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The Massachusetts Gaming Commission’s initial review of the two companies vying for a Greater Boston casino license gives the Wynn Resorts proposal for Everett an edge over Mohegan Sun’s plan for Revere.
One theme that appears to be emerging is a preference for Wynn’s broader, outside-the-region marketing outlook. While Mohegan Sun views its Revere casino as having a fairly narrow regional focus, Wynn hopes to attract customers from across the northeast as well as international gamblers and tourists. Commissioner Enrique Zuniga has been particularly vocal in trumpeting Wynn’s marketing focus, saying it will bring more economic activity to the state and diversify the region’s gambling operations.
The sentiments of the other three commissioners are harder to read, but Commissioner Gayle Cameron expressed amazement at the different approaches of Wynn and Mohegan Sun. She noted Mohegan Sun expects only 3.3 percent of its customers will stay overnight at the facility, while Wynn’s projection is 23.6 percent. Commissioner Bruce Stebbins gave Wynn a rating of very good to outstanding for broadening the region’s tourism appeal, while giving Mohegan Sun a sufficient rating.
Wynn expects to bring in $230 million in revenue from outside eastern Massachusetts, including $75 million from international visitors and $50 million from tourists. Mohegan Sun is counting on only $40 million from outside eastern Massachusetts, and most of that would come from western Massachusetts and Connecticut.
In the commission’s initial review of the two proposals, Wynn won two categories – finance and economic development – and Mohegan Sun won two – building design and mitigation. Wynn also dominated in a fifth category that consisted of eight separate questions – Wynn prevailed on five of the questions and tied Mohegan Sun on three others. Individual commissioners handled the initial ratings in each category and each of the questions in the fifth category; those initial ratings are not binding on the board as a whole as it selects a licensee but are probably a good indicator of where the commission is leaning.
Stebbins, in his presentation on economic development, said Wynn’s project was superior because it would result in 4,382 full-time and part-time jobs, compared to 3,172 at Mohegan Sun. He said pay and benefits per fulltime employee at Wynn would be $51,773, compared to $39,144 at Mohegan Sun. Both companies would spend roughly $137 million on goods and services in the first year, but Wynn would spend $95 million locally while Mohegan Sun would spend $62 million locally.
Despite Wynn’s edge at the end of the commission’s hearing on Tuesday, the process still has a long way to go. The commissioners on Wednesday plan to propose conditions the casino developers must comply with in order to receive a license. The conditions will then go to the developers for review. Some of the conditions are onerous, and could be rejected by the developers and be the subject of further negotiations. Once that process is concluded, the commissioners intend to award the license.
So far, only individual commissioners, as part of their initial reviews, have recommended licensing conditions. On Monday, Wynn was urged by Commissioner James McHugh to redesign the exterior of its hotel tower. Zuniga said Mohegan Sun should be required to raise $100 million more in capital to reduce its debt load. He also said Mohegan Sun should be required to dramatically revise the marketing agreement between its Connecticut and Massachusetts properties in order to protect the interests of Massachusetts.
On Tuesday, Commissioner Gayle Cameron called for Wynn to comply with two conditions. One was fairly advantageous to Wynn, requiring the company to make mitigation payments to Boston of $1 million up front and $2.6 million annually for 15 years. The company would also be required to purchase $15 million of goods annually from Boston vendors. The amount is far less than the $20 million a year Boston negotiated with Mohegan Sun, but Boston pulled out of mitigation negotiations with Wynn and left it up to the commission to set terms.
Cameron’s other condition requires Wynn to more fully address traffic concerns at Sullivan Square in Boston, a congested bottleneck through which roughly two-thirds of the casino’s traffic would flow. She said Wynn is not doing enough to address short-term traffic problems at the square and appears unenthusiastic about coming up with a long-term solution.
“It’s only there that the mitigation is not sufficient,” said Cameron as she reviewed Wynn’s traffic plans and compared them to those of Mohegan Sun.
Wynn has proposed spending $6 million to address Sullivan Square traffic concerns, but Cameron and her consultants seemed skeptical that would be enough. She recommended Wynn pay 10 percent of the costs of a long-term solution to the square’s traffic problems, with a cap of $20 million on that payment. She estimated a long-term solution could cost anywhere from $100 million to $200 million.
Cameron also argued that Wynn should pay a penalty if it fails to divert roughly 30 percent of its casino traffic to public transportation and ends up letting too many cars travel through Sullivan Square. She would leave it up to transportation regulators to set a proper level of casino traffic for the square, but said Wynn should be required to pay a fine of $20,000 per car for every vehicle that exceeds that level. She said the commission could also reduce on-street traffic to the casino by limiting the number of parking spaces Wynn could use in its garage or by establishing variable pricing for those spots.
What the commission didn’t address on Tuesday was in some cases almost as interesting as what it did address.
Commissioner Cameron gave no points to Mohegan Sun for negotiating lavish payments with all of its surrounding communities, while Wynn played hard-nose with many of its surrounding communities. It went to arbitration with Somerville and Chelsea and ended up not reaching an agreement at all with Boston. McHugh asked Cameron about the political opposition to Wynn’s negotiating style in Boston and Somerville, but she said she chose not to view arbitrations negatively because the commission was not privy to the meetings between the parties.
Cameron’s traffic consultants almost exclusively focused on traffic bottlenecks near the casino project sites. They gave generally glowing reviews to Mohegan Sun and Wynn, except for Wynn’s efforts at Sullivan Square. The consultants did not raise concerns about estimates that a Mohegan Casino in Revere would boost by 10 percent traffic through the already-at-capacity Ted Williams Tunnel.
Mohegan Sun has made the rescue of Suffolk Downs a centerpiece of its pitch for the Greater Boston casino license. Suffolk has agreed to keep operating for 15 years if Mohegan is awarded the license. But the horse track was barely mentioned in Commissioner Stebbins’s presentation.
OTHER CASINO NEWS
Gaming Commission officials say they see no problem with Wynn moving ahead with the purchase of land in Everett for his casino, despite the involvement of criminals in the past. Local officials say they have been questioned by FBI agents about the land deal and suggested a grand jury may be taking testimony on the matter. Everett Mayor Carlo DeMaria, who was at the Gaming Commission hearing both Monday and Tuesday, was asked if he knew anything about a grand jury investigation. “I’d rather not say,” he responded.
The likely opening dates of the two casino proposals could become a factor in the commission’s deliberations, since a later opening means the state starts receiving gambling money later. Mohegan Sun is predicting an opening date of June 2017, but commission officials think the start date could be pushed back to September 2017. Wynn is forecasting an opening in 2017, but McHugh says July 2018 is more realistic.

