Executives thwarted rival tribe for casino

Executives negotiating to open a lavish Mashpee Wampanoag casino in Middleborough last year simultaneously waged a very different effort just 40 miles away, spending millions to defeat a potential rival Indian casino in Rhode Island by warning voters of gambling's social and economic dangers.

The contrasts were sharp in their aggressive efforts to ward off competition.

In Massachusetts, the executives, Sol Kerzner and Len Wolman, have embraced the Wampanoag tribe and their bid to open a casino, even highlighting the "the injustices visited upon the tribe over the centuries." They have extolled the economic riches of a tribal casino with 4,000 slot machines and 180 gaming tables.

In Rhode Island, Kerzner and Wolman worked to thwart the economic dreams of the Narragansetts, a tribe with a history no less harsh than the Wampanoag. They spent $2.6 million on an anticasino referendum campaign - called Save Our State - which stoked fears among voters by warning of the negative consequences gambling would bring.

A retired State Police colonel in one television spot financed by Save Our State warned of the proposed casino's threat to schoolchildren. In another, the head of the Providence Performing Arts Center warned a casino would steal entertainment dollars from existing businesses.

The casino executives' divergent treatment of two Native American tribes, and their willingness to spend heavily on antigambling messages, illustrates how far developers will go to win casino rights worth billions of dollars.

It also demonstrates the intense competition in an industry dominated by deep-pocketed casino moguls, who are circling Massachusetts looking for prime spots in the wake of Governor Deval Patrick's proposal to open three resort casinos in the state.

Besides their proposed Middleborough project, Kerzner and Wolman had other economic interests at stake. They also own Twin River, a slot machine gambling facility and greyhound racing track in Lincoln, R.I. Keeping the Narragansetts and their investment partners at Harrah's Entertainment from opening a Rhode Island casino was crucial to their business interests, according to advocates of the Narragansett plan.

Looking back at last year's referendum campaign, Matthew Thomas, the longtime Narragansett chief sachem, said he believes his tribe was the victim of a "dirty deal."

"Do I like what they did to us? No," he said. "But they were smart businessmen. They basically saved their business interests. I have to give them credit."

When told Kerzner and Wolman cited the "injustices" suffered by the Wampanoag tribe in their push to open a casino in Massachusetts, Thomas chortled.

"They use whatever angle works for them - even the history angle when it might work," he said.

Wolman, based in Waterford, Conn., declined to be interviewed and requested written questions through a lawyer. In a written response to the questions, Wolman said through a lawyer that circumstances relating to the two tribes were entirely different.

"There is nothing inconsistent about support for a specific casino in Massachusetts that provides tremendous benefits and autonomy to [the Wampanoag], and participation in a coalition that educated citizens about an entirely different kind of casino," the response said.

A key distinction, suggested Wolman's statement, was that the proposed ownership arrangement for the Wampanoag casino is more favorable to that tribe than the Narragansett-Harrah's arrangement would have been, although ownership details of neither proposal have been made public.

Opposition to the Narragansett casino was also based on the potential loss of hundreds of millions of dollars in tax revenue, the Wolman statement said, because a new casino could have drawn gamblers away from Twin River, which pays a 60 percent tax rate to the state, roughly double what was expected at a Narragansett facility.

The Wolman statement pointed out that the state, as part of its deal with Twin River, promised to financially protect Twin River to some extent in the event of loss of business to competitors. "Twin River was not dependent on defeating the proposed Harrah's casino," it said.

Kerzner and Wolman had a lot of money riding on the 2006 Rhode Island referendum. They had purchased the faded Lincoln Park greyhound track and slot parlor for $445 million the year before and spent $220 million to renovate it and give it a new name.

Besides Twin River, Kerzner and Wolman own a substantial stake in Mohegan Sun, just 50 miles across the border in Connecticut. They helped develop the Sun in the late 1990s and are entitled to 5 percent of gross revenues - a nickel for every dollar spent there. Kerzner and Wolman's take in 2006 totaled approximately $80 million.

And finally, Kerzner and Wolman - at the time of the 2006 referendum campaign - were secretly working on the Massachusetts deal (which resulted in a 59-page contract, executed three weeks after the November election in Rhode Island).

