Gaming Commission backs off oversight of Everett entertainment complex

Says regulation unnecessary as long as certain conditions are met

THE MASSACHUSETTS GAMING Commission indicated on Thursday that it will not require a proposed entertainment complex across the street from Encore Boston Harbor to be subject to the commission’s regulatory oversight as long as Wynn Resorts agrees to address the commission’s concerns about the Everett project.

Officials from Wynn indicated they would be receptive to those terms. They want to avoid the additional regulatory oversight and costs that would come with commission oversight, particularly given their current plan to lease much of the property to third parties.

Wynn is seeking to build bars, restaurants, an event venue, a parking garage, and two hotels on the property, which would connect to Encore Boston Harbor via an enclosed pedestrian bridge across Broadway.

During their deliberations, members of the commission rejected some of Encore’s contentions that the proposed development would have very little connection to the casino. But, overall, the commissioners said they felt the proposed development should not be treated as part of the gaming facility and should not be subjected to the Gaming Commission’s regulatory scrutiny.

Cathy Judd-Stein, the chair of the commission, said she did not want to impose any negative impact on Wynn Resorts as long as the company’s project meshed with the broader economic development goals of the state’s gaming law. “I don’t want to be an obstructionist,” she said.

The outcome would give Wynn Resorts what it wants, spur economic development in Everett, and offer protections sought by nearby theater operators as long as Wynn agrees to the conditions being crafted by the Gaming Commission.

The resolution probably could have been reached sooner if Wynn Resorts had been more straightforward in its approach. For example, an earlier project plan called for an 1,800-seat event venue, which would have put it in violation of the state gaming law if the property was deemed part of the casino. The state gaming law bars casinos from constructing event venues with 1,000 to 3,800 seats to shield mid-size theaters from having to compete against a theater backed by gambling revenues. Once concerns were raised about the proposed venue size, Wynn Resorts pulled the plan back and reduced its seating capacity to no more than 999 seats.

In its presentation to the Gaming Commission on February 10, Encore Boston officials went to great lengths to say the new entertainment complex would be distinct and separate from the casino. They said the entertainment complex would be owned by a separate company and “the hotels, restaurants, events center, parking garage, and utilities do not enhance Encore’s gaming area by making the entire facility a more attractive destination.”

Those arguments were undercut when Craig Billings, the CEO of Wynn Resorts, told financial analysts five days later that the new development would help drive growth at Encore Boston, in part because the new 2,310-space parking garage would help alleviate parking constraints at the casino.

The commissioners went through a four-step process of evaluating whether the new development should be regulated as part of the existing casino. They concluded the entertainment complex would meet two of the requirements — that the complex would enhance the business of the casino and that the new complex is controlled by the same company that owns the casino. The casino and the proposed entertainment complex are owned by separate limited liability companies, but both firms are subsidiaries of Wynn Resorts and Wynn CEO Billings would be an officer of both.

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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 commissioners held that the proposed pedestrian pathway connecting the new entertainment complex and the casino was not a gaming structure under state law, as long as safeguards were instituted to make sure that no one could pass unimpeded into the casino from the walkway. Wynn has agreed to build a new stairway on the casino side of the bridge to allow non-casino patrons to walk down to the first floor and away from the gaming floor.

The commissioners also agreed that they had no strong interest in regulating the new entertainment complex as long as Wynn agreed to limit the size of the event venue to no more than 999 seats; to address concerns about security at the new complex, particularly in the parking garage; and to comply with a series of other more minor measures.

Staffers for the Gaming Commission said they would draft a series of conditions that Encore Boston and Wynn Resorts would have to agree to. If that happens, the full commission intends to take a vote authorizing the entertainment complex to move forward without regulatory oversight from the commission.