Mohegan Sun beat back a bid by Boston to win host community status for a Revere casino in part by removing a provision from the secret lease agreement between Mohegan and Suffolk Downs that would have allowed the track to turn over its horse racing operations to the casino operator.
The Massachusetts Gaming Commission voted 4-0 on Thursday to deny Boston host community status for Mohegan’s proposed casino on the Revere portion of the Suffolk Downs track. The only serious concern raised by commissioners and their staff during the host community debate was the lease provision, which Mohegan defused on April 30 by promising to eliminate the measure.
The provision is unusual on two fronts. First, Mohegan Sun and Suffolk Downs have gone to great lengths to keep their operations separate to weaken claims by Boston officials that the two businesses represent a joint venture operating in both Revere and East Boston. Yet the provision in the lease gives Suffolk Downs the option of turning over management of the track over to Mohegan Sun, essentially merging the two businesses in an operational sense.
Second, Suffolk Downs has pledged to keep the horse race track operating for the next 15 years if Mohegan Sun wins the Greater Boston casino license. Yet the now-deleted lease provision opens with a sentence saying that Suffolk Downs would be under no obligation to keep the track operating.
The lease agreement between Mohegan Sun and Suffolk Downs was turned over to the Gaming Commission on Dec. 2 and no one there raised any concerns about the provision until about 10 days ago, when officials were preparing for a hearing on whether East Boston should be considered a host community. The lease agreement had been ruled a trade secret, but the commission reversed course at Thursday’s hearing and released a heavily redacted version of the lease.
At the time the lease was negotiated, Mohegan Sun already ran a horse track in Pennsylvania and Suffolk Downs officials wanted the option of turning the management of their money-losing track over to the casino operator.
Charles Baker III, a representative of Suffolk Downs, confirmed in an April 30 letter to the Gaming Commission that the lease provision was being removed to eliminate any host community concerns. He also said the track would discontinue racing if racing would jeopardize Mohegan Sun’s ability to win the casino license.
“We would not let racing or any other activity on the remainder of Suffolk Downs’ property get in the way of a successful gaming establishment on the leased parcel in Revere,” Baker wrote. “While we believe there is no colorable legal theory that would sustain such a view, and while we remain committed to continuing racing as outlined in our January letter, we want to make clear that we would discontinue racing operations in the event that racing at Suffolk Downs would be a legal impediment to Mohegan Sun’s Revere-only gaming license application.”
