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Interest lags for southeast casino in Mass.

Uncertainty over tribal plans cited

Only one developer has filed an application for the Southeastern Massachusetts casino license ahead of Monday’s deadline, leaving state gambling regulators unsure if the region will attract enough bidders for a healthy competition.

KG Urban, which wants to build a casino in New Bedford, submitted the non-refundable $400,000 application fee on Friday, according to a company spokesman.

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A separate collection of landowners who want to attract a casino developer to the upper New Bedford harbor area say they will not submit an application but will try to lure a developer from another zone. Applicants that fail to win a casino license in one of the other two regions — or in the contest for the state’s sole slot parlor license — are exempt from Monday’s deadline and can compete in the southeast without paying another application fee.

“There may be five or six companies that may be available for a partnership,” said lawyer Paul Hamel, a spokesman for the group.

And while there could be surprise last-minute bidders, the action so far in the southeast has fallen far short of the stampede of 11 developers that met the January deadline for the state’s other three licenses. The lower interest is likely linked to the ongoing efforts of the Mashpee Wampanoag to build a tribal casino in Taunton, about 40 miles south of Boston.

“The truth is there is uncertainty about the tribe,” said Stephen Crosby, chairman of the state gambling commission.

That uncertainty is unlikely to go away soon.

‘A lot of factors are working against someone who wants to apply in that region.’

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The 2011 state casino law created three resort casino licenses, with no more than one to be awarded in each of three regions of the state. The law delayed bidding in the southeast to give the Mashpee time to make progress on a tribal casino. Tribal casinos are approved by the federal government and tribes do not need state licenses to run gambling businesses.

But the Mashpee face legal hurdles to federal approval and it is impossible to know when they will be successful, or if they ever will.

The prospect of another casino opening in the southeast — even years into the future — is chilling interest from private development companies, said the Rev. Richard McGowan, a Boston College casino expert. In addition, he said, a southeast casino would face direct competition from the Twin River casino in Lincoln, R.I., about 25 miles from Taunton.

“A lot of factors are working against someone who wants to apply in that region,” he said. “I just don’t think that license is worth as much as the Boston license or the one out west.”

The Mashpee already have what many developers desire: a community that wants them. Taunton residents voted in a non-binding referendum to support a tribal casino project.

What the Mashpee lack is sovereign tribal land on which to build. The tribe can only run a gambling business on land held in trust on their behalf by the federal government. Putting land into trust has historically involved a long administrative process at the US Department of Interior. That process became even more complicated when the Supreme Court in 2009 threw into question whether the federal government has the power to take land into trust for a tribe such as the Mashpee. It may take another court ruling or an act of Congress to clarify the matter.

In the meantime, the tribe maintains it is not interested in applying for a commercial casino license under state law.

“We are focused on the progress being made with our Project First Light destination resort casino, which will be a tremendous economic stimulus to Southeastern Massachusetts,” Cedric Cromwell, chairman of the Mashpee, said in a statement.

The gambling commission has encouraged competition for each license it controls. Crosby said the competition has forced developers to improve their projects. And he said that despite the apparent limited interest so far from developers, it is still possible the southeast could host a highly competitive sweepstakes for the license.

The final applicants in the southeast may depend on how the competition unfolds in the other regions, which have already started reducing the field of candidates. Three companies remain in pursuit of the slot parlor license, while two are seeking to build in Western Massachusetts and three in Greater Boston.

The southeast could offer a second chance for the losing bidders. “We’re just not going to know until probably June or July what the competition in the southeast is going to be,” said Crosby.

Mark Arsenault can be reached at mark.arsenault@globe.com. Follow him on Twitter @bostonglobemark
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