Two Members of Massachusetts Gaming Commission Resign While Stephen Crosby Investigation Continues

Last updated on November 2nd, 2018

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Two high-ranking gaming officials in Massachusetts have resigned. James McHugh, a member of the Massachusetts Gaming Commission and former state judge, plans on retiring effective September 28. Rick Day, an Executive Director on the Gaming Commission, is resigning. His resignation is set to go into effect after a scheduled vacation week next week.

Though James McHugh and Rick Day each released separate resignation memos this week, both me said they were resigning because they wanted to spend more times with their families. Each man has served on the Massachusetts Gaming Commission for the past three and a half years.

First Shakeup of Gaming Commission

The chairman of the Massachusetts Gaming Commission, Stephen Crosby, said that the resignations mark the first major change in the makeup of the organization in its history. The gaming commission was created in 2011, when Massachusetts voters approved casino gambling in the state.

The five commission members were appointed by the Massachusetts governor, attorney general, and treasurer. Massachusetts Attorney General Maura Healey is tabbed to select James McHugh’s successor. It was not announced who would choose Rick Day’s successor, though it has been announced that the Montana-native will stay on as a consultant with the commission in the foreseeable future.

Commission’s History of Controversy

Though the Gaming Commission is less than 4 years old, it has not been immune to criticism and controversy in its short time in operation. Chairman Stephen Crosby is dealing with an ethics investigation at the moment, after the commission awarded a casino license to the Boston-area suburb, Everett. The $1.6 billion casino was awarded to Wynn Resorts, but one of the men who sold the Everett real estate along the Mystic River had ties to Stephen Crosby.

State Ethics Probe

The State Ethics Commission announced on June 10 that it would investigate conflict of interest concerns in the awarding of the Everett casino to Wynn Resorts. The land where the $1.75 billion casino is set to be built was owned by Paul Lohnes, an old friend of Stephen Crosby’s who served with Crosby in the Massachusetts National Guard in the 1970s. The ethics commission is investigating charges that Crosby took several actions to favor the Wynn Resorts project, then broke a pledge to recuse himself from the decision.

In the fall of 2013, the Boston Globe brought to the public’s attention the link between Crosby and Lohnes. Crosby downplayed the closeness of their relationship, including the fact Lohnes bailed out Crosby’s failing publishing company in the 1980s. The two downplayed their relationship, though Paul Lohnes noted to investigators that the two had socialized at least 20 times since he made that loan.

Stephen Crosby’s Pledge

In October 2013, the commissioner recused himself from the decision on the Boston-area casino. Then State Ethics Commission got a sworn affidavit which charged that Stephen Crosby continued to deliberate on the casino approval process after he claimed he would no longer be involved. The person who signed that affidavit has never been revealed to the public, though only a handful of people would have been in a position to know that information.

The ethics probe is not the first time Stephen Crosby has faced charges he was biased. In 2014, it was learned he had attended an party at Suffolk Downs which he did not reveal, Crosby had recused himself from the Eastern Massachusetts license process. When Caesars Entertainment lost out in the early stages of the Boston licensing process, the Las Vegas gaming company filed a lawsuit against Crosby for bias.

Convicted Felon in Everett Land Deal

Eventually, it was learned that the Paul Lohnes group included a convicted felon who was alleged to have tied to organized crime. It was the investigation of that case which led to the August 2013 admission by Stephen Crosby (to investigators) that he knew Paul Lohnes. Numerous leaders and journalists questioned why Crosby had not revealed that connection when he learned about the Lohnes deal in 2012.

Marty Walsh’s Lawsuit

Boston Mayor Marty Walsh since has filed a lawsuit against Stephen Crosby, claiming inconsistencies in the licensing process. Walsh is known to dislike Steve Wynn and his lawsuit alleges that several decisions were made to favor the Wynn plan over a joint plan by Suffolk Downs and Mohegan Sun. In its defense, the Wynn project was set to pump $1.75 billion in the Boston economy, while the Suffolk Downs/Mohegan Sun plan was worth $900 million.

Stephen Crosby has been caught in lies along the way. In 2013, Crosby told the Boston Globe that he had not seen Lohnes for years. Last year, Crosby contradicted himself under testimony and said he and his wife had dined with Lohnes and his wife in May 2012. His credibility gap could be one reason for the State Ethic Commission’s probe.