Gaming commission gives ‘slight edge’ to Wynn over Mohegan Sun
Archives For Suffolk Downs
Vote decided fate of $1.3B casino plan
REVERE, Mass. — Voters in Revere approved a resort casino proposal on Tuesday, keeping alive Mohegan Sun’s $1.3 billion project and setting the stage for a competition with Wynn Resorts for the sole eastern Massachusetts resort casino license.
Unofficial returns showed more than 63 percent of city voters backing the casino, which would be built on land owned by the Suffolk Downs, said Mitchell Etess, chief executive of the Mohegan Sun Tribal Gaming Authority.
Etess told jubilant supporters at the racetrack that he now expected to convince state gambling regulators to award the Connecticut-based firm the license.
“We’re going to win this license because our application to Massachusetts is unconditional,” Etess said. “We are ready to go.”
It was the second casino vote in Revere in recent months. In November, voters approved an earlier proposal from Suffolk Downs on the Boston-Revere line, but voters in the East Boston neighborhood rejected it. The new plan puts the proposed casino entirely in Revere.
Strong feelings were evident on both sides in the blue collar city of about 53,000 residents just north of Boston. Home to Revere Beach, the nation’s first public beach, the city has struggled economically in recent decades and had an estimated unemployment rate of 7.2 percent at the end of 2013, according to state figures.
Along a section of Broadway, one of the city’s main arteries, casino backers and foes held signs during the day Tuesday on opposite sides of the roadway, near a polling place. Motorists would occasionally honk horns to signal support for one group or the other.
Kevin Russell, a Revere resident and union carpenter, said the casino would be a “win-win” for the city, with the potential to create new jobs and generate revenue that would lead to lower property taxes and water bills. He dismissed critics’ concerns that the facility could bring an uptick in crime.
“They’re not going to build a billion-dollar casino to have bad elements there,” said Russell. “They want to bring in the good element with people coming from out of state, flying in, driving down.”
Members of Revere’s clergy came out strongly against the casino in recent weeks, citing the dangers of gambling addiction and other social ills.
“It’s a slayer of souls,” said the Rev. George Szal, of the Immaculate Conception Roman Catholic Church, as he held a sign urging a no vote. “It’s a slayer of families and ultimately of the community itself.”
Mayor Dan Rizzo said the casino would secure the city’s economic future for generations, pointing to a host community agreement with Mohegan Sun that would guarantee Revere up to $33 million in upfront payments and between $25 million and $30 million in annual payments if the casino was built.
“Today Revere said yes to Mohegan Sun,” Rizzo said. “Today Revere said yes to jobs. Today Revere said yes to better schools and safer streets.”
The victory also keeps alive, at least for now, the future of racing at Suffolk Downs. Officials at New England’s only thoroughbred track have said they will almost certainly be forced to end racing if the casino license is not awarded to Mohegan Sun.
“Second chances are a great thing in life,” said Chip Tuttle, chief operating officer of Suffolk Downs, which almost saw its hopes dashed with the defeat in East Boston in November.
Tuesday’s vote was also a reversal of fortune for Mohegan Sun, which saw an earlier Massachusetts casino proposal rejected by the town of Palmer.
Wynn Resorts has proposed a $1.6 billion resort casino in Everett, barely three miles from the Revere site.
The gaming commission on Tuesday separately began final deliberations on the awarding of the license for the only slots parlor – a smaller type of casino – that is allowed under the state’s gambling law. The panel is choosing between proposals in Leominster, Plainville and Raynham, with a decision expected by Friday.
Mohegan Sun, Wynn Resorts submitted applications Tuesday
BOSTON —Three companies seeking state licenses to build resort casinos in Massachusetts have filed final applications with the state gaming commission.
Mohegan Sun and Wynn Resorts, both vying for the only eastern Massachusetts resort casino license, submitted their detailed applications on Tuesday, the deadline set by the panel.
Mohegan Sun’s proposed a $1 billion facility in Revere still requires a favorable vote by city residents in a Feb. 25 referendum.
Wynn has proposed a $1.2 billion resort in Everett.
MGM Resorts International, the only western Massachusetts applicant, submitted its more than 7,000 page application on Monday.
The commission will now spend several months reviewing the submissions, with licensing decisions likely in late May or June.
The panel has established several criteria for evaluating applications, including economic development, finances and design.
State clears Wynn for $1.2B resort casino in Everett
Company found suitable after background check
State gambling regulators on Friday cleared Wynn Resorts to continue its pursuit of a proposed $1.2 billion resort casino outside Boston.
The five-member Massachusetts Gaming Commission said in a unanimous decision that Wynn had provided “clear and convincing evidence that it meets the standards for suitability,” under the panel’s guidelines for would-be casino operators.
