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Rocky rollout to era of Mass. casino gambling

More problems than progress in first 6 months

Steve Wynn, the Las Vegas casino mogul, hoped to build a resort casino in Foxborough but dropped his plans after residents elected gambling opponents to the town board of selectmen. (Wynn Resorts via AP) Steve Wynn, the Las Vegas casino mogul, hoped to build a resort casino in Foxborough but dropped his plans after residents elected gambling opponents to the town board of selectmen.
By Mark Arsenault
Globe Staff / June 3, 2012
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Once the Legislature finally approved Las Vegas-style gambling last November, after years of debate and near misses, many believed the hard part was over - and that the promise of thousands of jobs and millions in new state revenue would soon be realized.

But the first six months of the casino era in Massachusetts have been hampered by controversies and false starts, proving that little is easy when it comes to launching a new industry with billions of dollars at stake.

The casino law is under assault in federal court. The thorny issue of tribal gambling is expected to produce more litigation before it ever produces a casino. The state gambling commission had a public relations disaster over its first high-profile hire.

And although the gambling law was written to create competition among wealthy developers seeking to outdo each other in pursuit of coveted licenses, that bidding war has yet to fully develop, in part because of local opposition and also to a measure of apathy toward Massachusetts from some casino companies.

“It’s been a pretty rocky start,’’ said Roger Gros, publisher of Global Gaming Business magazine, which covers the industry.

The leader of the state gambling commission acknowledges that there has been a steep learning curve but rejects the notion that the casino development process has gotten off to a poor start.

“I think it’s gone really well,’’ said Stephen Crosby, chairman of the panel, known formally as the Massachusetts Gaming Commission. “It’s a huge undertaking to stand up a new agency from scratch.’’

With that, Crosby said, has come a recognition by the commission that controversy and criticism are as much a part of the casino business as cards and dice.

“We have to learn to be comfortable with the fact that controversy is inevitable,’’ Crosby said.

Lawmakers grumble privately that the people who appointed the commission - the governor, state treasurer, and attorney general - took too long to pick its members, which delayed the commission’s first meeting until April, nearly five months after the Governor Deval Patrick signed the legislation. Those lost months contributed to the sense that the rollout has been disappointingly slow.

The commissioners work full time, headquartered at 84 State St. - on the lucky seventh floor. With barely any staff hired yet, their working conditions are challenging: under the open meeting law, no more than two commissioners at a time can discuss their work at the office. Even the most mundane decisions must be debated in open public meetings.

In May, in an effort to smooth the day-to-day operations, the commission offered the job of interim executive direct to Stanley McGee, a Patrick administration official, who in 2007 was accused in Florida of child sexual assault. Though the allegation is unproven and McGee was never charged, the commission was accused of failing to properly vet an important hire, and McGee backed out of the job after several days of blistering media coverage.

“Obviously an intense three-day learning experience,’’ Crosby said of the McGee hiring.

Representative Joseph Wagner, a Chicopee Democrat and a key lawmaker in the development of the casino bill last year, recently rebuked Crosby for comments that suggested the commission might license fewer than three resort casinos and a slot parlor, the maximum number of gambling facilities allowed by law.

But Wagner was diplomatic in assessing the start of the state’s casino era. “Given how new this is - new to Massachusetts and to the people involved trying to shape it - it has the appearance of being a little bit of a bumpy rollout,’’ he said. “We’re only two months in with this commission; in that context I don’t have a lot of real complaints.’’

Crosby points out that during its brief tenure, the commission has hired lawyers and casino consultants to guide the state’s embrace of an industry that still makes many people uneasy. It also recently hired a full-time communications director; is looking for its first executive director; and is moving ahead with plans to prequalify potential developers, which should speed up the application process and provide a sense of momentum.

But most of the casino-related developments in Massachusetts since November have been out of the commission’s hands.

Casino companies have staked their flags on sites around the state, but those markers have not always stayed in place. MGM executives jetted in to announce their choice of tiny Brimfield for a resort, but then sheepishly backed out when they discovered the plans would not work on the site. Foxborough voters rebuffed a Las Vegas mogul, Steve Wynn, by electing hardened casino opponents to the board of selectmen. Wynn took the hint and dropped his plans for a gambling palace next to Gillette Stadium. He declines to say if he will try again someplace else.

And the casino company of the Boston-born billionaire Sheldon Adelson - a man comfortable betting on long-shots, as evidenced by his contribution of more than $10 million to support Newt Gingrich’s run for president - is passing on Massachusetts entirely, saying the state’s plan for three resorts will dilute the market.

Even without MGM - which has promised to find another site - Western Massachusetts appears to be a competitive market, with several companies interested.

But the Greater Boston region so far lacks competition. Suffolk Downs in East Boston, in partnership with Caesars Entertainment Corp., is planning to make a bid. Developer David Nunes says he will bid for a casino in Milford, but has not yet announced a financial partner.

State Senator Stan Rosenberg, an architect of the casino law, said it is too early to bemoan the lack of competition in Greater Boston.

“I don’t think the game is over,’’ Rosenberg said. “I believe there will be significant competition and there are significant players that have an interest in the market.’’

Casino development in Southeastern Massachusetts may be the most unsettled. The casino law walls off the southeast from commercial casinos to give a Native American tribe, presumed to be the Mashpee Wampanoag, the chance to develop a casino under federal law.

But the complex issue of tribal gambling, with its awkward blend of state and US laws, and the aspirations of other tribes, have muddled prospects in the region. Developer KG Urban, which wants to build a casino in New Bedford, has sued for the chance to bid in the southeast. The US District Court upheld the casino law’s provisions for a tribal venue, but the matter will be heard in Appeals Court.

Patrick is in negotiations with the Mashpee over a tribal casino in Taunton. But another tribe, the Pocasset Wampanoag, wants to torpedo the Mashpee’s plans, arguing the Taunton land the Mashpee tribe is claiming is far more historically connected to the Pocasset.

Yet another tribe, the Wampanoag of Aquinnah, has also requested casino negotiations with the governor, which Patrick has refused. The governor cited a longstanding belief among state officials that the Aquinnah have no rights to a tribal casino because of concessions they made to settle a land dispute in the 1980s. The Aquinnah disagree, and the matter seems destined for federal court.

Meanwhile, the Aquinnah have moved ahead with casino plans in Freetown and Lakeville and the tribe has warned it may open a high-stakes bingo parlor on Martha’s Vineyard as a fall-back, testing the state’s position that the Aquinnah cannot host tribal gambling. Freetown voters rejected the plan in a nonbinding referendum last week, and Lakeville residents voted Saturday by a 10-to-1 ratio against a proposal to build a casino in their town. (Story, B1)

The rollout of casino gambling in Massachusetts may have been “noisy,’’ said Clyde Barrow, a casino specialist at the University of Massachusetts-Dartmouth, but “despite everything that has gone on, I think it has been comparatively smooth.’’

Barrow said other states had far bumpier rollouts, such as Pennsylvania, which dealt with corruption allegations, and Maryland, which had trouble attracting bidders.

“I think it’s going to be a noisy process all the way to the end and probably afterwards,’’ Barrow said, “but the processes are working so far, and nobody has been indicted.’’

Mark Arsenault can be reached at marsenault@globe.com. Follow him on Twitter @bostonglobemark

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