The federal government recognized the 1,500-member Narragansett as a sovereign tribal nation 25 years ago, but the tribe remains on the casino sidelines, even as casinos operated by the Mashantucket Pequot and Mohegan tribes take in billions of dollars in Connecticut. Because of a 1970s land settlement, the tribe lacks the same federal status as other tribes and must win statewide voter approval for a casino; Rhode Islanders have repeatedly defeated casino ballot questions.

The Narragansett came into the 2006 casino fight well financed by Harrah's, one of the world's largest gambling companies. The tribe also came into the campaign enjoying the goodwill of a substantial portion of Rhode Island residents, who, according to participants on both sides of the debate, are sympathetic to the tribe's plight.

Thomas said the tribe - which proposed its development for a site in the economically depressed town of West Warwick - was not looking for a sympathy vote from the public. It wanted the opportunity to share in the casino boom other tribes have enjoyed.

But the tribe ran head-on into the well-financed Save Our State coalition, which included the state Council of Churches, the Greater Providence Chamber of Commerce, the state Hospitality and Tourism Association, the Providence Performing Arts Center, and the state branch of Common Cause, a national organization that advocates for open government.

Save Our State focused its opposition on Harrah's. It portrayed the casino proposal, which was to be located in West Warwick, as the work of a cabal of out-of-staters intent on dictating state policy, ignoring the Narragansett's deep local roots.

More than 62 percent of the funding of Save Our State's $4.1 million budget came from Kerzner and Wolman, according to Rhode Island state Board of Elections records. The second-largest backer, with 31 percent of the funding, came from the owner of Newport Grand, the state's other legal gambling business.

But a combined 93 percent of funding from gambling enterprises didn't stop the coalition from hammering away at gambling as immoral in advertising and in speeches by the Save Our State coalition's president, Lincoln Almond, the former Rhode Island governor.

"When you get into the casino industry, you are going to get all kinds of strange bedfellows," said the Rev. Eugene J. McKenna, a Catholic priest who founded an antigambling group in 1977 based on the belief that gambling causes a panoply of social ills.

McKenna's group remained outside the Save Our State tent.

"They were taking money from casinos and we oppose gambling and we wanted to keep pure, if that is the right word," he said. "We knew Twin River and Newport Grand were funding it to save their own gambling businesses."

The Rev. Donald Anderson, executive director of the Council of Churches, which represents 19 Protestant and Orthodox denominations in Rhode Island, said a heated internal debate preceded his organization's joining the coalition.

"Sometimes you make a choice that is the lesser of two evils," he said. "We realized others opposed the casino not for morally high reasons but for economic self preservation."

Kerzner and Wolman wrote checks totaling $1 million in the last 10 days of the Rhode Island campaign, and the anticasino campaign won easily, with 63 percent of the vote.

Some of Rhode Island's most skilled - and politically connected - campaign managers worked for the coalition. Timothy Costa, Governor Donald Carcieri's policy director before and after the referendum campaign, was paid $215,000 between August and December last year to manage the coalition, Rhode Island state Board of Elections show.

Costa did not respond to messages requesting information.

The coalition paid $17,500 to Joseph Larisa, the former chief of staff to Almond. The state Hospitality and Tourism Association paid him another $17,500 for his work for the coalition. Larisa did not return calls for comment.

With the Narragansett plan safely defeated, Kerzner and Wolman are vastly expanding Twin River, which has 4,750 slot machines and is seeking state approval to add electronic blackjack games and to stay open 24 hours a day.

The expansion plans include a 2,000-seat arena - the kind of facility that the Providence Performing Arts Center had feared would be part of the Narragansett-Harrah's proposal. Wolman said in his statement that expansion plans at Twin River predated the 2006 referendum.

Asked if he felt let down by Kerzner and Wolman because of the Twin River expansion, Anderson said he was "more disappointed than surprised."

Almond, an unyielding opponent of gambling, said he joined forces with Kerzner and Wolman "because it fit my agenda."

"I oppose any expansion of gambling and to oppose gambling, it takes money," he said. "Without the money from Lincoln Park and Newport Grand, we would have been in real trouble trying to stop the casino."

Sean P. Murphy can be reached at 617-929-7849 or smurphy@globe.com.