The commission’s investigative arm had previously recommended that the company, run by Las Vegas casino mogul Steve Wynn, be found suitable for gambling after a lengthy background check that included a review of Wynn’s operations in the Chinese territory of Macau and issues surrounding a land deal Wynn negotiated with the owners of the proposed casino site in Everett.
Wynn did not immediately comment on Friday’s ruling, which clears the way for the company to submit a final casino application to the commission by the Tuesday deadline, though it does not guarantee the company will be awarded an operating license. It may be in competition with Mohegan Sun, which has proposed a casino on land owned by Suffolk Downs in Revere, for the sole eastern Massachusetts resort casino allowed under state law.
In its written decision, commissioners praised Wynn Macau for establishing policies and protocols for so-called junket operators and overall “responsible business practices” in the world’s most lucrative gambling market.
Junket operators recruit from the mainland for gambling in VIP rooms in Macau’s casinos, often providing credit to players. They have gotten the attention of regulators because of alleged connections to organized crime.
The commission’s Investigations and Enforcement Bureau flagged concerns about a potential hidden ownership interest in the Everett site, a former chemical plant along the Mystic River, and has turned over its findings to state and federal prosecutors.
The panel earlier in the month approved a revised real estate deal that would substantially lower the original $75 million price Wynn had agreed to pay for the land while ensuring that no one with an undisclosed interest in the property would benefit from the sale.
Investigators said there was no evidence Wynn knew of the issues prior to the initial land deal and worked quickly to resolve the matter once it arose.
“While it could be argued that (Wynn) did minimal due diligence on the ownership of the land when it first executed its option, it is clear that once (Wynn) was made aware of the IEB’s concerns … it took immediate action to cure the situation,” the commissioners wrote in their decision.
Stephen Crosby, the commission’s chair, recused himself from the land deal vote because a friend and one-time business partner is among the co-owners of the property. But Crosby did participate in and sign the suitability decision, and has said he plans to be fully involved in the eastern Massachusetts licensing process.
Mohegan Sun won a favorable suitability determination earlier this year and was given permission to submit its application on Tuesday pending approval by Revere residents in a Feb. 25 referendum. The Revere-only casino plan emerged after East Boston voters rejected an earlier proposal by Suffolk Downs for a casino on the Boston-Revere border.
Revere voters will cast ballots again on casino proposal
REVERE, Mass. —Officials from Mohegan Sun and Suffolk Downs were in Revere on Monday to discuss details of a host community agreement for a resort-style casino there.
It would guarantee the city $33 million in upfront payments and at least $25 million in annual payments if a casino is built entirely within the eastern Massachusetts city.
State gambling regulators cleared the way last week for a vote on a Revere-only casino plan by waiving a requirement that Mohegan Sun have a referendum and submit results by Dec. 31.
An earlier proposal for a development on the Boston-Revere border was rejected by voters in East Boston.
Mayor Daniel Rizzo says he’s confident voters in his city will back the revised plan. It would likely compete for the sole eastern Massachusetts resort casino license with a plan by Wynn Resorts for Everett.
Refers findings of hidden ownership to law enforcement
In a key vote that keeps Wynn Resorts in the hunt for the state’s most lucrative casino license, the Massachusetts Gaming Commission today voted 4-0 to approve a revised land deal between Wynn and property owners in Everett.
The vote includes the requirement that the partners who control the land through FBT Everett Realty LLC sign notarized statements that they alone are the beneficiaries of the $35 million deal with Wynn, a demand added by the commission after its investigators learned of an alleged hidden interest in the property for convicted felon Charles A. Lightbody.
“It’s intolerable for people to tell us things that are not true,’’ Commissioner James McHugh said before the vote, referring to Lightbody’s hidden role.
Lightbody repeatedly discussed his plans to conceal his role in the Everett property with Darin Bufalino, a long-time organized crime figure now serving a state prison sentence, according to state records.
The connection between Lightbody and Bufalino is included in a sheaf of documents released today by the commission before its vote on what a commission staffer described as “one of the most complex and convoluted fact patterns to put on paper.’’
While raising questions about the true ownership of the Everett property, the commissioners also said that there was “no evidence whatsoever’’ that Wynn Resorts officials knew about hidden ownership in the Everett property.
According to documents released by the commission today, investigators recorded a series of phone conversations in late 2012 between Lightbody and Bufalino, the enforcer for a crime family, in which the men discuss Wynn’s planned purchase of an option to buy the land in Everett.
Though Lightbody was not a listed partner with the land owner, FBT Everett Realty, documents provided to gaming commission investigators showed Lightbody was an undisclosed partner in the 29-acre property.
