Rolling the Dice

Rolling the Dice

Coverage of casino licensing and the gambling referendum

You could even swim in the Mystic at Encore

You could even swim in the Mystic at Encore

Barren wasteland transformed into Shangrila

ADD SWIMMING TO THE LIST of ways you can get to the Encore Boston Harbor casino in Everett.

After a massive $70 million cleanup effort by Wynn Resorts, Everett Mayor Carlo DeMaria said the Mystic River in the area of the casino is now rated clean enough to swim in. “That’s never happened in the life of this property,” he said.

Actually, the quality of the water in the Mystic River has been pretty good for years. The water quality received an EPA grade of A-minus in 2015, 2016, and 2017. The rating for 2018 is due out next week, and isn’t expected to change.

What has changed is that the river bottom has been dredged – removing tons of debris and contaminated soil – and then capped with new sediment. The contaminated soil up on land, left behind when a Monsanto chemical plant was shuttered, has also been carted away and replaced. The combination of the two soil-removal-and-replacement efforts means swimmers won’t kick up contaminated soil on the river bottom or be affected by contaminated runoff from the land.

The site of the Encore Boston Harbor just as construction was scheduled to begin. (Photo by Bruce Mohl)

Patrick Herron, executive director of the Mystic River Watershed Association, which gathers water samples for the EPA, said before the cleanup he would have worried about swimming in the Mystic out in front of where the casino is located. Now, he said, those worries have disappeared.

“I feel confident in saying that’s a safe place to swim,” he said.

The environmental transformation of the site is perhaps one of the biggest benefits from the casino. What once was a barren wasteland fenced off from the public is now a Shangrila, a fanciful complex very different from anything else in the Boston area. The massive facility is surrounded by a brick walkway along the water that is accented by a riot of flowers, shrubs, art work, and, yes, artificial grass.

The public will gets it first look at Encore Boston Harbor Sunday at 10 a.m., when the complex opens with an unusual morning fireworks display. State highway officials said they are prepping for 100,000 people, but Robert DeSalvio, the president of Encore Boston Harbor, said he expects slightly more than half that number.

Officials gathered near the dock area on Wednesday to urge visitors to find ways to come to the casino without driving a car. The non-driving options include the T, shuttle buses, water shuttles, bikes, or just plain walking. (Swimming is not allowed, for now.) For full details, click here.

Boats sitting at the dock in front of Encore Boston Harbor. (Photo by Bruce Mohl)

A few of the traffic measures are interesting. To reduce congestion, Encore has created an area across from the resort where Uber and Lyft drivers can wait for a passenger request rather than circling outside the property. Some drivers have been complaining about difficult access on Facebook, but the concept seems promising.

DeSalvio said the resort’s water shuttles are 9 feet 6 inches tall, meaning they can fit under the nearby Alford Street Bridge even at high tide.  The cost of the shuttle from Long Wharf North and the World Trade Center is $7.

Everett police warned that parking in the neighborhoods near the casino won’t be allowed, triggering a $50 ticket and a tow.

DeSalvio said the crowds will probably be large on Sunday, but he said the company has thrown everything it can at addressing potential congestion. “All in all, probably one of the most comprehensive transportation plans ever put together,” he said.

Wynn has plan for traffic, but yachts could be problem

Wynn has plan for traffic, but yachts could be problem

$1m ad blitz planned to discourage driving to casino

ENCORE BOSTON HARBOR, which won approval Wednesday to open for testing next week, is plunking down big bucks to try to avoid exacerbating the region’s notorious gridlock when it opens in less than two weeks, but the Everett casino only has limited control over how people get there.

For instance, the casino’s three water shuttles are low enough to slip beneath the Alford Street Bridge linking Everett to Boston, but the resort on the banks of the Mystic River will also attract sailboats and big motor yachts from Boston Harbor on the other side of the bridge. The regulations governing the drawbridge call for it to remain down during weekday rush hours, but at other times it should open whenever a boat needs to get by, according to the US Coast Guard. When the bridge is up, that stops traffic along the busy stretch of Route 99.

“The larger yachts obviously that have towers or electronics that go up high do require a bridge opening,” said Bob DeSalvio, Encore Boston Harbor’s president.

On opening day June 23, the Coast Guard and law enforcement will limit the openings of the drawbridge to scheduled times – 6 a.m., noon, 6 p.m., 8 p.m. and 10 p.m. – after which it will resume its usual operations.

Encore Boston Harbor plans to spend $1 million to encourage visitors to travel by MBTA, Encore-operated bus shuttles, or the casino’s water shuttles instead of driving to the resort, according to DeSalvio. “With so many easy ways to get to Encore, why drive?” is the theme of the casino’s media campaign.

“People will be seeing this all over the place,” DeSalvio said.

The Encore Boston president also acknowledged that in the wee hours, Uber and Lyft drivers will probably handle the bulk of traffic from those leaving the casino.

“For the very late night hours, you’ll see a vast majority will go with rideshare,” DeSalvio said.

Encore Boston Harbor President Robert DeSalvio spoke to reporters before the Massachusetts Gaming Commission gave the casino permission to open for testing ahead of its planned June 23 grand opening. (Photo by Andy Metzger)

The casino’s buses to and from New Hampshire, Millbury, and Rockland are tentatively scheduled to end for the day at 10 p.m., and the Encore boats will stop service just before midnight. Shuttles to nearby T stations, and a “neighborhood runner” bus serving Everett and Chelsea will run around the clock.

