Springfield will reveal its plans on Monday for whittling as many as four casino proposals down to one, amid concerns from developers and experts that the process could hurt the city’s chances to win the sweepstakes for the highly competitive Western Massachusetts casino license.
Not only would the city be reducing the number of proposals that would eventually go before the state gambling commission, the critics argue, but the rejected developers could easily move to nearby towns and become competitors.
Springfield has emerged as the hot location for casino companies looking to win development rights in the western part of the state, with Ameristar, MGM Resorts, Hard Rock International, and Penn National Gaming all pursuing sites in the city.
Springfield Mayor Domenic J. Sarno wants the city to get behind just one proposal as its submission to the state gambling commission, which will eventually decide which casino developers are granted a license. The city, with the help of consultants, will run its own competition among the gambling companies to identify which proposed project Springfield will support, Sarno has said.
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Such a move could help assure that only one casino proposal goes before voters, a wish the mayor’s office expressed earlier this summer.
The mayor’s intention to eliminate up to three reputable casino developers before their proposals reach the gambling commission has raised criticism that the city is undermining two main goals of the state casino law, which was drafted to maximize competition for licenses in each region and to minimize the influence of politics by giving an independent state commission exclusive control of the competition.
“The law of unintended consequences tells us that by making what should be an open process for multiple bidders into a single bidder, it could actually eliminate the benefit of having competitive bids in the first place,” said Carl Jenkins, managing director in the accounting company CBIZ Tofias, who has studied the Massachusetts casino market.
A new competitive process outside the control of the gambling commission could also hurt the credibility of the carefully constructed state casino law, and discourage bidders from participating, he said.
The gambling panel, known formally as the Massachusetts Gaming Commission, recently opened the application period for state casino licenses. Ameristar, the first of the four casino companies to land in Springfield, has held off paying its nonrefundable $400,000 application fee for now, said Troy Stremming, a senior vice president.
“It’s possible that you might not be able to get an audience before the commission, so therefore there’s really no need to submit that check to the state,” he said. The company will wait until it better understands the local vetting process.
“I think competition for a license is a great thing and we welcome competition, but we thought that competition would take place at the state level,” Stremming said. “We assumed — and I use that word cautiously because I know I shouldn’t do that — we just assumed that any local jurisdiction would want the best opportunity to land a license. So you would think they would want as many viable options as they could get before the commission to land that casino in their community.”
No developer can apply for a state casino license until it negotiates a deal with the community that would host the casino and wins the support of local voters in a referendum.
There is nothing in the law that would prevent Springfield, or any other community, from negotiating agreements with more than one developer and then asking the voters to endorse each of them, said state Senator Stanley Rosenberg, an Amherst Democrat and one of the architects of the state casino law.
“The control of the first part of the process is at the local level and then it shifts to the Gaming Commission, so clearly a choice gets to be made at the local level,” he said. “But if you are trying to stick with the intent of the Legislature [to maximize competition] and if you want to maximize your chance at the Gaming Commission, you have to think very carefully about the strategic moves at the local level.”
Sarno declined to be interviewed; his office said he would not be speaking on the issue until the city unveils its vetting process on Monday.
Kevin Kennedy, Springfield’s chief development official and Sarno’s point-man on casino issues, told the Globe in a June interview that the administration did not want to bring more than one casino referendum to the voters.
“You do not want to confuse the electorate by putting three or four proposals out there and asking them to decide,” Kennedy said at the time. “That probably would be chaos.”
Richard McGowan, a gambling industry specialist at Boston College, praised the city’s skill in getting wealthy developers to compete for Springfield’s favor.
“I give Springfield credit,” he said. “They’re playing these companies off each other.”
The winner of the Springfield sweepstakes will not necessarily get the Western Massachusetts casino license. The owners of the Mohegan Sun casino in Connecticut are planning a bid in Palmer.
And by eliminating three hungry companies, Springfield could create even more competition.
“One of those companies could easily go to another community and make a bid,” said McGowan.