Massachusetts voters can decide casino issue, court rules

Casino developments in Massachusetts proposed by MGM Resorts International and Wynn Resorts Ltd., have been thrown in limbo by the state’s highest court, which said Tuesday voters can ultimately decide if the commonwealth can have gaming.

The Massachusetts Supreme Court ruled unanimously in favor of a ballot question that could throw out a 2011 decision by state lawmakers allowing the development of three regional casinos and a slot machine parlor.

MGM Resorts has been granted the single license in Western Massachusetts to build an $800 million casino in Springfield. The state’s gaming commission ruled, however, that the casino company would not have to pay an $85 million licensing fee until the repeal issue was settled.

MGM Resorts has paid the city of Springfield $15 million in advance payments and agreed to an additional $25 million in annual payments once the casino opens.

In a statement, MGM Springfield President Michael Mathis said the company is prepared to fight to the keep the casino project alive. He said the Las Vegas-based company has spent three years developing the project in conjunction with all of Western Massachusetts.

“We are confident that our urban revitalization project in Springfield … is something to which all Massachusetts voters can relate,” Mathis said. “We are fully prepared to extend this message to a larger audience through a statewide campaign to educate the voters on the enormous economic benefits that would be lost to the taxpayers … in a repeal.”

Wynn Resorts has proposed building a $1.6 billion casino along the Mystic River in Everett outside Boston. The company is competing for the single license with the Mohegan Sun Indian Tribe, which is partnering with the Suffolk Downs Race Track on $1.3 billion development in Revere.

The commission was not expected to decide on the Boston area license until September.

A spokesman for Wynn Resorts said the company did not have a comment on the ruling.

Penn National Gaming, which owns M Resort in Henderson, has the slot machine parlor gaming license is currently building a $225 million casino as part of the Plainridge harness race track in Plainville.

Penn National Senior Vice President Eric Schippers said the company was disappointed by the ruling but that construction would continue “full steam ahead.” The slot machine casino is expected to open in June 2015.

Analysts said Tuesday recent polling shows Massachusetts voters favor the casinos. A poll conducted by the Boston Globe showed 52 percent of respondents would vote to keep the state law versus 41 percent who would vote to repeal it.

Deutsche Bank gaming analyst Carlo Santarelli told investors he expects voters will favor casinos. He said the phrasing of the ballot question will be considerably more favorable than current language suggests.

“We would note that both of the license holders and some of the remaining participants for the yet to be awarded licenses are using considerable union labor, thus, we would anticipate the unions will be strong supporters of the gaming initiative,” Santarelli said.

In a statement, Massachusetts Gaming Commission Chairman Steven Crosby said the board “respects” court’s decision. He said the commission has not taken a position on the repeal.

“We are committed to implementing the law as it currently exists in a manner that is participatory, transparent and fair,” Crosby said, adding the commission has been flexible in the licensing and regulatory process “in the atmosphere of uncertainty.”

The court’s ruling overturned a finding by the Massachusetts attorney general that the proposed ballot question was unconstitutional because it would cause casino developers to lose property without compensation.

The anti-casino measure was pushed a group that said developers weren’t entitled to any compensation because no property or contract rights exist. They also maintained that the state has “police powers” to revisit and revise laws affecting “public morals and welfare” at any time.

In their repeal campaign, opponents said casinos are a predatory industry and their presence would lead to increased crime and gambling addiction and would hurt small businesses near the resorts.

John Ribeiro, chairman of the group Repeal the Casino Deal, said the group will now enter into a new stage of the fight — by persuading voters to outlaw casino gambling.

“While this ruling marks a huge hurdle now cleared, it’s also the firing of the starting gun in this incredibly important campaign,” Ribeiro said. “We know Massachusetts can do better than this casino mess.”

American Gaming Association President Geoff Freeman said the Washington D.C.-based trade organization would work to “ensure voters have the facts about our industry instead of tired stereotypes.”

Freeman said the vote could cost Massachusetts “thousands of jobs and millions of dollars in revenues gaming will bring to the commonwealth.”

Proponents of the law point to thousands of permanent jobs and temporary construction jobs that would be created, along with an influx of new tax revenue for the state. The 2011 law imposes a 25 percent tax on gross gambling revenues at the casinos and a 40 percent tax on slots parlor revenues.

The Associated Press contributed to this report. Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.

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