Massachusetts Stamp

Wynn’s Winning Casino Bid, Suffolk Downs’ Closure

Massachusetts casino politics continue a tumultuous 2014 in the wake of last week’s awarding by the Massachusetts Gaming Commission of the coveted Boston-area casino license to Wynn Gaming.

massachusetts-stampWynn’s new Massachusetts entity (Wynn MA, LLC) emerged victorious after a week-long comparison of bids by the MGC between Wynn and its final competitor in the bidding process, Mohegan Sun, whose bid centered on a partnership with and renovation of Massachusetts’ historic Suffolk Downs horseracing venue.  In the wake of the announcement that Wynn’s bid and plans for a $1.6 billion complex in suburban Everett was accepted, Mohegan Sun immediately announced closure plans for the aging Suffolk Downs facility.

The 3-1 vote by the MGC to accept the Wynn proposal might have finalized the bidding process for the coveted “Regio A” license, for the eastern part of Massachusetts including Boston, though the in-fighting among the three primary bidders and accusations about alleged improprieties by the MGC’s chairman continue to make the story front-page news, as does an approaching November referendum in the state which, if approved, would make all the state’s newly minted casino licenses moot.  (The “no” vote, translating to allowing the casinos to open as scheduled, continues to lead in ongoing Massachusetts voter surveys.)

Suffolk Downs will receive a $300 million settlement package from Wynn in exchange for going out of business, but fired off angry words at the state’s gaming commission.  According to a press statement, Suffolk Downs CEO Chip Tuttle said, “We are extraordinarily disappointed as this action is likely to cost the Commonwealth thousands of jobs, small businesses, and family farms. We will be meeting with employees and horsemen over the next several days to talk about how we wind down racing operations, as a 79-year legacy of Thoroughbred racing in Massachusetts will be coming to an end, resulting in unemployment and uncertainty for many hard-working people.”

“This is one of those cases where the Gaming Commission’s actions speak louder than their words,” added Tuttle. “For the family of workers here, this feels like empty posturing.”

Tuttle also cited the expected loss of jobs for thousand of Suffolk Downs racetrack workers.  “The Commission’s actions Tuesday made clear how little value they place on these jobs and these people,” he said.  “That message, while unfortunate, has been received loud and clear by the hundreds of decent hardworking people here now facing unemployment and uncertainty.”

Mohegan Sun even filed a formal complaint against the MGC last Monday, asserting that Wynn had been giving preferential treatment in addressing shortcomings in the initial bids.  According to the Mohegan Sun complaint, “By allowing Wynn to introduce new conditions when the Commission – in its statements setting up the discussion and in its “process” document that it adopted after careful discussion at a prior meeting – indicated that it was only looking for clarifications, the Commission changed the rules midstream and applied those rules to the benefit of only one applicant,” referring to Wynn.

Nonetheless, the commission shelved the complaint and awarded the license to Wynn the following day.  In addition to the public complaints, Suffolk Downs then clarified its closure plans: live thoroughbred racing at the track will end abruptly on Sunday, with simulcast wagering available for another three months but ending in December.

The state’s gaming commission rated the Wynn bid “very good / outstanding” while notching the Mohegan Sun / Suffolk Downs bid a notch lower, at “very good,” before conducting the final vote.  Perceived riskiness inherent in the Mohegan Sun / Suffolk Downs investment package was one factor cited by the commission, as was a possible inadequacy in fully exploiting the eastern Massachusetts marketing opportunity made available via the casino license.

For its part, Wynn had to overcome a couple of mitigating issues before receiving final MGC approval, including agreeing to financial compensation to help correct expected traffic problems in downtown Boston’s Sullivan Square, just across the Mystic River from the casino’s planned site.

The new casino, when complete will include a 500-room hotel complex with conference capabilities in addition to the casino itself, which is slated to offer 3,000 slots and 150 table games.  A 25-table poker room is slated to be part of the facility.

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