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BROCKTON — The state Gaming Commission Thursday rejected plans for a $677 million casino here, dashing hopes for an economic catalyst in one of the state’s poorest cities and clearing the field for a tribal casino in nearby Taunton.

The 4-1 vote ends the year-long effort by Mass Gaming & Entertainment, a partnership of Chicago-based developer Neil Bluhm and local businessman George Carney, to build a vast casino-hotel complex on the grounds of the Brockton Fairgrounds.

Commission members said a Brockton casino would have faced strong competition from the Taunton casino, just 20 miles away, and criticized its proposed design as uninspired.

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“It comes down to this not being the kind of casino Massachusetts envisioned,” said commission chairman Stephen Crosby, who called the proposal “less than a knockout.”

Supporters had urged the commission to approve the plan, saying it would create more tax revenue for the state and bring hundreds of jobs to a city plagued by chronically high unemployment and poverty.

“I feel bad for the people of Brockton because they desperately need the jobs and the city needs the money,” Carney said after the vote, taken after more than two days of deliberations.

The board’s denial marks a major victory for the Mashpee Wampanoag tribe, which began construction earlier this month on a $1 billion casino on reservation land in Taunton. It means the tribe, which does not require state approval, will not face competition from another resort casino in Southeastern Massachusetts — although there is a slot parlor in Plainville, and Twin River Casino is just over the Rhode Island line.

The prospect of having two large-scale casinos in Brockton and Taunton clearly worried the commission, which is responsible for regulating the state’s gambling industry. Commission member Eduardo Zuniga said the Brockton casino would have fractured the region’s market, undercutting the commission’s goal of “building a long-lasting and robust gaming industry.”

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Crosby acknowledged that the commission might have approved the Brockton casino had there not been the competing casino plan from the Mashpee, and he said the process can be reopened if the tribal casino is derailed. Carney said he is open to the possibility of making another bid.

The future of the Mashpee casino hinges on a federal lawsuit, filed in February, that challenges the US Interior Department’s decision to grant reservation status to the Taunton land. The Mashpee say that they are confident they will prevail in court and that the risk was not great enough to postpone construction. The first phase of the casino is scheduled to open next summer.

That lawsuit, filed on behalf of Taunton property owners, was partially funded by the Brockton developers, who declined to say Thursday whether they would continue to finance the challenge, now that the Brockton plan is denied.

Adam Bond, the lawyer representing the Taunton property owners, said he hadn’t discussed the issue with Bluhm but said the lawsuit would continue either way. “We are going forward, with or without his funding, because it is a worthy case,” he said.

Crosby noted that the state’s 2011 casino law intended to give the Mashpee “the first bite at the apple” in deference to the federal government’s policy of allowing tribal casinos as a means of “rectifying past injustices” to Native Americans.

The tribe previously struck an agreement with the state that it would not pay state taxes unless its casino received exclusive rights to the region. With the rejection of the Brockton casino, the tribe will now pay 17 percent of its gambling revenue to the state.

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A report from a consultant retained by the commission found that Massachusetts could lose some $42 million a year in tax revenue if a Brockton casino were approved, making its Taunton rival tax-exempt and free to spend millions more on marketing, promotions, and perks to regular patrons.

Mashpee Wampanoag Tribal Council Chairman Cedric Cromwell commended the commission for making a “difficult but wise and just decision.”

“We are upholding our end of the bargain and are on schedule to open our doors for business by next summer,” he said. “Today, the Gaming Commission upheld the Commonwealth’s end of the bargain, paving the way for a fruitful economic partnership that will uplift my people and create economic opportunities for the city of Taunton, Southeastern Massachusetts, and indeed the entire state.”

Commission member Gayle Cameron noted that, despite persistent doubts, the Mashpee have won reservation status for their land, secured financing, hired an experienced casino operator, and started construction.

“It’s not our job to forecast the outcome” of the lawsuit, she said.

Each commission member said the Brockton plan met the minimum requirements for a license, but several took issue with the design. Crosby said he expected something bigger and bolder, something with a greater “wow factor” comparable to the two casinos that have already won state approval: the $1 billion MGM Resort casino in Springfield and the $2 billion Wynn Resorts casino in Everett.

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Others — except for the lone dissenter, Lloyd Macdonald — agreed the casino design was lacking.

“I understand the shot in the arm this would deliver for Brockton but I don’t want to make an award on an application that is just not up to the level of excellence we expect,” said commission member Bruce Stebbins.

Richard Reid, a Baptist church pastor and spokesman for the casino opposition group Stand Up for Brockton, called on the city to craft a new plan for economic revival.

“It’s time for the mayor, city councilors, businesses, and the residents of Brockton to roll up their sleeves and start working on the recovery that Brockton needs so badly,” he said.


Sean P. Murphy can be reached at smurphy@globe.com. Follow him on Twitter @spmurphyboston