Bloomberg News

Massachussetts Casino Ban Can Go on Ballot, Court Rules

June 24, 2014

Massachusetts’ highest court said a measure that would ban casino gambling can go on the ballot in November, putting plans for resorts in the state at risk just three years after gaming was legalized.

Massachusetts Attorney General Martha Coakley had declined to let the measure go to a vote. It would prohibit casino and slots-parlor gambling and certain wagering on simulcast greyhound races, according to today’s decision by the Supreme Judicial Court.

“We conclude that the attorney general erred in declining to certify, and grant the requested relief so that the initiative may be decided by the voters at the November election,” the court said, overturning Coakley’s decision.

Massachusetts legalized casino gambling in 2011 with plans calling for three resorts, each in a distinct part of the state, and one slots parlor. Casino applicants have faced local opposition across the state. Last year, voters in Milford rejected by a 2-1 margin a $1 billion resort proposed by a group including the owners of Connecticut’s Foxwoods Resort Casino.

Wynn Resorts Ltd. (WYNN:US) and Mohegan Sun of Connecticut have made separate proposals and are now vying for approval to build a Boston-area casino.

MGM License

MGM Resorts International (MGM:US) this month was awarded the state’s first casino license, for a resort in Springfield. Penn National Gaming Inc. (PENN:US) was awarded the slot parlor license in February for a location in Plainville. The Massachusetts Gaming Commission said today that it respects the high court’s decision and hasn’t taken a position on the ballot initiative.

“We have the flexibility to achieve progress in the licensing and regulatory process even in an atmosphere of uncertainty and we will continue to do so,” Steve Crosby, the commission’s chairman, said in a statement.

Michael Mathis, president of MGM Springfield, said the company is prepared to engage in a “statewide campaign to educate the voters on the enormous economic benefits that would be lost to the taxpayers of the commonwealth in a repeal.”

Las Vegas-based MGM has spent three years discussing with local residents the value of a casino “as a unique economic development catalyst,” he said.

Penn Parlor

Penn, which broke ground in March, may have the most to lose among the companies still pursuing Massachusetts casinos, Deutsche Bank analyst Carlo Santarelli said in a note today. The Wyomissing, Pennsylvania-based company will spend about $85 million through November on licensing, property acquisition and construction costs, he said. He said the company may spend another $5 million lobbying against the casino repeal.

Penn continues to proceed “full steam ahead” on the slot parlor, which is scheduled to open next June, said Eric Schippers, a spokesman for the company.

“While we are disappointed by today’s decision, we remain confident that Massachusetts voters will want to protect the thousands of new jobs and the hundreds of millions in annual tax revenues that our new industry will generate,” he said in an e-mailed statement.

Wynn spokesman Michael Weaver declined to comment.

Efforts to repeal the law allowing casinos began almost immediately after it was passed, according to a group advocating for the ballot initiative, Repeal the Casino Deal. The group says it opposes casinos and slots because of “long-term negative fiscal and social impacts.”

Dig In

“We’re elated at the opportunity to continue sharing the truth about casinos and the harm they would bring to our communities,” said John Ribeiro, chairman of the group, in a statement. “Now’s the time to dig our heels in and spread our message.”

Under the law, the state would get a licensing fee of at least $85 million for a resort casino and would receive 25 percent of gross gambling revenues, according to the gaming commission. The fee for the slot parlor is $25 million and it would pay 40 percent of its gross gaming revenue to the state, according to the commission.

While acknowledging that the initiative may put “substantial investment” at risk, the court said “the possibility of abolition is one of the many foreseeable risks” taken on by casinos, slots parlors and their investors.

The case is Abdow v. Attorney General, SJC-11641, Supreme Judicial Court of Massachusetts (Boston).

To contact the reporters on this story: Christie Smythe in Brooklyn at csmythe1@bloomberg.net; Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Andrew Dunn, Fred Strasser


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Companies Mentioned

  • WYNN
    (Wynn Resorts Ltd)
    • $199.68 USD
    • -0.83
    • -0.42%
  • MGM
    (MGM Resorts International)
    • $24.81 USD
    • -0.29
    • -1.17%
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