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Casino Series Part 4: Following the Casino Money Trail

Saturday, February 18, 2012

 

Casino gambling has been billed as a windfall for cash-strapped Massachusetts, with predictions that Las Vegas tycoons will trip over each other to bid big for gambling licenses.

But a close look at the casino bill passed last fall on Beacon Hill reveals a process for awarding licenses that tilts the playing field in favor of a Boston-based racetrack with deep political roots and a small army of lobbyists.

On the brink of closing just a few years ago amid declining interest in horse racing, Suffolk has spent more well more than $2 million on lobbying state lawmakers since a New York casino developer bought a controlling stake in the track back in the spring of 2007.

It is far more than any other competing gambling interest with an eye on Massachusetts, with Suffolk and more than a dozen other players chipping in a total of $6.8 million over the past few years, according to state lobbying records.

(Lobbyists working for the various casino developers have also bombarded elected leaders across the state with hundreds of thousands in campaign contributions, with the biggest slices going to Lt. Gov. Tim Murray, his boss Gov. Deval Patrick, House Speaker Robert DeLeo, and Senate President Therese Murray, lobbying records indicate.)

The state’s newly passed gambling bill gives Suffolk Downs a major advantage in competing for the most lucrative of the state’s three casino licenses, one covering much of Eastern Massachusetts and a swath of Central Massachusetts as well. And Worcester, thanks to some behind the scenes tinkering with the licensing zones, all but finds itself boxed out of the competition.

Instead of being grouped in the western area, Worcester and Central Massachusetts, in an odd twist of geography, has been grafted onto the eastern/Greater Boston zone, in which Boston’s Suffolk Downs is the odds-on favorite to walk away with the license.

“Worcester always seems to get the short end of the stick,” said Harry Tembenis, a city resident and IT worker who launched a campaign a few years ago to sell Worcester’s airport to a casino developer. “Worcester is too close for such a price – the Boston politicians would never allow it.”

All told, Suffolk’s $2 million lobbying spend dwarfs that of Las Vegas icons like Steve Wynn, who has teamed up with Bob Kraft on a Foxborough casino, and Sheldon Adelson, a Dorchester native who for years.

Photo: Wikimedia/Dominic

Most of Suffolk’s lobbying dollars have come directly from the racetrack’s powerful lineup of local and national investors, a group that includes by Caesars Entertainment, the largest casino company in the world. John Hall, a major real estate investor in the track, has separately maintained his own lobbying team, account just over a quarter of the $2 million spent.

By contrast, Wynn has pumped $819,434 into his Massachusetts lobbying efforts since 2009, the year his representatives first popped up at the State House. Adelson’s Las Vegas Sands dropped $472,000 during the same time period, state records at the Massachusetts Secretary of State’s office show.

The Mashpee Wampanoag tribe, the only current big player whose lobbying efforts go back as far as Suffolk’s, spent $846,958 since 2007. And much of that has come in the last two years after a deal that brought in Asian casino tiger Genting as a backer.

Casino developer Richard Fields, who saved the track from a likely shutdown in 2007, also kicked off the track’s casino lobbying campaign, dramatically expanding the track’s lineup of lobbyists.

“The people who have been on the ground for the past two or three years clearly have the advantage now,” said Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth, after the bill passed last fall.

Suffolk’s biggest advantage in the casino bill that passed last fall is a requirement that investors in the track need only to win referendums in friendly East Boston and Revere, home to generations of racetrack workers and supportive local politicians.

Suffolk gets to skip a city-wide referendum, one that would let voters from Back Bay to Hyde Park, South Boston and Roxbury have their say. (The exemption was broadened to Worcester and Springfield by the time the bill passed.)

“I think Suffolk is very well positioned,” said Larry DiCara, a top Boston real estate lawyer and a former chairman of the Boston Municipal Research Bureau.

Other developers, such as Steve Wynn, who has teamed with New England Patriots owner Robert Kraft to proposed a casino next to Gillette Stadium, and veteran developer David Nunes, who is pitching plans for a gambling palace in Milford, have to win community-wide referendums.