After fining parent company Wynn Resorts $35 million and imposing a $500,000 fine on its CEO for how the entity handled sexual assault allegations against company founder Steve Wynn, the Massachusetts Gaming Commission in May granted Encore a permit to serve complimentary drinks to gamblers until 4 a.m. On Wednesday, the commission voted 4-0 (Commissioner Gayle Cameron was not at the meeting) to give Encore a provisional OK to open for testing next week. Encore will open for test runs on June 17, 19, and 20 with profits being donated to charity.

John Ziemba, the commission’s ombudsman, told the commissioners that Wynn Resorts has met the commitments it made to win a Massachusetts casino license. “In many instances, it has exceeded them,” he said.

Commissioner Eileen O’Brien was delegated to issue a temporary conditional operation certificate that would allow Wynn to open June 23 before receiving approval from the full commission.

Wednesday’s hours-long meeting gave the state’s gaming regulators a chance to go over the casino plans in sometimes painstaking detail before Encore Boston throws open its doors at 10 a.m. Sunday, June 23.

Transportation has been a nagging concern since well before Wynn Resorts won approval to build a $2.6 billion hotel and gambling palace just north of Boston. James McHugh, a former member of the commission, voted against awarding the license to Wynn because of concerns about traffic in surrounding communities.

Since Wynn first won the license in 2014, the bus area of the Sullivan Square MBTA station just across the river from the casino site has been overhauled, and the nearby rotary has been revamped with new bike lanes, crosswalks, and sidewalks.

Susie McDaniel, the vice president of human resources for Encore Boston Harbor, said Wynn is offering employees MBTA passes at a discount of 50 percent, or up to $50 per month.

Encore customers will be encouraged to use MBTA parking facilities in Medford, Malden, and Revere where there are currently a surplus of spaces, and where shuttles can deliver people from garage to casino.

According to T spokesman Joe Pesaturo, roughly 400 of the 1,335 surface parking lot spaces at Wellington Station are vacant on a typical weekday, and there are typically 200 to 300 MBTA spaces available at the nearby Station Landing.

While Encore is encouraging other means of travel, the casino will offer nearly 3,000 parking spaces on site with another 700 across the street, and at another lot elsewhere in Everett. The casino will have two Blue Bike stations and bike racks in a garage that can accommodate 192 bicycles, plus more bike parking for employees.

Construction of the retail spaces and landscaping is still ongoing, according to Joseph Delaney, the commission’s construction project oversight manager. It is possible that Encore may need to open under a temporary certificate of occupancy, but that is typical for a project of its size, according to Delaney.

The resort will feature 15 restaurants, 200,000 square feet of gaming area with slots and table games, and 671 hotel rooms, including a two-story residence that is 5,500 square feet.

When lawmakers passed the 2011 casino law, the state was just emerging from the Great Recession, but the unemployment rate has plummeted in the intervening years.

Of the nearly 5,000 people hired to run the casino resort, about 44 percent are women, which is less than the casino’s hiring goal; about 51 percent are minorities, which exceeds the goal; and 3 percent are veterans, which meets the goal.

According to DeSalvio, a little less than half of the workforce will be unionized, and the casino’s HR chief said a little more than 20 percent of the staff is part-time.

Betting notes: DeLeo wants floor vote on sports bill

Betting notes: DeLeo wants floor vote on sports bill

Should you be able to bet on Brad Marchand licking an opponent?

THERE ARE SCORES of variables for lawmakers to consider as they put together a regulatory scheme to legalize sports betting, but Speaker Robert DeLeo has already made up his mind on one important aspect of the pending legislation: there should be a bill brought to the House floor.

The speaker telegraphed his hope for a big standalone bill by keeping sports-betting language out of the House budget and a spokeswoman this week confirmed that his goal is to bring a bill to the floor for debate this session. That bill could open up a whole new way to gamble and a new revenue stream for the state. To see it become law, DeLeo will need cooperation from Senate President Karen Spilka, who has said little about where she stands.

Rep. Ann-Margaret Ferrante, the House chair of the Committee on Economic Development and Emerging Technologies, said that if the committee can find a way to surmount the often interlocking issues presented over two days of hearings on the topic, it will advance a bill.

“It’s something that we’re very open-minded about,” Ferrante said during a break in testimony on Tuesday. “If we can figure out how best to resolve those issues, and if we can resolve them in a way that makes sense, then we’ll see a bill.”

Even a major public health critic of state-sanctioned gambling who would prefer to keep sports betting out of bounds asked lawmakers to find ways to lessen the risks of the industry rather than block the legislation outright.

“To a certain extent I think this is a foregone conclusion,” said Mark Gottlieb, executive director of the Public Health Advocacy Institute at Northeastern University, after his committee testimony. “My concern is really that we try to mitigate the public health impact as much as possible.”

Sen. Eric Lesser, the co-chair of the committee, said he is still making up his mind about whether the state should allow sports betting and, if it does, how it should be done.

“We have basically two decisions to make. The first and the threshold decision is whether we want sports betting in Massachusetts legal. That’s a threshold question that has to be answered and has not yet been answered,” Lesser said after the hearing. “The second question is if we do decide that this is something we want to move forward with legalizing, what does it look like? How do we regulate it?”

