Who will be left standing?
BOSTON — For the casino industry in Massachusetts, this year was a bit like the experience of a gambler during a long evening at the blackjack table: giddiness after early success, then despair after mounting losses.
Now a series of key rulings expected from state regulators in the coming weeks could shape the future of casino gambling for decades to come.
From January, when nearly a dozen would-be commercial casino and slots parlor applicants first threw in their chips, the field of hopefuls has gradually whittled away, largely because of a state law that gives local residents the absolute right to reject casinos proposed in their communities.
Voters in West Springfield, East Boston, Palmer and Milford exercised their veto power even after municipal leaders negotiated potentially lucrative revenue deals with developers. The rejections, coupled with the Massachusetts Gaming Commission’s insistence that gambling applicants clear stringent background checks, have raised the possibility that no company will be left standing by the Dec. 31 deadline for final bids to be submitted to the commission for the single resort casino licenses in the eastern and western regions.
It’s not a scenario that the panel’s chairman, Stephen Crosby, anticipates.
“We have every expectation that we will have at least one quality applicant” in both regions, Crosby said recently.
The first critical decisions facing the commission will come next month after completion of background checks on MGM Resorts International and Wynn Resorts, the only two resort casino applicants that won clear-cut support from voters in referendums this year.
Among other things, investigators are likely to be examining MGM and Wynn’s casinos in the Chinese territory of Macau. Both companies have faced allegations of improper conduct in connection with their business dealings in Macau, though both have denied wrongdoing.
Casino hopefuls must be found “suitable” by the commission before they can submit final applications.
MGM is the only company that submitted a preliminary application in western Massachusetts still in the running. In the eastern region, Wynn could face a challenge, pending another key decision the panel must make concerning Suffolk Downs.
The thoroughbred racetrack was dealt a split decision on Nov. 5 when East Boston voters said no to a casino while Revere voters said yes. That prompted Suffolk Downs to shift the proposed facility from a site mostly in East Boston to one entirely within Revere’s borders. The track also announced a partnership with Mohegan Sun, which had failed in its casino bid in Palmer.
Aside from drawing howls of protest from staunch casino foes in East Boston, the move has also raised a spate of legal and procedural issues that the commission must sort out, including whether another vote would be required in Revere — something that could not be done before the Dec. 31 deadline.
Commissioners understood that failed referendums and background checks would likely reduce the field, Crosby said, making the relatively robust group of initial contenders all the more important.
“We had such good competition that I think we are quite confident there will be people standing at the end of the day, and they will be qualified people and qualified proposals,” he said.
And if that is not the case?
The commission could reopen the regional application process, a move that might allow new companies to enter or ones rejected in previous referendums to perhaps seek more welcoming host communities. But the delay could push back by a year or more the timetable for resort casinos to open and begin generating revenue for Massachusetts, and also have an immediate impact on state finances.
The state’s budget for the fiscal year ending July 1 assumes $195 million in licensing fees — $85 million each for the resort casinos and $25 million for the single slots parlor, according to the Office of Administration and Finance. The total includes $20 million earmarked to repay funds borrowed from the state’s reserves to cover startup costs for the 2011 casino law.
Alex Zaroulis, a spokeswoman for the budget office, said the figures were developed from the gaming commission’s timeline for awarding licenses, “and that timeline has not changed.”
The $25 million for the slots parlor license seems a far safer bet at this time, with applications in hand from the Plainridge harness race track in Plainville, the former Raynham dog racing track and Cordish Cos. in Leominster. The commission could award the license — which allows for up to 1,250 slot machines but no table games — as early as Jan. 10.