The pitched competition to build a resort casino in Eastern Massachusetts entered its next phase Friday, as the Massachusetts Gaming Commission declared Wynn Resorts suitable to hold a gambling license.
The approval does not mean that Wynn Resorts can now build the $1.3 billion casino it has proposed for a former Monsanto chemical site on the Mystic River in Everett. Instead, the suitability investigation is, essentially, an elaborate background check that determines that the company is eligible to potentially hold a gambling license after scrutiny of its corporate governance, financial stability, and business practices. A state panel will decide next year who wins the high-stakes battle to open a casino in Eastern Massachusetts.
The other competitor for that license, Mohegan Sun in tandem with Suffolk Downs, faces a Feb. 25 vote in Revere. After East Boston voters rejected a casino at Suffolk Downs, the track worked with Mohegan Sun to move the proposed gambling emporium to the Revere side of the racecourse.
The deadline for the detailed proposals of the gambling facilities is Tuesday. Mohegan Sun has already passed the state background check.
State regulators can issue up to three licenses for resort casinos, one each in Eastern, Western, and Southeastern Massachusetts. MGM, which has proposed a casino in Springfield, was deemed suitable to hold a gambling license Monday and has received the approval of voters. Several other casino proposals have sputtered as they have been rejected by voters. The process has lagged in Southeastern Massachusetts.
“The commission looks forward to receiving the final applications from the resort casino applicants, which will happen on Dec. 31, and that will officially kick off the evaluation process,” state gambling commission spokeswoman Elaine Driscoll said.
Richard McGowan, a professor at the Carroll School of Management at Boston College, said it came as no surprise that Wynn Resorts was deemed suitable. He also said he expected the referendum on the Mohegan Sun proposal at Suffolk Downs to pass in Revere.
“The commission is going to be faced with ‘which is a better site,’ Suffolk Downs or Everett,” McGowan said. “That’s going to be very interesting.”
McGowan said each proposal comes with its own issues. The Everett site has some chemical contamination, and questions have been raised about whether the $10 million set aside to clean up the site will be sufficient. Under the initial Suffolk Downs plan, Boston would have received substantial revenues; Revere is now in line to reap millions of dollars.
The determination of suitability for Wynn Resorts hinged on the company demonstrating ethical and responsible practices in Macau, the special administrative region of China where it has a casino. Significant concerns have emerged about gambling practices in Macau, where money laundering and organized crime are a problem. But the Massachusetts commission said it was satisfied that Wynn engages in “ ‘responsible business practices’ in Macau.”
The commission also praised a compliance committee that oversees Wynn’s gambling operations, but suggested that the committee’s membership be changed to have a majority of members who are not directly employed by the company.
“Where it is critically important that this committee be empowered to address all compliance issues with total independence, thought might be given to adjusting the composition of the committee from a majority of inside members to a majority of outside members,” the commission wrote.
Everett city officials said they were pleased with the approval. Michael McLaughlin, the city councilor who represents the ward that includes the possible casino site, called it “a major steppingstone, where I feel as though the next and final decision is going to be the license that will be awarded to Everett and Wynn Resorts sometime in May.”
Mayor Carlo DeMaria of Everett said he believed that the proposal would prove very competitive because Wynn’s casinos are known around the world and would bring tourists from afar. The plan includes a 19-story hotel tower with 550 rooms.
“We have a first-class developer who knows how to run and operate casinos,” DeMaria said. “If you ask anyone, they’re going to say, ‘Steve Wynn — he’s done it in Vegas, he’s done it in China, now he’s going to do it here.’ ”
Everett residents voted overwhelmingly in June to support the Wynn casino. Revere voters will take up the issue in February, after the developer was granted an extension on the vote.
Mohegan Sun had initially sought to build a casino in Palmer in Western Massachusetts, but after voters there rejected the plan, the Connecticut gambling giant shifted its sights to Suffolk Downs.
“We’re going to work hard to earn the approval of voters in the same way we are working hard to create an amazing destination and deliver a winning application to the Massachusetts Gaming Commission,” Mitchell Etess, chief executive of the Mohegan Tribal Gaming Authority, said in a statement.
Driscoll, the gambling commission spokeswoman, said licenses for casinos in Eastern and Western Massachusetts are expected to be issued in May. She said that proposals for a single slot machine parlor in the state are further along and a license should be issued in March. Three plans remain in the hunt for the slots license, from gambling companies that have won voter approval in Leominster, Plainville, and Raynham.