Recent history

Long the exclusive domain of Nevada, legalized sports betting has spread to other states since New Jersey won a split decision by the US Supreme Court in May 2018. Since the ruling, about a half-dozen other states, including Rhode Island, have legalized betting on sports, according to ESPN.

With four major sports teams, an avid fan base, and a recent receptivity toward legal gambling, Massachusetts presents a potentially lucrative market for sports betting purveyors.

The ascent of DeLeo to the speakership more than a decade ago paved the way for the Bay State’s 2011 casino law. A heated debate surrounded that law as many voiced concern about societal impacts of casinos, including the financial duress that stems from gambling addiction. Voters helped settle those concerns and cement casino gambling’s place within the state when in 2014, by a 60-40 margin, they defeated a ballot question seeking to outlaw the as-yet unopened casinos. When Boston-based DraftKings rolled out an online platform for wagering on individual players through daily fantasy sports, Attorney General Maura Healey, who had supported outlawing casinos, sanctioned the novel form of gambling, which was then codified by lawmakers. A former professional basketball player, Healey has not taken a stand on the sports betting proposals.

“I’ve always been hesitant about expanded gambling because it creates real problems,” Healey said in a statement Wednesday. “Whether to introduce sports betting is a decision for the Legislature, but as Attorney General my job is to make sure consumers are protected and that will be my focus if this moves forward.”

Stakes

There is less money at stake for the state with sports betting than with casinos, and the ramifications extend beyond the craps tables and slot machines to some of the area’s most treasured institutions – its sports teams and players. A study conducted by Oxford Economics for the American Gaming Association estimated that Massachusetts could expect between $8.6 million and $61.3 million a year from legalized sports betting depending on the tax rate and the availability. By contrast, the state budget anticipates $249 million in gaming revenue in fiscal 2020 without any sports betting receipts. Gov. Charlie Baker has proposed a bill legalizing two forms of sports gambling – online taxed at 12.5 percent, and in-person casino wagering taxed at 10 percent. The annual tax haul from that proposal is projected at $35 million.

Amateur and college

One of the goals of Baker’s bill, according to Housing and Economic Development Secretary Mike Kennealy, is to move sports betting from the black market – often operated by Illegal, unregulated, offshore outfits – to a more secure market that state authorities would have more control over. But even though the NCAA basketball tournament is one of the biggest betting events, the governor’s bill would continue to prohibit wagering on collegiate or amateur sports, which Kennealy said is consistent with how Healey handled daily fantasy sports.

“We’re trying to take a prudent approach that’s still going to realize meaningful revenue. We feel like limiting it to professional-only sports is the way to go,” Kennealy said after his committee testimony. “I’ll give you one reason. There’s an age limit of 21 on placing a wager. You have college athletes that are under the age of 21. A little bit of a mismatch there.”

Even though they are huge draws for fans, NCAA athletes are unpaid, which could make them more susceptible to corruption through game-fixing.

Gayle Cameron, a member of the Gaming Commission, which would be tasked with regulating sports betting under the governor’s proposal, disagreed with excluding college sports from the legal betting market.

“Law enforcement professionals will tell you that you just keep the black market alive and well by not allowing college betting,” Cameron said. “I also believe that you have a better chance to protect college athletes by bringing some sunshine.”

In-game bets

Beyond what types of contests could be gambled on, lawmakers could also consider limits on what types of bets would be allowed, and whether they could include in-game (sometimes called prop) bets that hinge on a single variable not necessarily tied to the final score.

Real-time technology enables gamblers to bet on whether a basketball player hits the next free throw or whether an upcoming pitch crosses the plate, but both the players’ associations and the sports leagues have concerns about that type of wagering.

Mike Ouellet, counsel to the NHL Players Association, said certain prop bets should be banned, and he used a notorious Bruin to illustrate his point.

“A bet about whether Brad Marchand’s going to lick somebody in the third period should be off sides for more reasons than one,” Ouellet told lawmakers.

In addition to posing health and safety concerns, some in-game prop bets could be more conducive to corruption, Bryan Seeley, deputy general counsel for Major League Baseball told the lawmakers.

“Bets on the outcome of a single, controllable act – a bet on who commits the first foul in a basketball game or if the first pitch of an inning is a ball or a strike – are more susceptible to outside influence,” Seeley said.

But MGM Springfield CEO Michael Mathis, who hopes to offer sports betting in Massachusetts, said any limits on the types of wagers would just cede ground to the illegal operations.

“Anything that is a constraint on the free market is just going to create a situation where we’re not as competitive as the off-shore sports betting sites,” Mathis said after his testimony.

Online versus brick and mortar

Gottlieb, the Northeastern public health advocate who worries about the ill effects of more gambling, said lawmakers should restrict sports betting to physical locations, calling legalized online betting the “most pernicious element” of the sports betting bills before the committee. Gottlieb also favors a ban on credit card payments by sports gamblers.

But DraftKings, which was the first mobile sports betting operator in New Jersey, where mobile wagering accounts for 80 percent of the market, wants to be on the same regulatory footing as brick and mortar facilities like casinos.

“To fully realize the potential for mobile sports wagering, the legislation should allow mobile operators to receive licenses directly from the regulator rather than requiring partnership with land-based facilities, like casinos or racetracks,” said DraftKings CEO Jason Robins.

