Massachusetts Casino Developers Fight Back Against Repeal Referendum

Posted on: January 31, 2014, 05:30h. 

Last updated on: January 28, 2014, 11:58h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

In Massachusetts, the battle over obtaining the state’s three coveted casino licenses has been a fierce one. MGM, Penn National Gaming, Mohegan Sun and other developers have maneuvered and lobbied vociferously to win votes and convince cities that they’re better for the community than their competitors. But now, nearly all of these rivals are working together to defeat an effort that could potentially eliminate all of their opportunities at building in the state.

Banding Together to Fight

Most of the major developers that have proposed casino projects in Massachusetts have signed on to a lawsuit that seeks to block a referendum aimed at repealing the state’s casino laws altogether. That referendum has been pushed by opponents of the state’s casino expansion, and they have obtained enough signatures to potentially see the question go on the statewide ballot come November.

The coalition of casino companies that are behind the lawsuit is a powerful one.

MGM Resorts International is the largest name on the list, but major industry players like Connecticut’s Mohegan Sun, Penn National Gaming, PPE Casino Resorts and Raynham Park have also signed on in an attempt to strike down the referendum before it happens.

That list does exclude a couple of prominent names in the industry, however. Wynn Resorts hasn’t yet decided to take part in the lawsuit, despite the fact that they’re hoping to build a casino in the city of Everett, Massachusetts. Foxwoods is also getting back into the casino battle with a proposal in the town of Fall River, but is not part of the lawsuit. There’s no word yet as to why these two companies have not decided to take part in the legal action, and it’s unclear if they could still join in over the weeks or months to come.

The casinos have some powerful allies in this fight. In particular, the Attorney General of Massachusetts has said that he believes the repeal effort is unconstitutional, putting him on the side of the casino firms. The state’s Supreme Judicial Court is expected to make a ruling on the referendum in July. Of course, even if the court decides to let the referendum go forward, voters would still have to vote to repeal the casino law, which was passed in 2011.

That law allowed for three “Las Vegas-style” resort casinos to be built in three distinct regions of the state. In addition, it allowed for a single slots parlor to be built anywhere in the state. State regulators are expected to start making decisions on which casino proposals will get those licenses in the spring.

Big Money on the Line

Casino developers have a variety of concerns about the repeal effort – and most of them come down to money. Operators that receive licenses from the state will have to pay a nonrefundable licensing payment of $85 million (or $25 million for the slots parlor) to the state in June, even as the possibility of a repeal of the casino law looms over their heads. Even if the referendum were defeated, the campaign to do so would be expensive for the casinos, which have already spent millions campaigning for their proposals in various towns and cities across the state.

For MGM – which has already invested millions in an effort to build an $800 million complex in Springfield – a successful repeal would be particularly disastrous.

“Our plan was endorsed by an overwhelming majority of voters,” said Michael Mathis, MGM’s vice president of global gaming development. “It would be devastating to roll back all that has been accomplished and take away the promise of what is to come.”