The approach of ward, or neighborhood based voting has no logic or precedent behind it except as a maneuver to make it easier to get a casino through, contends Steve Poftak, the Pioneer Institute’s director of research and director of the Shamie Center for Better Government.

“We don’t even do city elections on the basis of a ward,” Poftak said. “I think it is ridiculous.”

In addition, a provision put in to offer more protection to surrounding communities may also compound the difficulties of developers with hopes of building casinos in the Boston’s suburbs.

Wynn/Kraft will not only have to win over voters in Foxborough – not once but twice given a two-thirds zoning vote

that is required along with a referendum – but they will also have to cut deals with officials in neighboring towns.

That means getting a sign off from Wrentham, Walpole and Norfolk selectmen, among others, whose residents have been up in arms over the prospects of casino next door in Foxborough.

While he has more support in Milford, veteran developer David Nunes, who has proposed a $750 million casino in the blue collar town, will have his hands full winning over wary officials in a ring of bucolic suburbs in the area.

But Suffolk faces far few challengers from the provision – surrounding communities in this case may simply mean other neighborhoods of Boston, all firmly under the political control of one of the biggest cheerleaders for the proposed $1 billion-plus casino, Mayor Thomas M. Menino.

Instead of a bidding war, there is a chance Suffolk may face one or maybe no competitors given the daunting local approval process that faces developers with hopes of building casinos in Greater Boston’s upscale suburbs.

Still, that Suffolk finds itself in prime position is not in dispute among local political observers. The main debate is how much to credit the racetrack’s aggressive lobbying campaign and how much may simply be due to long standing advantages skillfully exploited.

For its part, Suffolk contends its lobbying efforts are simply designed to get the word out about a proposed casino development and location that are inherently superior to its competitors.
"We believe that Suffolk Downs is an ideal site for a world-class resort-style casino that will create thousands of jobs and deliver more revenue to the state,” said Bill Mulrow, the chairman of the board of Sterling Suffolk Racecourse, in a statement.
Others say it may not be a question of what’s being proposed as much as who is proposing it.

The track, after all, is square in the district of House leader DeLeo, whose father worked as a maitre d’ at the track and who has long pushed for slots at the track, which straddles the East Boston/Revere line.

The track, which has been running horses since the 1930s, has generations of carefully cultivated political support to draw upon.

It also has, in Menino, one of the state’s most powerful politicians on its side as well, who has supported expanded gambling at Suffolk since early proposals for a slot parlor.

One of Suffolk’s top local investors is Boston businessman and concessions magnate Joe O’Donnell, a long-time friend and supporter of the mayor’s.

“Suffolk has been around since the mid-1930s,” DiCara noted. “There are a lot of people like Bob DeLeo whose father worked at Suffolk who have loyalty to Suffolk.”

Still, all those connections weren’t enough to get a green light for a Suffolk gambling palace in years before Fields, who made his mark building a casino for the Seminoles.

Before 2007, the track’s owners, a group of politically connected Boston businessmen, had struggled to mount a campaign to convince lawmakers to given a green light to a slot packed gambling hall at the track.

Suffolk spent $90,000 on lobbying in 2006, a futile campaign that relied on threats to close and bussing racetrack workers to Beacon Hill to make desperate pleas for slot machines at legislative hearings.

After Fields took over, Suffolk upped its lobbying spend to over $300,000 in 2007, the number, combined with property owner Hall’s own efforts, rising to a high of roughly half a million in 2010.

“Of course there is a relationship between the amount of money spent on lobbying and political contributions and how legislation is constructed,” noted Carey Theil, a veteran observer of Beacon Hill’s lobbying wars. Executive director of GREY2K USA, a Somerville-based nonprofit, Theil helped orchestrate a successful referendum campaign that banned live dog racing in Massachusetts, taking on slot hungry racetracks in the process.

“While I am not saying there is a direct causal relationship, there is a correlation, no doubt about it,” Theil said. 

 

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