Mathis said that lawmakers should ensure that online gambling operators have a physical footprint or other assets in the state, saying major assets in-state represent the “ultimate enforcement tool.”

Lottery         

Treasurer Deborah Goldberg, who has fruitlessly pushed to put State Lottery products online for years, said that she doesn’t have a position one way or the other on whether the state should legalize sports betting, but if it does, the Lottery must be given authority to make sales online or else it will end up in financial trouble.

Goldberg also said she “would not be opposed” to offering sports bets through the Lottery, which is how Rhode Island introduced sports betting. But the Ocean State’s lottery’s sports betting operation has been a mixed bag so far. The state lost money on the New England Patriot’s Super Bowl win, and it has underperformed on revenue projections.

Multistate organizations such as MGM have the ability to spread risk across different properties, and DraftKings, which also lost money on the Super Bowl, can make use of bet-hedging facilities for sports books if needed, Robins said.

What to tax

Throughout the two-day hearing, Lesser and other members of the committee kept coming back to questions over whether the state should tax gambling operators’ revenues minus winnings – as the governor proposed and as has been enacted in other states – or whether it should impose a tax on the handle, which is all of the money wagered.

DraftKings and MGM both said they would prefer being taxed on the revenue. Mathis said taxes on the handle could mean that MGM owes taxes on what was a losing bet for the gambling operation.

Part of the appeal to Lesser on taxing the handle is that it would keep the state totally disinterested in the outcome of games. Bay State gambling outfits would presumably receive lots of bets on home-town teams, which means the state would not collect on home team wins under the model where the revenue is taxed.

Because the handle is a much larger figure than the revenue, Lesser concedes that the tax rate would need to be smaller than a similar tax on revenue.

Integrity fees

Sports leagues have tried – so far unsuccessfully – to convince states to impose a 0.25 percent tax on the handle, which they call integrity fees and which would then be paid to those leagues “as consideration for the leagues’ investment to create a compelling product, the risk to reputation and integrity that accompanies sports betting, and the increased expenses the leagues will incur to rigorously protect and police integrity,” as Seeley of Major League Baseball put it. The NBA Players Association supports this approach and would share in that revenue stream, according to Dave Foster, deputy general counsel to the association.

Bills filed by Rep. Dan Cullinane and Sen. Michael Rush include provisions for collecting and remitting to the leagues that tax on sports wagers.

“I can’t think of another place in our economy where one industry is able to profit to the tune of hundreds of millions of dollars on someone else’s product and pay them nothing, and put increased risk and cost on that, and that’s what sports betting is,” said Seeley. “They take our product; they create massive increased risk to us in the hundreds of millions of dollars; they create increased costs; and they pay us nothing. So we think it makes sense that a small percentage of casino revenue be paid to us.”

Data

One key piece of leverage that sports leagues hold over the betting operations that profit off of them is control over the official data.

Alex Roth, associate counsel for the NBA, said major sports betting operations will make use of official league data, which she called the “life-blood of sports betting.”

At DraftKings, Robins said, the company uses an “amalgamation” of data from different sources.

Roth said regulators could ensure that league data is priced at “commercially reasonable terms” but declined to give even a rough idea of what those prices are.

“We’re not discussing it in an open hearing,” Roth said.

Conflicts of interest

During the testimony Wednesday of top officials at the company that owns TD Garden – where the Celtics and Bruins play – lawmakers honed in on the potential for conflicts of interest where one person has a stake in a team and a gambling outfit.

Bruins owner Jeremy Jacobs is the chairman of the board of Delaware North, which owns the Garden, and chairman of the NHL Board of Governors. Delaware North representatives said they are interested in offering online sports wagering products.

“I’m seeing a conflict of interest,” said Rep. Ken Gordon, vice chairman of the committee and a former sports writer.

“We don’t think that Jeremy Jacobs should be able to bet on the Bruins. We do think, however, that arenas should have the ability to have a platform – whether that be something that’s operated therein or a third-party provider – have that ability to engage with their customers,” said McNeil, who said MGM owns an arena in Las Vegas as well as a WNBA team.

“I don’t see the guarantees. I don’t see the safeguards,” Gordon responded after Delaware North officials sought to downplay his concerns.

State House News Service reported that hours after the hearing ended on Wednesday afternoon, TD Garden President Amy Latimer said, “We do not want to operate the sports book, but we do want to partner with a mobile operator that will enhance the fan experience.”

Opposition

Les Bernal, the national director of Stop Predatory Gambling and the former chief of staff to casino opponent and former state senator Sue Tucker, provided the most outspoken opposition to legalization.

Legalized sports betting normalizes gambling and changes the way children view sports, Bernal told the committee, warning that bets would be made not just on traditional sports, but also on video games and television shows.

“This is a form of financial fraud that rips people off. You are designed to lose your money on these games whether it’s state lotteries, whether it’s casinos, and now potentially online sports gambling,” Bernal said after his testimony. “These games are rigged against you.”

The two days of hearings were well attended by committee members who appeared engaged and asked many questions of those who gave testimony, but Bernal was not asked any questions by committee members.

