned the other cheek.

Most stunning were the results on Tuesday, when East Boston voters rejected by a 56-44 percent margin a casino at the Suffolk Downs thoroughbred race track, a proposal that enjoyed powerful support from DeLeo and Boston Mayor Thomas Menino, among others.

Mohegan Sun, which for years had courted residents of Palmer, saw its $1 billion casino proposal defeated Tuesday by fewer than 100 votes. The company sought a recount.

In West Springfield, voters rejected Hard Rock's proposal for a casino at the Eastern States Exhibition in September.

In each case, casino foes prevailed despite being vastly outspent by deep-pocketed supporters.

Clyde Barrow of the University of Massachusetts-Dartmouth, an expert on gambling-related public policy issues, said the level of local control in Massachusetts was "unprecedented" among states that allow casinos. It recognized that citizens might well distinguish between favoring casinos "in the abstract" and actually putting out the welcome mat in their own communities, he said.

Certainly some proposals have been embraced by local voters.

Las Vegas gambling mogul Steve Wynn won overwhelming approval from Everett residents in June after Foxborough selectmen shunned his earlier attempt to develop a casino near Gillette Stadium. In July, Springfield voters backed a resort casino proposed by MGM Resorts International and Revere on Tuesday supported the Suffolk Downs proposal even while East Boston did not.

Voters in Leominster, Plainville and Raynham signed off on proposed slots parlors, smaller gambling facilities expected to bring fewer visitors and less traffic. The law permits one slots parlor in Massachusetts.

The lengthy background investigations ordered by the gaming commission have proven far more than perfunctory, causing some would-be operators to chafe a bit under the scrutiny. A finding of unsuitability by the panel can spell the end of a casino proposal.

"The casino folks have to be very worried and are clearly scrambling," said former state attorney general Scott Harshbarger, who was a vocal opponent of legalizing casinos. "There is some adult supervision occurring at the gaming commission. If you want to play in Massachusetts, you have to play by the rules."

No casino project has been entirely sidelined by a background check, but red flags raised by investigators about Caesars Entertainment led Suffolk Downs to sever ties with its operating partner just weeks before the ill-fated referendum. A spokesman for Caesars said Massachusetts was setting standards for suitability that were arbitrary and unreasonable.

The commission still has yet to release background checks on the Wynn group, MGM and Foxwoods, which has proposed a casino in Milford.

Wynn recently called the Massachusetts guidelines the most challenging and complex he'd ever faced in the business and fumed over what he called a "crummy assumption" by state regulators that if you're in the gambling industry, you must be unsavory.

Stephen Crosby, the commission's chairman, said the panel was undeterred by the criticism, and not worried how many applicants might remain at the Dec. 31 deadline.

"We've said many times, we are not pro-casino, we are pro-implementation of this law," Crosby said.

- Bob Salsberg, Associated Press