Gaming panel seeks casino clarifications

Asks Wynn, Mohegan Sun to address concerns


The Massachusetts Gaming Commission on Monday seemed to be near an impasse in choosing a Greater Boston casino licensee, so the agency asked representatives of Mohegan Sun and Wynn Resorts to come in on Tuesday to clarify how they would address the concerns of the four commissioners.

Before breaking for the day, Wynn seemed to hold the edge in several key areas of comparison, but the commissioners were split. Their discussions were couched in vague terms and they rarely compared one applicant directly to the other, but as they moved closer to choosing between Mohegan Sun and Wynn, it became clear there were significant differences among the four of them.

Commissioner Enrique Zuniga seemed to favor Wynn because of the company’s strong finances and the economic development potential of its proposed casino in Everett. But Commissioners Gayle Cameron and James McHugh kept talking up Mohegan Sun, in part because of Wynn’s refusal to address traffic issues in Sullivan Square the way they wanted. Commissioner Bruce Stebbins sat sphinx-like for most of the day.

The commissioners all agreed that a casino’s economic development potential – in terms of job creation and payments to the state – should carry the most weight in their deliberations. On that score, Wynn seemed to have a decisive edge because it is pledging to spend more on its casino, hire more people, and pay higher wages.

But McHugh raised concerns about the accuracy of some of Wynn’s numbers. He noted Mohegan Sun said it will employ 2,538 full-time-equivalent employees in its first year of operation, well below the 3,287 Wynn says it will employ. Wynn says it will pay those workers $51,773 in salary and benefits on average, compared to $39,144 at Mohegan Sun.

“How do we have confidence in the numbers we’re getting?” McHugh asked. Zuniga replied that he believes Wynn’s numbers are reliable.

McHugh and Cameron said it’s very possible that if Wynn wins the casino license, Suffolk Downs will shut down and the workers there will lose their jobs. Suffolk Downs, which is leasing land to Mohegan Sun for its proposed casino, has pledged to keep operating for at least 15 years if Mohegan Sun wins the license. Cameron said the loss of the Suffolk Downs jobs is a big deal for her, just as it was when the commission was considering a slots parlor license and settled on Penn National’s proposal for Plainville because that project would allow the harness racing track there to continue.

“It is saving an industry,” Cameron said. “We’re talking about preserving existing jobs.”

Zuniga acknowledged he backed Penn National for the slots license partly because the company pledged to keep the harness track going in Plainville. But he said he voted that way because the companies vying for the slots license were so evenly matched that the jobs at the harness track made a material difference. He indicated Wynn and Mohegan Sun aren’t as evenly matched.

Stebbins and Zuniga both noted a consultant’s report had indicated the number of jobs at Wynn’s proposed casino would exceed the combined jobs at Mohegan Sun’s proposed casino and the existing jobs at the Suffolk Downs racetrack. The report offered three estimates of jobs at Suffolk Downs, ranging from a low of 269 to a high of 800. But Cameron said those estimates of Suffolk Downs jobs focus only on jobs at the track itself and don’t include breeders, horse owners, and farmers who provide supplies to the track. “I look at this as a much bigger industry,” she said.

Zuniga also pointed out that McHugh voted against Penn National’s slots proposal, rejecting the need to preserve the harness racing jobs. McHugh said he hadn’t taken a position yet in regard to saving Suffolk Downs and merely wanted to make sure the commissioners debate the issue.

Last week, Zuniga raised serious concerns about Mohegan Sun’s finances and the marketing efforts of its proposed Massachusetts casino. Mohegan Sun tried to address those concerns by pledging to inject more equity into the project and by ensuring its proposed Revere casino would not be placed at a competitive marketing disadvantage compared to its other casinos in Connecticut, New York, and New Jersey.

Zuniga said Mohegan Sun’s proposals represented an improvement, but he still wasn’t satisfied. “There’s still a big difference in my opinion,” he said. McHugh disagreed, insisting Mohegan Sun may not have as much equity in the project as Wynn but that it had come a long way. The two went back and forth and finally agreed to disagree.

McHugh also pushed for more favorable ratings for Mohegan Sun on the head-to-head comparisons done by each of the commissioners as part of their overall assessment of the two casino proposals. McHugh had some success, but, even so, Wynn emerged with a slight edge in that category.

It was on traffic congestion at Sullivan Square in Boston where Wynn ran into its most serious problem with the commissioners. An estimated two-thirds of Wynn’s casino traffic is expected to travel through the already congested square. McHugh and Cameron wanted Wynn to take a major role in addressing the congestion, by ponying up 10 percent of the cost of a long-term solution up to a maximum of $20 million, by contributing $6 million toward short-term fixes, and by reducing casino traffic going through the square or face severe financial penalties. Wynn rejected all those proposals, although the company did offer to pay Boston millions of dollars more to help address the problem.

Wynn’s attitude didn’t sit well with Cameron and McHugh. “It isn’t just about a number,” said Cameron. “It’s about a real effort to reduce the number of vehicles going through a very congested area.”

McHugh, who lives in Charlestown, which abuts Sullivan Square, indicated the traffic issue could be a make-or-break issue for him. “I’m candidly very troubled by the approach,” he said of Wynn.

Zuniga said Wynn is in an awkward position. Boston Mayor Marty Walsh has accused the commission of being biased in favor of Wynn. Zuniga noted Boston has refused to negotiate with Wynn on traffic and other mitigation issues, suggesting the city may be refusing to negotiate because a deal with Wynn could jeopardize its mitigation agreement with Mohegan Sun. Mohegan Sun has agreed to pay Boston about $20 million a year, far more than Wynn has offered Boston. But Zuniga said a clause in Mohegan Sun’s agreement with Boston allows the deal to be reopened if Boston accepts a different deal with Wynn.

Zuniga suggested the commission pick an amount of money it wants Wynn to pay to help relieve congestion in Sullivan Square or impose its original proposal on the Las Vegas casino operator and tell him to “take it or leave it.”

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The proposal caught McHugh and Cameron off guard and the commissioners decided to take a brief recess to consider it. During the recess, Kim Sinatra, Wynn’s executive vice president, and former Gov. Bill Weld, who is representing Wynn, could be seen conferring with the general counsel for the Gaming Commission. Wynn officials said afterward that they wanted the commissioners to hear their views on the proposed licensing conditions rather than having the commissioners speculate about their plans.

Once the commissioners returned from their recess, they decided to do just that, asking the two applicants to come in Tuesday morning and explain their positions.