 

Wynn board pays $35.5m, brings saga to an end

Wynn board pays $35.5m, brings saga to an end

Disputes conclusions about Maddox, pays his $500,000 fine

THE WYNN RESORTS BOARD of directors said on Tuesday that it disagrees with a number of comments and conclusions about President and CEO Matt Maddox contained in a recent decision issued by the Massachusetts Gaming Commission, but to avoid a protracted legal dispute had gone ahead and approved payment of the $35 million fine imposed on the company as well as the $500,000 fine assessed on Maddox.

The board also said it will work with the Gaming Commission to implement the other conditions contained in the decision, including executive coaching for Maddox and the hiring of an independent monitor to oversee the company’s human resource policies, its use of non-disparagement agreements, and the hiring of outside counsel.

The announcement would appear to bring to an end the Gaming Commission’s lengthy investigation into the suitability of Wynn Resorts to retain its casino license in Massachusetts. That investigation focused on the alleged sexual misconduct of founder Steve Wynn and the company’s response to that misconduct. The decision issued by the Gaming Commission on April 30 allowed Wynn Resorts to retain its license as long as the fines were paid and other conditions were met.

The gambling company said it forwarded $35.5 million to the Gaming Commission on Tuesday, two days before the deadline for complying with the decision. Wynn Resorts reaffirmed it intends to open the Encore Boston Harbor casino in Everett on June 23.

In its decision, the five-member Gaming Commission said its vote to deem Maddox suitable was not unanimous. “Questions were raised as to Mr. Maddox’s sincerity, his genuine concern for the company workforce as a whole versus the bottom line, his ability to ensure that an effective human resources division and robust compliance program are in place, his adequacy in attention and diligence as to all matters at issue here, and his ability to communicate effectively as CEO,” the decision said. “The commission vetted these questions with care and notable concern.”

Ultimately, a majority of commissioners concluded that Maddox’s shortcomings were due more to issues of competence than suitability. In other words, he needs work on his skills as an executive but met the suitability standards of honesty, integrity, and good character.

In its statement, the Wynn Resorts board of directors did not specify which comments or conclusions about Maddox in the Gaming Commission decision it disagreed with, but said those comments and conclusions were not supported by the evidence.

“We would support [Maddox’s] decision to exercise his rights and appeal the fine imposed upon him, and believe he would rightly prevail in his appeal,” the board said. “However, that appeal would delay the final conclusion of this matter, and therefore we appreciate Matt’s decision to forego an appeal in order to allow closure for the company.”

The board added: “We believe Matt’s leadership has been, and will continue to be, essential in our transformation from a founder-led company to an innovative global corporation. Matt has created a more diverse, inclusive, and respectful workplace culture – all while maintaining focus on executing the company’s business plan.”

Encore president says casino will open on time

Encore president says casino will open on time

Regulators approve drinks for gamblers until 4 a.m.

THE TOP OFFICIAL at Encore Boston Harbor told state regulators on Wednesday that the Everett hotel and casino will open on schedule at 10 a.m. June 23. It will also be allowed to serve complimentary alcoholic drinks to active gambling customers until 4 a.m., thanks to a ruling by the Massachusetts Gaming Commission.

The opening plans announced by Robert DeSalvio put to rest all the hemming and hawing coming out of the Wynn Resorts corporate headquarters in Las Vegas, where President and CEO Matt Maddox had previously indicated the opening might be delayed by one or two weeks. He had also considered selling the casino to MGM Resorts, but those plans were dropped by both parties on Tuesday.

While the opening appears to be a go, there was still no word on when Wynn Resorts will comply with the terms laid out by the Gaming Commission for the company to retain its Massachusetts casino license – a $35 million corporate fine, a $500,000 fine on Maddox, executive coaching for Maddox, and an independent monitor who would set a number of human resource policies. All of the terms arose out of a lengthy investigation by the Gaming Commission into the company’s handling of Steve Wynn’s sexual misconduct.

Maddox earlier this month told financial analysts that he may challenge some of the “secondary and tertiary conditions imposed by the commission.” He said he did not think an appeal of some of the conditions would prevent the casino from opening.

At Wednesday’s meeting of the Gaming Commission, the vote was 4-1 in favor of allowing the casino to serve complimentary drinks to active gamblers from 2 a.m. to 4 a.m. The lone no vote came from Commissioner Eileen O’Brien. Boston officials had also urged a no vote.

Most of the commissioners approved the extended timing after being assured that protocols are in place for limiting alcohol consumption (no more than 1 ounce per drink and no more than three drinks per hour) and for monitoring to make sure no gambler has overdone it.

Law enforcement and Gaming Commission officials said there have been no serious problems so far at the MGM Resorts casino in Springfield, which has been serving alcohol to active gamblers until 4 a.m. since it opened.

Jacqui Krum, a vice president at Encore Boston Harbor, assured the commissioners that between wait staff, security officials, and video monitoring employees there will be lots of safeguards in place to check for over-consumption of alcohol.

“This building has eyes on it like nowhere else,” she said.

Talks over, Wynn now committed to casino

Talks over, Wynn now committed to casino

Firm ceases discussions with MGM Resorts

STATE HOUSE NEWS SERVICE

THE DISCUSSIONS between Wynn Resorts and MGM Resorts around a possible sale of the soon-to-open Encore Boston Harbor casino in Everett are over and Wynn Resorts says it is committed to its Boston-area project.

