SJC questions whether casino repeal would cost Mass.
They sat shoulder to shoulder before the state’s highest court Monday, though their opinions on the case at hand could not have been further apart.
Anticasino activist John Ribeiro, on one side, is part of a group asking the Supreme Judicial Court to allow a measure to repeal the state’s 2011 casino law to appear on the November statewide ballot, so voters can decide directly if they want casinos in their state.
Next to Ribeiro in the crowded courtroom sat casino executive Michael Mathis, president of MGM Springfield, hoping that the justices would quash the repeal effort so his company can begin construction soon on a gambling resort that would generate thousands of jobs.
For about 50 minutes Monday, they watched as justices peppered lawyers on each side of the dispute with tough questions, probing their arguments in a closely watched case that could affect the future of the casino industry in Massachusetts.
Lawyers argued about the consequences of a possible repeal, and whether the state would have to reimburse casino developers for money spent trying to win a license.
“If common sense prevails, we’ll be on the ballot in November,” Ribeiro, head of the Repeal the Casino Deal campaign, said after the oral arguments.
Mathis, on the other hand, said his company has already spent $30 million to $40 million on its pursuit of a casino license in Springfield, and “to not even be able to open our facility . . . I think is troubling.”
A decision on the repeal measure is expected this summer. Secretary of State William F. Galvin needs to know the outcome of the case by July 9 in order to prepare the ballots.
Galvin said Monday that casino opponents will be permitted to collect required signatures while the court deliberates. Those seeking to repeal the casino law must collect 11,485 new, valid signatures by June 18 to stay in contention for a spot on the ballot, he said.
Ribeiro said he is confident the anticasino group will collect enough signatures.
Repeal proponents want the court to overrule a decision
by Attorney General Martha Coakley that the repeal petition is unconstitutional and should not appear on the ballot.
Coakley rejected the petition because the repeal would “impair the implied contracts” between the state gambling commission and casino license applicants and illegally take those contract rights without compensation, the attorney general has argued in court documents.
The gambling commission has already awarded one license, for a slot machine parlor, to a Penn National Gaming project in Plainville. During Monday’s arguments, Justice Robert Cordy cited the slot license in sharp questioning of Thomas O. Bean, the lawyer for those seeking a repeal vote.
“So a five-year exclusive license that has already been awarded after a thorough process outlined by the Legislature, at great cost to the applicant, can simply be taken away with a big never mind?” Cordy asked Bean.
“Yes,’’ Bean replied.
At another point, Cordy pressed Bean again.
“They can do this without compensation, without compensation for all of the investments that were made at the encouragement of the Legislature?” asked Cordy, who was legal counsel to former governor William Weld, a Republican, before joining the SJC. “They can do it without compensation?”
“That is correct,’’ Bean said.
“Wow!” Cordy replied.
Bean was insistent that the process used by the state gambling commission did not obligate taxpayers to compensate casino companies if the state shifts gears and bans, rather than welcomes, legalized gambling.
Moreover, Bean said that casino companies have known since the gambling law took effect three years ago that people were trying to repeal it. The companies decided to risk their own cash, and taxpayers should not be forced to compensate them for their actions, he said.
But Carl Valvo, the lawyer for casino gambling advocates, said that the law was designed to combat the “evils of unemployment’’ and the “evils of blighted communities’’ and that unilaterally changing the rules would require compensation to the casinos.
Justice Ralph Gants, who has been nominated by Governor Deval Patrick to become the next chief justice of the SJC, asked Valvo whether the state could be required to compensate casino companies for “billions of dollars’’ in lost profits?
“The Commonwealth would be subject to compensation for the taking of the license,’’ Valvo said.
Assistant Attorney General Peter Sacks told the court that taxpayers could be forced to repay some of the money spent by the industry, but only under limited circumstances.
Under questioning from the justices, Sacks said the gambling commission retains the power to reject all the applications and not issue casino licenses.
“But that doesn’t mean the procurement process can be just canceled in the middle after everyone has invested a substantial amount of money,” he said. Casino applicants, he said, have implied contracts with the state that entitle them to a decision on their applications, even if that decision is no.
While Cordy, for one, sounded skeptical that the repeal should be permitted to go forward, lawyers who frequently watch the court said it is hard to project how the justices will rule from the questions they ask at oral arguments.
Despite the possibility of repeal, the gambling commission continues working toward awarding the casino licenses it controls.
Two projects, Wynn Resorts in Everett and Mohegan Sun in Revere, are competing for the sole resort casino license in Greater Boston. The commission expects to choose the winner later this year.