Several developers are already joining in the casino sweepstakes in Western Massachusetts.
File photo | The Republican
BOSTON — Casino gambling now is legal in Massachusetts, but it could take about five more years for a casino resort to open its doors in the state.
The chairman of the Massachusetts Gaming Commission, which is still being organized and would select developers and regulate casinos, said he is doubtful bids will be sought this year for casino resorts.
Chair Stephen P. Crosby, appointed by Gov. Deval L. Patrick, says his best guess for a timetable is that requests for applications for casino licenses will be issued in nine to 18 months.
After bids are awarded, it could take another two years of construction, meaning a casino resort may not open its doors until 2015 or 2016, according to estimates by a top legislator.
The Associated Press photoStephen Crosby, chair of the Massachusetts Gaming Commission. To his left is Gov. Deval Patrick. The governor appointed Crosby on Dec. 13.
During the year ahead, the commission will get organized, and casino operators will continue to jockey for position and make the case for their proposals.
Several developers are already joining in the casino sweepstakes in Western Massachusetts. Ameristar Casinos, of Las Vegas is proposing a casino for Springfield, the authority that owns the Mohegan Sun in Connecticut is proposing one for Palmer and MGM Resorts International of Las Vegas wants to build one in Brimfield.
“I’m excited,” said Rep. Joseph F. Wagner, a Chicopee Democrat who was a key author of the state’s casino law, after the casino bill was approved. “It’s been a long road.”
Hard Rock International, of Florida, may select a site in a different community in Western Massachusetts, after its initial location in Holyoke ran into opposition from new Mayor Alex B. Morse. Penn National Gaming, of Pennsylvania, has also said it will propose a casino for Western Massachusetts.
The law authorizes three $500 million casino resorts in different geographic zones around the state, including one for anywhere in the four counties of Western Massachusetts. The law also includes a single, $125 million slot facility that could be anywhere in the state.
Wagner, too, predicts construction on a casino resort won’t begin for some time, perhaps in about three years with doors opening in about five.
In an interview in late November, Wagner also said a slot parlor, meanwhile, could be open within a year or 18 months.
Crosby spelled out an extensive process that must first be completed by the gaming commission, which, he said, is not expected to be up and running until mid-March.
The commission plans to hire between 100 and 200 employees, design bids to approve licenses and draft regulations to guide the process, according to Crosby.
In the meantime, cities and towns in Western Massachusetts, notably Palmer and Springfield, are working with casino developers. Municipal leaders in host and surrounding communities need to reach agreements with casino operators as part of the application for a license.
After that, up or down votes on those agreements would be held in host communities.
“Communities that want this and can collaborate with developers and figure out how to get this to serve their local interests, as well as the commonwealth interests – more power to them,” Crosby said. “I think it’s great that communities are working on this already.”
It’s unclear if any local votes on casinos will take place this year because the commission needs to write regulations for the proposed votes. Absent those regulations, Crosby said, developers should think about whether they should proceed to ballot questions.
Joseph F. Wagner
“If I were a developer, I’m not sure I would know how to thread that needle just yet,” Crosby said.
The state law, signed on Nov. 22 by the governor, is designed to create jobs, boost local and state government revenues and attract tourism.
State Sen. Stephen M. Brewer, a Barre Democrat and chairman of the Senate Ways & Means Committee, said three casinos and a slot parlor could generate up to $1.8 billion in sales each year.
The casino law mandates 25 percent tax on casino gross revenues and 40 percent tax on the slot parlor. That would raise in the vicinity of $400 million a year in casino tax dollars, Brewer said.
The law carves up that tax money and sends certain percentages to programs such as gambling addiction, local aid, tourism, mitigation of casino effects on services such as transportation and education in host and surrounding communities, reducing debt and local capital projects.
The Palmer casino, for example, would cost about $600 million and would be located on 152 acres off Exit 8 of the Massachusetts Turnpike. It would create about 2,500 to 3,000 permanent jobs to operate the casino and 1,200 to 1,500 construction jobs each year during up to two years of building, according to company officials.
Mitchell G. Etess, chief executive officer of the Mohegan Tribal Gaming Authority, said the company has “a huge advantage” because it proposed the Palmer casino four years ago and has had a local storefront office for more than two years.
“We feel very, very good about all the time and effort we’ve put in,” Etess said. “It will certainly pay dividends for us.”
Etess said he understood the state wants to take the time to assure casino gambling is done right in Massachusetts. At the same time, Etess said, “The sooner they get going, the sooner they get jobs and tax revenues.”
In Springfield, Ameristar closed in January on a deal to buy 41 acres at the old Westinghouse site on Page Boulevard in Springfield. The company said it paid $16 million.
Ameristar said the project would create 2,000 construction jobs and 2,800 permanent jobs. Ameristar would buy the land from an affiliate of the O’Connell Development Group Inc., which had anticipated a large-scale retail project on the site.
A lot of factors will determine the winning bid for Western Massachusetts, including a casino’s plans to work with vendors and entertainment facilities and to hire locally including minorities, women and veterans. Operators also need to assure access to the site and they need to reach strong agreements with municipalities that would host casinos.
Troy Stremming, a senior vice president for Ameristar, said it’s important that Springfield land the single gaming license for Western Massachusetts. As a casino host community, Springfield would receive millions of dollars in property taxes and meals taxes, thousands of jobs, plus any benefits included in an agreement with a casino company.
Stremming said his company wants to market all of Springfield, not just a casino in Springfield. “It would be an economic shot to the arm for the city of Springfield,” Stremming said.
MGM announced in January a plan to buy 150 acres in Brimfield close to the Massachusetts Turnpike. The company estimated the development, tentatively named Rolling Hills Resort, would create 3,000 permanent jobs along with several thousand construction-related jobs.
Casino companies likely will need to wait until next year to submit bids.
Crosby said there are two ways to design bids. The commission could approve a set of guidelines and financial standards that he said would make it relatively easy to compare proposals and make objective decisions.
Another possibility, he said, is to write a general request for bids that would give companies some leeway for offering creative ways to boost job creation and other economic benefits of casinos. Companies also need to offer approaches for reducing problems caused by casinos including compulsive gambling and crime.
“Is there some way we can approach this, which will really maximize the public good?” Crosby said. “If at the end of the first year, we can have that conversation going and people were looking at this from that standpoint, that would be a success.”