The two Las Vegas powerhouses had confirmed Friday that they were discussing a sale of the Everett property, a transaction that would have upended the still-developing Massachusetts gaming world. On Tuesday evening, however, each company announced that their talks ended without a deal.

“Wynn Resorts prides itself on the design, development, and operation of the world’s best integrated resorts. At times, world class assets attract the attention of others and our board takes seriously its fiduciary duty to review such interest,” the company said in a statement. “After careful consideration we have agreed to cease discussions with MGM Resorts.”

The Boston Globe reported that MGM Resorts in a statement said it “noted the anxiety raised by various stakeholders regarding a transaction and this troubles us at MGM. We only wish to have a positive impact on communities in which we operate. We think the best course of action is to discontinue discussions concerning this opportunity.”

Wynn Resorts, which still has not said whether it intends to pay the $35 million fine it owes to the Gaming Commission for the company’s failures related to sexual misconduct allegations against founder Steve Wynn, said in its statement that the company remains “committed to opening and operating Encore Boston Harbor as only Wynn Resorts is able to do.”

The $2.6 billion resort casino on a formerly contaminated peninsula of land along the Mystic River is due to open June 23, but the company must pay its fine and CEO Matt Maddox must pay his own $500,000 fine if that is to happen.

The Gaming Commission is scheduled to meet Wednesday morning in Boston to vote on a number of matters related to the opening of Encore Boston Harbor.

Why help only the Mashpee Wampanoag?

Why help only the Mashpee Wampanoag?

All tribes deserve same rights, including Aquinnah Wampanoags

IT HAS BEEN A GREAT WEEK for the Mashpee Wampanoag in their quest to open a tribal casino in Taunton.  The US House of Representative passed the Mashpee Wampanoag Tribal Reservation Reaffirmation Act by a vote of 275 to 146.  The act is designed to correct a flaw in the Indian Reorganization Act of 1934 and allow the Department of the Interior to take lands into trust on behalf of the Mashpee Wampanoag tribe.  However, there is another branch of the Wampanoag Tribe that has been marginalized for decades: the Aquinnah Wampanoag Tribe of Gay Head.

In the 1990s, the Aquinnah Wampanoag entered into a compact with the state via the administration of former governor William Weld to allow the tribe to open a modest high stakes bingo parlor on tribal lands on Martha’s Vineyard.  That compact called for the tribe to share revenue with the Commonwealth equal to 25 percent of gross gaming revenue generated by the facility.  That compact was never ratified by the Bureau of Indian Affairs, as it was deemed to be overly generous to the Commonwealth.  That situation was similar to that of the Mashpee Wampanoags with regard to their proposed Casino of the First Light in Taunton.  Their compact with the Commonwealth called for a 25 percent revenue share as well, but at the instance of the Bureau of Indian Affairs, that amount was decreased to 17 percent of gross gaming revenue.

It is there that the similarity ends.  Since the Aquinnah’s compact was never ratified, the administration of former governor Deval Patrick and the Massachusetts Legislature treated that agreement as a nullity.  They glibly argued the Aquinnah had waived their tribal sovereignty, and the right to conduct gaming, in the 1987 Aquinnah Land Claims Settlement Agreement, despite case law that stated that any waiver of tribal sovereignty could not be implied and must be expressly and knowingly made.  In addition, the Indian Gaming Regulatory Act, passed by congress in 1988, granted the Aquinnah the right to game on their reservation lands.

But the Aquinnah have been thwarted in their efforts by a lawsuit initiated by former attorney general Martha Coakley and continued by current Attorney General Maura Healey to deprive them of their legal right to game on their tribal lands and use that revenue stream for economic development and as a way to provide much needed services to members of the tribe.  An initial judgment in favor of the Commonwealth was overturned in a unanimous decision by the First Circuit Court of Appeals, which was allowed to stand when the US Supreme Court refused to hear the state’s appeal.

Now the attention of Congress will be focused on the Mashpee tribe, while Cinderella (the Aquinnah tribe) toils away in the scullery trying to open a small facility on their reservation lands on Martha’s Vineyard.  It is time for Cinderella to be invited to the ball.  Any legislation designed to remedy the Mashpee land-in-trust problem should be broadened to include a land-in-trust provision for the Aquinnah on the mainland as well and, indeed, all Indian tribes across the nation.

The quest for economic justice should not be reserved for a well-financed tribe that can afford to pay lobbyists to plead their case before the powers that be.  It must be aimed at helping both federally recognized tribes here in Massachusetts and all tribes across the nation so that they may be able to attain a level of economic self-sufficiency and fulfill the noble purposes of the Indian Gaming Regulatory Act.

Paul L. DeBole is an assistant professor of political science at Lasell College in Newton.

Wynn casino could open a week or two late

Wynn casino could open a week or two late

CEO says company may appeal Gaming Commission's secondary conditions

This story was updated at 9 p.m.

WYNN RESORTS CEO Matt Maddox told financial analysts on Thursday that the company’s Everett casino and hotel are on schedule to open as planned on June 23, but he indicated the opening could be delayed a week or two to make sure there are no loose ends.

“We’re going to make sure it’s flawless,” Maddox said of the opening. “We may give ourselves another week, maybe not, but the property looks good.”

A press release reporting on financial results for the quarter ending March 31 said “we expect to open Encore Boston Harbor in mid-2019.”