On Dec. 5, 2012, as Wynn is negotiating the deal, Lightbody assures Bufalino that “we’ve got Steve Wynn in our corner … We took on Wynn, now Wynn is supposed to start paying up $100,000 a month December 14.”
A week later, Lightbody tells Bufalino he’s waiting for Friday because “Friday is the day that they sign or they don’t sign,” referring to the land deal between FBT and Wynn.
Lightbody, who has a lengthy criminal record, tells Bufalino that Wynn can’t sell the land to a felon, “but the only good thing is, nobody knows who’s involved which makes it good because now I can just move on, you know what I mean? So basically they’re going to buy me out.”
In its report, commission investigators said they believe that Lightbody had a 12.5 percent ownership stake at the time of the deal with Wynn. Paul Lohnes, a former business partner of Commission Chairman Stephen Crosby, had a 50 percent stake followed by Anthony Gattineri (15 percent); Gary DeCicco (19.5 percent) and Dustin DeNunzio (3 percent).
The surviving partners of FBT Everett Realty are Lohnes, Gattineri and DeNunzio, records show.
The commission said that Lohnes, Gattineri and DeNunzio do not have criminal histories. DeCicco was convicted of insurance fraud and forgery, but was acquitted of arson, according to the board.
Crosby has recused himself for having any role in the review of the Everett land deal, not the casino licensure.
Wynn chose the Everett site in late 2012, after local opposition in Foxborough persuaded him to give up plans to build a casino near Gillette Stadium. The developer said he liked the Everett parcel, a contaminated former Monsanto chemical site, for its proximity to the Mystic River and for the skyline views of Boston.
Wynn signed an option to buy the land a year ago, and last June Everett voters overwhelmingly endorsed Wynn’s plans to develop a $1.3 billion casino hotel at the site. Wynn had originally offered to pay about $75 million for land that FBT Everett Realty LLC bought in 2009 for little more than $8 million, according to people familiar with the deal.
But state casino investigators reviewing Wynn’s option deal as part of the company’s mandatory background check raised concerns that undisclosed partners may have a stake in the land. The Globe reported last month that a federal grand jury and other agencies are investigating whether Lightbody, a Revere businessman with a long criminal record, had a role as a secret investor who stood to collect a windfall if Wynn bought the parcel.
To address the concerns of investigators, Wynn Resorts rewrote the sales agreement for the former industrial land, slashing the price the company will pay if the casino is built to minimize the possibility that any undisclosed partners could benefit from a gambling business.
Kim Sinatra, general counsel for Wynn, told the commission today that the new price has been cut to $35 million, with $10 million of that to be used to cover the costs of environmental clean-up.
On Wednesday, another gambling company, Caesars Entertainment, filed a federal lawsuit against Crosby, accusing him of discriminating against the company because he was predisposed to favor the Everett project that would benefit Lohnes.
Caesars was dropped from a rival project at Suffolk Downs in October, after commission investigators issued an unflattering background report on the company.
Crosby and the commission say the lawsuit is “without merit.”
Wynn Resorts is expected back before the commission on Monday, to review the results of the full background check on the international company.
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Las Vegas gambling giant Caesars Entertainment has filed suit in federal court against Massachusetts gambling commission chairman Stephen Crosby, in part over Crosby’s link to a landowner who stands to benefit from an Everett casino project.
Caesars was a partner with Suffolk Downs in a $1 billion casino venture at the East Boston racetrack, but was dropped from the project in October over concerns that the company would fail its mandatory state background check.
Now the company is “challenging the constitutionality, objectivity and fairness of the treatment of Plaintiffs by Stephen P. Crosby, individually and as Chairman of the Massachusetts Gaming Commission, due to, among other things, Chairman Crosby’s conflicts of interest and his failure to timely disclose them,” according to the lawsuit filed in US District Court in Boston.
Crosby, who has led the five-member commission since it was created in 2012, has said he has known Paul Lohnes, co-owner of the 29-acre Everett site, since the two were in the National Guard in the 1970s, and that they were business partners from 1983 to 1990 at a company that made cable television guides, the Globe reported.
The Globe also reported that in 1983, Lohnes invested in Crosby’s former company when it was struggling, according to W. Alan Vandenburgh, Crosby’s former partner. Lohnes became treasurer of the company, which went on to become the country’s second largest producer of cable television magazines. Business ties ended in 1990 when the company, known as Crosby Vanderburgh Group, was sold.
Caesars’ experience in Massachusetts was a debacle for the company.
After working on the Suffolk Downs project for two years, and having spent millions on the venture, according to the lawsuit, the company ran afoul of commission investigators during the mandatory state background check.
