Cloud of Uncertainty Hangs Over Casinos

This should be a time of great anticipation and, yes, celebration for some players in the casino industry — and, likewise, in communities like Springfield, where there seems to be little that can prevent MGM Resorts International from winning a license to build and operate an $800 million resort facility in the city’s South End.

But it isn’t — at least to the extent that it could be.

That’s because there’s a very dark cloud of uncertainty hanging over gaming in Massachusetts, and it comes in the form of a lawsuit pending before the state Supreme Judicial Court. That suit was filed by the backers of efforts to repeal the state casino law passed in 2011. They gained enough signatures to place a referendum question on this November’s ballot, but then saw Attorney General Martha Coakley rule that the petition was unconstitutional because it would “impair the implied contracts between the [gaming] commission and gaming license applicants” and illegally “take” those contract rights without compensation.

Repeal backers then took their case — quite literally — to the SJC, which is slated to take up the matter in the late spring and render a decision by June or July. That should be a few months after the commission chooses the winning applicant for the lone slot-parlor license, and several weeks after it issues licenses for resort casinos in Boston (where there are two contenders) and Western Mass., where MGM is the only player standing.

Suffice it to say that, if all goes as expected and MGM wins this region’s license, most of the celebrating will be muted, if not postponed entirely, until the SJC settles what will be one of the most closely watched cases to come before it in years, and one where some experts are saying it’s hard to predict the outcome.

To say that there is a lot of stake would be a huge understatement. If the repeal backers win in court, and a majority of voters support their effort at the polls, then there will likely be no casino era in Massachusetts and, thus, no $800 stimulus to the Greater Springfield economy. And the millions, if not tens of millions, spent by the casino companies to bring their proposals to this stage would be wasted.

That explains why there is deep concern in the casino camps, and also why a coalition involving these players (including MGM) and the backers of casino gambling in this state has been formed to fight the repeal effort.

It is the coalition’s basic contention that the repeal initiative is, as Coakley ruled, unconstitutional, and amounts to the illegal taking of contract rights. In addition, they contend that the casino law passed in November 2011 is essentially working the way legislators intended it to, meaning that communities that don’t want a casino within their borders can vote such a proposal down (and many have), while residents who do support them can also control their fate at the ballot box, as voters in Springfield did.

Michael Mathis, head of the MGM’s so-called ‘Springfield initiative,’ summed things up nicely in recent comments to the press. “Our plan was endorsed by an overwhelming majority of voters,” he remarked. “It would be devastating to roll back all that has been accomplished and take away the promise of what it is to come.”

Citing a recent poll conducted by the Western New England University Polling Institute showing that 61% of Massachusetts adults support the establishment of casinos in the state (roughly the same number as in 2009 and 2010), some casino backers and gaming executives are confidently downplaying the likelihood that a repeal effort would succeed should it reach the ballot.

These individuals shouldn’t ever underestimate the ability of voters in this state to surprise them, or to attempt to rule by referendum. It happened with nuclear power plants, which were banned in 1988, and with dog tracks 20 years later.

It could happen with casino gambling, but we don’t believe the measure should come before the voters at all. It is our hope that the SJC concurs with Coakley and declares this bid unconstitional.

Unless or until it does, that dark cloud of uncertainty will continue to hover over the casino era in the Bay State.

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