Maddox said 90 percent of the roughly 5,000 employees are either on board or within offer.

The CEO declined to provide any financial projections for the casino, but said Wynn operations typically have more expenses due to higher service levels. He also said regional casinos tend to ramp up more slowly, specifically saying the Everett facility will ramp up to full speed during 2019 and 2020.

Maddox said the company is still reviewing the conditions set by the Massachusetts Gaming Commission for Wynn to retain its casino license, but all his statements on Thursday’s phone call with analysts indicated he intends to agree to at least the major concessions. The Gaming Commission conditions include a $35 million company fine and a $500,000 assessment on Maddox.

“We are ready to move forward with the opening of Encore Boston Harbor,” Maddox said. “However, we are still reviewing the decision as it relates to some of the secondary and tertiary conditions imposed by the commission.  We do not believe if we choose to appeal that that will impact our ability to open the project at the end of June. The regulatory process has consumed a great deal of resources at both the company and with the regulators;  we are focused on opening this property within weeks and we feel very confident that it will be the nicest integrated resort on the East Coast.”

 

The Massachusetts Gaming Commission ruling required the company to hire an executive coach to help Maddox in several areas. Wynn Resorts would also need to hire an independent monitor selected by the commission. The monitor would need to stay on for at least three years and the company would need to adhere to the monitor’s recommendations on human resource policy, the use of non-disparagement agreements, internal reporting, and the hiring of outside counsel.

Wynn Resorts on hook for $1.3m in legal fees

Wynn Resorts on hook for $1.3m in legal fees

Tab for law firms defending Gaming Commission from Steve Wynn

THE MASSACHUSETTS GAMING COMMISSION paid about $1.25 million to five outside law firms defending the agency and one of its top employees in a lawsuit brought by Steve Wynn, but officials say the legal tab will be picked up by Wynn Resorts.

The invoices for legal work, released Friday in response to a public records request, indicated the Gaming Commission retained two law firms in Boston, two in Nevada, and one in New Jersey.

A spokeswoman for the commission said the costs will be paid by Wynn Resorts under a provision in state law that requires the state’s gaming licensees to cover the cost of any investigation by the agency.  A spokesman for Wynn Resorts confirmed casino licensees pick up all the costs of the Gaming Commission.

A Gaming Commission spokesman said the agency had not tabulated the total cost of its outside legal fees. The invoices themselves are difficult to sort out, so estimates could be off somewhat.

The tab for legal fees isn’t the only cost Wynn Resorts was hit with this week. The Gaming Commission on Tuesday said the company could retain its Massachusetts casino license if it paid a $35 million fine and if CEO Matt Maddox paid a $500,000 assessment.

The law firms were retained when Steve Wynn alleged last fall that Wynn Resorts illegally turned over documents to the Gaming Commission that were covered by attorney-client privilege. In November, Wynn sued the Gaming Commission; the commission’s chief investigator, Karen Wells; and Wynn Resorts. The suit was eventually resolved with the Gaming Commission agreeing to withhold some information covered by attorney-client privilege from its report on the suitability of Wynn Resorts to retain its Massachusetts casino license.

The two Boston law firms were Anderson & Krieger ($905,000 in invoices) and Rubin and Rudman ($121,000). The commission also retained local counsel in Las Vegas, where Steve Wynn brought his suit. Smith & Shapiro ($50,000) represented the commission and Hutchinson & Steffen ($166,000) was retained to represent Wells. Michael & Carroll, a firm from Point Pleasant Beach, New Jersey, was also retained, but its invoice for $9,000 were blacked out so it was impossible to ascertain what work it did.

What you need to know about the Wynn decision

What you need to know about the Wynn decision

Las Vegas firm has 30 days to pay $35m

The Massachusetts Gaming Commission issued its decision about Wynn Resorts Tuesday night. On Wednesday, commissioners took questions from the press. Here’s a Q&A  attempting to answer some of the questions around the decision.

Q: Is the Wynn Resorts casino in Everett going to open as planned June 23?

A: It looks that way. The Massachusetts Gaming Commission has demanded its pound of flesh – a $35 million fine on the company and a $500,000 fine on CEO Matt Maddox, plus a host of conditions – for the company’s handling of Steve Wynn’s sexual misconduct. Now Wynn Resorts has to decide whether it can live with the fine and the fact that the commission said the company’s CEO had a number of deficiencies that bear on his competency.

Q: Wynn Resorts has said it’s studying its options. Will the company pay up?

A: The company has little running room. They either accept the deal, go to court, or walk away. Accepting the deal seems the least risky option at this point, with the $2.6 billion casino/hotel nearly finished. There are other sunk costs, too. In a securities filing, Wynn Resorts listed the value of the Massachusetts casino license at $117.7 million, and noted that the license fee was $85 million.

Q: How fast does Wynn Resorts have to pay the fines?

A: It has 30 days

Q: The commission said in its report that it was split on whether Matt Maddox was suitable to remain as CEO. How did the five commissioners vote?

A: They wouldn’t say.

Q: Isn’t the Gaming Commission a public body?

