On casinos, SJC holds trump card
THE SUPREME Judicial Court is the next and last stand in the battle to keep casinos out of Massachusetts.
If you have any doubts, listen to former mayor Thomas M. Menino, talking last week on WBZ-TV’s “Keller at Large.” Asked by host Jon Keller if voters will still support casinos in Massachusetts if the SJC allows a ballot measure on the question to go forward in November, Menino said, “I really believe that if it goes on the ballot, it’ll lose.”
“If it goes on the ballot” is entirely up to the SJC, which is scheduled to hear arguments on that question in early May. After a year of controversy and confusion over the license-granting process, recent polls show slippage in support.
If Menino — once the key political force behind a casino in East Boston and always an astute reader of public opinion — now believes the tide has turned enough to trigger repeal, the industry must be nervous. So nervous that it is determined to keep the question off the ballot.
Last August, the group that wants to kill casinos filed a petition with Attorney General Martha Coakley. It proposed a law that would essentially overturn the expanded gambling law passed by the Massachusetts Legislature in 2011. In September, Coakley — the current front-runner in the Democratic race to be governor — blocked the petition. In a ruling that essentially put the AG on the side of gaming, she argued that the millions that casino operators put on the table to take part in the state’ s licensing process amounts to an “implied contract.” Therefore, if the ballot question wins and the law is repealed, the outcome amounts to an unfair and unconstitutional taking of property.
Put aside the irony of trying to protect from risk the investments of an industry that makes its fortune off other people’s risks.
The “No Casino” group, which appealed Coakley’s ruling, contends the weight of the law falls on the side of the people and their right to vote. According to the brief they filed with the SJC, Coakley’s argument of an “implied contract” runs up against a US Supreme Court decision — Stone v. Mississippi. The case, which goes back to 1879, eerily echoes the circumstances at issue in Massachusetts today.
In Stone, the Mississippi legislature granted a 25-year charter to a lottery company in exchange for an initial $5,000 fee, an annual $1,000 tax, and a percentage of receipts from the sale of tickets. A year later, voters adopted a new state Constitution which outlawed lotteries. The holder of the lottery charter argued that it had contracted with the state to operate a lottery and that the new Mississippi Constitution violated it and, with it, the contract clause of the US Constitution.
But the Supreme Court ruled that no contract existed. The fundamental principle, which the SJC has adopted, is that the state cannot bargain away, even by express grant, the right to exercise its police powers to protect the public welfare, said Thomas O. Bean, one of the lead lawyers for the “No Casino” plaintiffs.
In Massachusetts, there is more recent precedent. The SJC ruled in a 2008 case that owners of a dog-racing track had “no compensable property” in their racing license after voters approved a ballot question banning dog racing.
The ballot initiative process followed by “No Casino” advocates was added to the state Constitution almost 100 years ago. It allows citizens to adopt laws they want enacted, or repeal those with which they disagree. After gathering nearly 70,000 signatures, casino repeal backers are hoping that Menino’s prediction holds true. But first, they have to get the question before the voters.
But there are huge business interests at stake, and the casino industry is rallying to protect them. MGM Resorts, for example, has asked the state gambling commission to delay the formal award of its license until after the SJC makes a ruling. The license award would trigger some $200 million in obligations to Massachusetts. MGM doesn’t want to pay that sum — and still risk losing the right to build a casino if the ballot measure goes forward and is approved by voters.
This is an industry that understands risk better than any other. To improve its odds of cashing in, it must stop the people from cashing out. How lucky that, on the next legal battlefield — before the SJC — gaming has the state’s AG on its side.