Casino Licensing Competition is Fierce in Boston and Hurdles Remain

Last updated on November 2nd, 2018

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With Massachusetts gaming regulators set to make a decision as to which companies will – and won’t – be receiving licenses to open Las Vegas-style resort casinos in the state early next year, jockeying among the competing companies has reached a fevered pitch, reports news web site MassLive.com.

The state’s rigorous regulatory process received a healthy dose of attention last week, after Caesars Entertainment was forced to walk away from a partnership agreement it had with East Boston’s historic Suffolk Downs racetrack, where the two companies proposed to build a $1 billion casino property.

Massachusetts gambling regulators are planning to issue one license for a slots only parlor in January, following in April with licenses for the larger resort-style casinos. One will be granted for the Boston area, and another for the Western part of the state.

Caesars felt the blow of stringent guidelines

Last week was a horrible week for Caesars Entertainment, with news surfacing that its Caesars Palace property in Nevada is under investigation by federal authorities on allegations of money-laundering, a fatal shooting occurring last Monday at another company-owed casino Las Vegas, Ballys, and of course, its not-quite-voluntary exit from the East Boston development plan.

Caesars was dropped from that proposal after routine, and apparently quite thorough, background investigations by Massachusetts officials flagged an investor in a redevelopment project that would have seen the old Bill’s Gamblin’ Hall on the Las Vegas Strip transformed into a western outpost of a tony New York hotel, the Gansevoort. That investor is said to have ties to Russian organized crime. Caesars promptly severed ties with the Gansevoort, saying last week that it will announce rebranding plans for Bill’s at a future time.

Suffolk Downs not abandoning project, referendum to move forward as planned

Meanwhile, a previously scheduled public referendum in which East Boston residents will have a chance to have their voices heard with regard to the Suffolk Downs casino plan is still going to be held on November 5, the day that citywide elections are set to take place as Bostonians will head to the polls to select a new mayor as long-serving Mayor Thomas Menino is retiring after twenty years due to ill health.

Under the terms of Massachusetts’ casino expansion law, passed back in 2011, municipalities must approve a so-called host agreement, which addresses issues relating to the construction and operation of a new casino, like potential for increased crime and traffic, tax rates, and carves out provisions to deal with problem gambling.

In addition to proceeding with the public vote, Suffolk Downs says that it will seek out a new casino partner, something it must do before it can be cleared by state regulators.

Speaking to the fact that Massachusetts isn’t afraid to deny licensing applications to well-established casino companies like Caesars that operate in many states across the nation, Massachusetts Gaming Commission head Stephen P. Crosby said last week, “I think people have understood that this is a methodical, complicated process, more rigorous at every level — local control, background checks, everything — more rigorous at every level than any other jurisdiction in the United States.”

For what its worth, both Caesars and representatives of the Gansevoort Hotel remarked last week that it took issue with the Gaming Commission’s findings, saying that it believed the state was being far too restrictive in its process.

Wynn, also vying for Boston permit, has yet to undergo background checks

Though Steve Wynn is also in the race to gain the sole Boston-area casino license, in the aftermath of the unravelling of Caesars’ plans for Massachusetts, he too said that the state’s gaming officials seemed to be setting the bar too high.

Background checks on Wynn have yet to be completed, this according to MassLive.com. If approved, the company intends to build a $1.2 billion resort whose design echoes that of the Wynn property in the Asian gaming mecca Macau. Incidentally, Massachusetts regulators said they will be closely looking into Wynn’s Macau business dealings as part of their background investigation into the company.