A: “Our deliberations are private,” said Cathy Judd-Stein, the former Baker administration aide who now chairs the commission. She wouldn’t even say whether the commissioners took a formal vote on Maddox.  So it’s unclear whether the commission was split 4-1 or 3-2. Commissioner Gayle Cameron asked Maddox the toughest questions during an adjudicatory hearing in April, so it’s reasonable to assume she opposed his suitability. Gaming Commission Chairwoman Cathy Judd-Stein on Wednesday also deferred to Cameron when asked about the disagreement.

Q: What would have happened if Maddox was deemed unsuitable?

A: In that scenario, Wynn Resorts would probably have a more existential question to puzzle over. Maddox was credited by the commission with bringing an end to a toxic legal dispute that buffeted the company, hiring competent executives, and facilitating a smooth sale of Steve Wynn’s $1.4 billion in Wynn Resorts shares. He also has the backing of the new board chairman, Phil Satre, and is widely credited with building up the company’s casinos in Macau, which account for the bulk of the firm’s revenues.

Q: Did the commission figure out whether Steve Wynn is guilty of any of the allegations against him?

A: No. The commission steered clear of that question. Steve Wynn has been accused of sexual harassment and rape, and the commission confirmed the existence of more than a dozen women who were “alleged to have been subjected to some form of sexual misconduct” by him. But the commission totally bypassed the veracity of those particular accusations and instead focused on how Maddox and others at the company responded when they learned about them.

Q: Aside from the fines, what are the other conditions?

A: The ruling requires the company to hire an executive coach to help Maddox in several areas. While the company’s board would oversee that coach, Wynn Resorts would also need to hire an independent monitor selected by the commission. The monitor would need to stay on for at least three years. The company would need to adhere to the monitor’s recommendations on human resource policy, the use of non-disparagement agreements, internal reporting, and the hiring of outside counsel.

Q: Why did the commission have a problem with Maddox?

A: While there was disagreement among commissioners over whether Maddox was suitable, there was a consensus that he had some troubling failings as a leader. The commission was “unanimous in its concern that [Maddox] routinely failed to exercise the proper diligence, express the requisite level of concern, and understands the magnitude of the risk and legal implications associated with much of the information of which he was, or should have been, aware,” the commissioners said in their decision.

Q: What did the commission have to say about Elaine Wynn, Steve Wynn’s ex-wife, who was told in 2009 about a 2005 rape allegation?

A: The commission was more forgiving of Elaine Wynn than Maddox, though it did fault her for not directly informing the corporate board or regulators about the rape allegation against her ex-husband when she learned about it. Even when she referenced the allegation and settlement in a 2016 legal filing amid contentious litigation with Wynn Resorts, Elaine Wynn did not notify the commission about it. Elaine Wynn did notify several others of the allegation, and the commission found her testimony credible that she alerted Kim Sinatra about the allegation soon after hearing it herself. Sinatra, who declined to appear for the adjudicatory hearing even though she was subpoenaed, denied that Elaine Wynn told her about it in 2009. The commission also credits Elaine Wynn with bringing the 2005 rape allegation – which was mentioned prominently in the January 2018 Wall Street Journal expose that sparked the commission inquiry – to light. “[B]ut for the actions taken by Ms. Wynn in 2016, the 2005 allegations may never have been exposed,” the decision says.

Q: Is there much new in the commissioners’ ruling?

A: One new tidbit is that in addition to informing Sinatra and other company executives about the rape allegation, Elaine Wynn told Russell Goldsmith, who was a board member from 2008-2012. For whatever reason, Goldsmith’s name was not mentioned during Elaine Wynn’s adjudicatory committee testimony. At that time, Goldsmith was referred to simply as a board member. At the hearing, Elaine Wynn said he was “married to a very close and personal family friend whose family had a stellar reputation, and I was particularly concerned about that.”

Q: Anything else?

A: The ruling also discloses that even when Maddox was considering whether to fire Sinatra, he was “still considering whether to find another role for her within the Company.” The former general counsel ultimately left Wynn Resorts last year with a lucrative severance, granting her more than $9 million in cash and stock.

Q: How did the commission come up with the $35 million penalty for Wynn and the $500,000 fine for Maddox?

A: The commission only offered up the most basic reasons for the amount of the penalties. “The size of the fine is commensurate with the scope of the violations, and designed to be sizeable enough to have a meaningful impact,” the ruling said. It is intended to punish the company and also deter it from any future bad behavior. Commissioners didn’t let on any more than that when meeting with reporters Wednesday. While hardly cheap, the $35 million fine is a fraction of Wynn’s overall revenues. Wynn’s 2018 revenues from its properties in Las Vegas and Macau totaled $6.7 billion, and its operating expenses were $5.9 billion. There hasn’t been much change to the company’s stock price since the fine was issued Tuesday night, and it has gone up since the adjudicatory hearing.

Q: What is the financial impact for the state?

A: Commissioner Enrique Zuniga told reporters the fines would go into the gaming revenue fund. That fund has a range of beneficiaries, including transportation infrastructure, education, state reserves, local aid, public health, tourism, and the race horse development fund. If the casino opens as expected, more money is expected to pour into state coffers.

Q: How much revenue is the state expecting from gambling in the coming fiscal year?

A: The state’s total gaming tax revenues – from Encore, MGM Springfield, and the Plainridge Park Casino slots parlor – are projected to jump from $138 million in fiscal 2019 to $294 million in fiscal 2020, according to the Massachusetts Taxpayers Foundation.