Investigators for the Massachusetts Gaming Commission went from punching Caesars Entertainment in the nose to pulling their punches with Foxwoods.
It raises questions about double standards and whether the high-stakes pressure of the casino business is getting to state regulators.
After reviewing the Foxwoods-based casino proposal for Milford, state investigators reached no conclusion about its suitability — even though they couldn’t complete their background check, because the casino’s backers were unable to identify a major source of funding.
That was a “glaring” omission, Karen Wells, director of the commission’s Investigations and Enforcement Bureau, told the commission at last week’s hearing on the question of whether Foxwoods should be deemed suitable to pursue a license. It also violates the commission’s requirement that an applicant for a casino license provide all necessary material. Even so, “I’m kind of throwing my hands up,” said Wells, leaving it up to the commission to decide.
There was no such hesitation in reaching a recommendation on the proposal from Suffolk Downs. After reviewing that bid, the same investigators decided its partner, Caesars, “has not met its burden by clear and convincing evidence to establish its suitability.” Once Suffolk Downs knew of that conclusion, its backers asked Caesars to withdraw as its casino operator. The commission found the remaining partners suitable for a license. But once East Boston voters knew Caesars was out, they rejected the casino.
Commission chairman Stephen Crosby insists there’s no significant difference between the two approaches. With Caesars, he said, investigators did not make a “recommendation of unsuitability”; they said Caesars “had not met its burden of proof of clear and convincing evidence of suitability.” With Foxwoods, said Crosby, investigators said they had an incomplete application and left it to the commission to determine whether that was reason for disqualification.
That’s the kind of hair-splitting that makes lawyers smile — especially if they represent Suffolk Downs. Indeed, if there’s one certainty on the long and winding path to casinos in Massachusetts, it’s the prospect of litigation.
Suitability standards can’t slide around, and investigators can’t look like they’re afraid to apply them.
How will Suffolk Downs react if the gaming commission won’t let it reconfigure a casino plan for Revere, which wants one? If Suffolk Downs carries out its Revere-only backup plan, what will East Boston’s anti-casino activists do?
If the Wampanoag Tribe of Aquinnah moves forward with its plan to open the state’s first casino on what the federal government deemed to be tribal land on Martha’s Vineyard, what will Massachusetts do? Governor Deval Patrick, the force behind expanded gambling in Massachusetts, doesn’t want expanded gambling on that bucolic island resort.
What happened to Caesars was a shocker — and jump-started major second-guessing about the commission and its suitability standards.
Investigators concluded that this iconic casino brand had not met the burden of proving itself “suitable” because of a naming deal with Gansevoort, a hotel company that is partly owned by an investor with alleged ties to the Russian mob. Despite several degrees of separation from a passive investor, Caesars walked away from the deal. Caesars still didn’t establish “suitability,” according to state investigators. Yet, at the same time, investigators’ questions about the financial solvency of a key Suffolk Downs investor were not considered sufficient reason to deem the entire Suffolk proposal “unsuitable.’’
With Foxwoods, investigators questioned the financial foundation of the bid, because it lacked more than half of its equity funding. But their report also notes other serious concerns: Michael Thomas, the former chairman of the Mashantucket Pequots, the tribe behind Foxwoods, as well as his brother, Steven Thomas, the tribe’s former treasurer, were charged with stealing more than $700,000 of the tribe’s money. Michael Thomas was convicted of theft and faces a prison sentence. In addition, Antonio “Tony” Beltran, who was hired as the tribe’s security chief, turned out to have a criminal record.
Yet, none of that was enough for investigators to conclude that Foxwoods had a burden of proof problem. That, they left to the commission.
It’s important for the Gaming Commission to stick to its regulatory guns and not be pressured by politics or public sentiment. For that reason, suitability standards can’t slide around, and investigators can’t look like they’re afraid to apply them equally.
After swinging at Caesars, investigators can’t duck Foxwoods — not without looking wary and overly sensitive to outside pressure.Joan Vennochi can be reached at email@example.com. Follow her on Twitter @Joan_Vennochi.