Investigators raised several red flags, including that Caesars had signed a licensing deal with a hotel chain owned in part by a businessman allegedly tied to Russian mobsters.
The lawsuit alleges the commission’s staff was much tougher on Caesars than on another applicant, MGM Resorts, which is proposing a casino in Springfield.
Investigators recommended MGM be found suitable to bid; a final decision from the commission is pending.
“There is no reasonable, non-discriminatory reason for the difference in the consideration and treatment by the [investigators] and [the] commission of [Caesars], on the one side, and other applicants, on the other side, nor have they provided any reasonable explanation as to why [Caesars has] been held to a different and higher standard from every other applicant,” the lawsuit states.
The lawsuit alleges that Crosby influenced the commission’s investigators to be tougher on Caesars, and that he made false statements in public that “distorted the historical record” on Caesars’ conduct and response to the concerns of investigators.
It also alleges that the consultants hired to help vet the company had recommended to the commission’s investigation arm that Caesars be deemed suitable to hold a casino license.
“Defendant Crosby’s adverse treatment of plaintiffs was and is arbitrary and irrational, without authority under the law, and motivated by malicious and bad faith intent to block the fair and impartial consideration of [Suffolk Downs’] application, the suit alleges.
The suit asks the court to declare the background check “constitutionally flawed” and that the investigator’s report on Caesars “is a nullity, entitled to no force or effect.”
A spokesperson for the commission said this morning the panel’s lawyers are reviewing the suit.
The state gambling commission today said it wants Revere to hold another citywide referendum before the licensing board decides whether the Revere-only Suffolk Downs plan can remain in the competition for the sole Eastern Massachusetts casino license.
Revere voters on Nov. 5 endorsed gambling on the East Boston portion of the Suffolk Downs property. But when East Boston voters rejected the idea on the same day, Suffolk Downs shifted its plan into the Revere portion of its property, and brought in a new partner, Mohegan Sun, to run the facility.
During a hearing today, gaming Commissioner James McHugh argued that the five-member panel must hear anew from Revere voters because of the changes made by the developers. Ultimately, the vote in favor of the new referendum was unanimous.
The commission voted to allow the Suffolk Downs application process to go forward, provided that the casino developers and the city of Revere formally commit to holding a second election. The board’s vote requires the city and the developer to decide within seven days whether to accept the commission’s new mandate.
The commission’s actions keep alive potential competition for what is considered the most lucrative casino license available in the state. Suffolk Downs has struggled to stay in the race, while the only other applicant for the Boston area casino license, Wynn Resorts, readily won the backing of voters in Everett where the company is proposing a $1.3 billion gaming resort.
Suffolk Downs’ original proposal called for two hotels, a casino, spa, and other amenities on the East Boston side of the city line passing through the roughly 163-acre track property.
Under the new proposal, planned entirely within Revere, Suffolk Downs would be a landlord, not the casino owner. Plans call for Mohegan Sun to build and own the casino on land leased from Suffolk Downs, independent of the track.
The new arrangement would no longer require Suffolk Downs to continue horse racing, though track officials have pledged to keep racing.
Mark Arsenault can be reached at marsenault@globe.com. Follow him on Twitter@bostonglobemark
John R. Ellement can be reached at ellement@globe.com. Follow him on Twitter@JREbosglobe.
Fatality at Boston Bridge & Steel
EAST BOSTON
A worker was killed in an industrial accident in East Boston Monday evening, Boston EMS said.
The accident occurred at Boston Bridge & Steel at 256 Marginal St. just after 6 p.m.
“The preliminary information is that a beam fell and struck a worker,” said Jake Wark, spokesman for the Suffolk County District Attorney’s Office.
The company identified the worker as Marcos Mancilla.
The death is being investigated by the Massachusetts State Police because the company is located on Massport property.
The company works on bridge and steel fabrication projects in Massachusetts, Connecticut and Pennsylvania, according to its website. It employs 65 workers on three shifts, the website says.
Report urges panel to insist on certain conditions
SPRINGFIELD, Mass. —The investigative arm of the state’s gambling commission is recommending that MGM be found suitable to proceed with a bid for a casino in downtown Springfield, with certain conditions.
The commission’s Bureau of Investigations and Enforcement said a months-long review did not find any factors that would disqualify MGM. But in a report issued Monday, the bureau said the panel should make sure it was satisfied with the company’s handling of two key matters before issuing a final finding.
Read entire report from Mass. Gaming Commission
One issue under discussion was the company’s handling of the 2008 conviction of a former board member in a wiretapping case. MGM officials acknowledged errors in judgment in allowing Terry Christensen to continue advising MGM after his conviction.
Another matter of concern was MGM’s dealings in the Chinese territory of Macau.
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