Massachusetts Gaming Commission Continues Evaluation and Asks to Hear More From Applicants

Massachusetts Gaming

By Stephanie Aronzon

Last week, the Massachusetts Gaming Commission announced that it was “rapidly approaching the completion of the Evaluation Process” for the Region A resort-casino license applications submitted by Wynn and Mohegan Sun.  The Commission’s results and findings were made public at a series of presentations and deliberations which began Monday, September 8, but were suspended late on Wednesday, September 10 to give the two applicants until Friday at 5 p.m. to respond to recommended conditions.   Meetings resumed on Monday, September 15 at Boston Teachers Union Hall in Dorchester, with plans to continue meetings and deliberations for the next two days, if necessary.

Each of the four commissioners oversaw independent advisors and industry experts to evaluate each gaming proposal. The different elements considered by the commissioners were (i) finance, (ii) economic development, (iii) building and site design, (iv) mitigation, and (v) a project overview.  Each element was rated as insufficient, sufficient, very good, or outstanding.   Each commissioner presented publicly the results to the other commissioners, and the other commissioners had the opportunity to ask questions.

Monday, September 8 Meeting

At the Monday, September 8th meeting, Commissioner James McHugh gave a presentation of the building and site plans for the two proposals, and Commissioner Enrique Zuniga examined the financial outlook of the proposals.

The Mohegan Sun proposal was favored for the building and site design elements, with references to its attractive style and accessibility.  Commissioner McHugh described Wynn’s potential new addition to the Boston Area skyline as “undramatic” and lacking an “innovative energy.”  Commissioner McHugh expressed concern about Wynn’s ability to mitigate traffic in Sullivan Square, but noted its plans to clean up environmental issues at the proposed casino site.  Overall, the Mohegan Sun site and building plans were rated “sufficient/very good” and the Wynn’s as “sufficient.”

Commissioner Zuniga favored the Wynn proposal’s financial outlook.  Mohegan Sun’s financial proposal was found to be less desirable because it is dependent on outside investors, and had a more limited view of the market for the casino than the Wynn proposal.  Ultimately, Wynn was given a “very good/outstanding” rating for financials, and Mohegan Sun received a “sufficient.”

Tuesday, September 9 Meeting

The Tuesday meeting included discussions of the surrounding community agreements reached by Wynn and Mohegan Sun, specifically mitigation issues presented by Commissioner Gayle Cameron and economic development efforts presented by Commissioner Bruce Stebbins.

Commissioner Cameron rated both Mohegan Sun’s and Wynn’s efforts to reach surrounding community agreements as sufficient, describing Wynn’s approach as “measured” and Mohegan Sun’s as “proactive” and “more generous.”  Both companies were well rated with respect to reaching agreements with host communities, and the treatment of the state lottery system.  Mohegan Sun appeared to have an advantage for its plans to combat problem gambling and to mitigate traffic impacts, whereas Wynn was cited as providing “minimal information on impacts to housing and school populations.”  Overall for mitigation issues, Commissioner Cameron rated Mohegan Sun’s plans as “sufficient/very good” and Wynn’s as “insufficient/sufficient.”

Commissioner Stebbins discussed the economic development plans for the two proposals.  The Wynn proposal had the advantage as Commissioner Stebbins noted the plan promises more jobs and opportunities to external businesses, and its marketing plans put Wynn in a position to draw consumers from beyond New England.  Commissioner Stebbins ultimately rated Wynn’s economic development plans as “very good” and Mohegan Sun’s as “sufficient/very good.”

During the meeting, the board members explored eight questions as part of an overview of the proposals.  Wynn beat Mohegan Sun in five of the areas:  Destination Resort, Competitive Environment, Meeting Unmet Needs, Collaborative Marketing, and Broadening Region’s Tourism Appeal.  The two sites tied for the remaining three categories:  Massachusetts Brand, Outward Looking, and Diverse Workforce and Supplier Base.

Moving Forward

On Wednesday, the Commission gave Wynn and Mohegan Sun recommended conditions for receiving the license, and the companies had until Friday, September 12 at 5 p.m. to respond and point out any material errors in the commissioners’ reports.  The recommendations for Wynn included reconsidering the exterior design and traffic mitigation efforts in Sullivan Square.  The recommendations for Mohegan Sun included finding further equity in financing its proposed casino and addressing its marketing efforts beyond Massachusetts.

Both companies responded by the deadline, including a letter overview of comments along with finely tuned edits to the Summary of Conditions.  In response to the Commission’s broader points, Mohegan Sun’s response included proposing an increase in the amount of available funding by a total of $150 million; extending the marketing “protected zone” to include all of Massachusetts, New Hampshire, Rhode Island, and Maine, but declining to include Connecticut; explaining the off-site revenue prospects for its reward program, and suggesting a continued monitoring role for the Commission for marketing to out of state residents.  Wynn’s response to the Commission’s broad concerns was defensive of its design choices and building material, declining to change its plan.  The response was also defensive of its efforts to address the traffic mitigation concerns, citing the City of Boston’s “intransigence,” “irrational demands,” and “conditions that are inconsistent with common sense,” but did increase its offer by an additional $1 million per year, creating “a fund of $24 million that could be applied to a Sullivan Square long-term solution.”

The Commission’s deliberation process continued on Monday, evaluating the applicants’ responses to the recommendations and adjusting its initial ratings in light of the proposed changes.  But because the Commission’s concerns were not fully addressed by the applicants’ responses, Monday’s meeting concluded by requesting that the applicants present for 20 minutes each on Tuesday morning.  The Commission reiterated that it does not want to go through every aspect of the application, but wants applicants to limit their presentations to address the concerns that were highlighted throughout Monday’s deliberation —  concerns that remain following evaluation of the applicants’ responses to the conditions presented last Wednesday.  The Commission’s final clarification that this does not include offering opinions about each others’ proposal received chuckles from the live crowd.

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