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A Conversation with the ‘Casino Czar’

Stephen Crosby says the Gaming Commission will be a regulator

Stephen Crosby says the Gaming Commission will be a regulator, but it may also collaborate with the casino industry to maximize the public good.

Stephen Crosby, the recently named chair of the Massachusetts Gaming Commission, says the top priority for his panel is to conduct a process that will be above reproach. But in many ways, that test could become a mere baseline for the commission, he told BusinessWest in a wide-ranging interview, adding that the five-member body could go well beyond the role of regulator and become what he called a “proactive participant” in the process of optimizing the advent of casino gambling for the public good.
Transparency.
That’s a word Stephen Crosby used very early and quite often as he talked about the process for determining how casino licenses will be awarded in the Bay State. Named chairman of the state’s Gaming Commission roughly three months ago by Gov. Deval Patrick, Crosby doesn’t know everything about how that process will shake out — actually, he doesn’t know many things, right down to where his office will be — but what he does know is that it will be a very public, highly transparent procedure.
In short, there shouldn’t be any doubts about whether the selection process was conducted fairly, honestly, and free of politics, said Crosby, who sat down with BusinessWest recently at the Newton Marriott to discuss what he knows and what he believes about this critical juncture in the state’s history, during which all eyes will be on him and the four other commission members, due to be chosen by the end of next month.
“Nothing will be as public as this,” said Crosby, who will step down at least temporarily from his role as dean of the John W. McCormack Graduate School of Public Studies at UMass Boston to take on his new role. “The governor wants this to be a clean process, and we do have to figure out how to maximize transparency, which goes to the issue of having the public and participants think this was on the level.””
But while he wants the process to be above reproach — something a similar process in Pennsylvania certainly wasn’t (more on that later) — Crosby himself wants much more from it. Indeed, he told BusinessWest that he believes the Gaming Commission may be able to partner with developers to “optimize” (another word he used often) the coming of casinos to the Bay State.
“There’s another metric for success beyond that baseline,” he said, referring to a process that passes the fairness test. “And that is to figure out a way that, when this is over and people look back at the process, they say, ‘wow, these people really thought outside of the box; they thought of a way to take the leverage of expanded gaming in Massachusetts and turn it into a really creative public good.’”
And while the commission will ultimately be tasked with answering some huge questions about where casinos will go and how they will be regulated, it will get there by asking some, said Crosby, adding that the queries about what should drive the panel’s decisions will likely be put to many different constituencies.
“We’re going to want to know what smart, interesting people think,” he said, adding quickly that specifics of the process are far from being settled. “I think we’d want to ask everyone we could think of asking — all the affected constituences, people with experience in this, people from the affected communities, religious leaders, and the parties [developers] themselves; I think we’d want to ask them to help us think creatively and determine why it’s good to do this or bad to do that.”
Crosby acknowledged that there is no manual, or road map, for this assignment, and that this is both part of the challenge and opportunity awaiting the commission — a body that almost always appears in print with the adjective ‘powerful’ preceding it — and something that appealed to him when asked by the governor to take the job.
“Given that the issue of whether we’re going to have expanded gaming or not has been decided, the matter of who is going to be responsible for trying to see that it’s done in whatever is the appropriate way … that’s an interesting challenging that appealed to me,” he said. “This is so de-novo — there’s a piece of legislation, and that’s it, nothing else. There’s no office space, no rules or regs, and, other than what’s in the law, there’s no standards.
“What I found so interesting about this,” he continued, “was the chance to take something from absolute ground zero to, hopefully, the end of the process, where the public and participants thought the process was on the level.”

Background — Check
Crosby, 66, said that, for the record, he’s “never been much of an enthusiast of gaming as a way to raise revenues,” but has been pragmatic in his outlook.
In a 2003 Boston Globe op-ed piece, he wrote during the casino debate that the state could hardly do worse with gaming than it did with the lottery system, which he said shortchanged communities to the point of “promoting gambling for the sake of gambling.”
He went on to write that casinos would likely funnel more gambling proceeds to cities and towns than the lottery and might actually reduce the overall amount of gambling, and “that’s probably a public-policy good.”
At this moment, though, his views on casino gambling are entirely moot. Casinos are now the law, he said, and it’s essentially his commission’s assignment to carry out the law — or at least those portions that pertain to the licensing and operating of facilities.
And he will bring to his role as chairman of that body vast experience in business — he’s started or managed several different companies — as well as public service, education, and law (he earned a J.D. at Boston University after earning a bachelor’s degree at Harvard).
His business background includes a number of ventures, ranging from a contract-publishing outfit called the Crosby Vandenburgh Group, which counted ESPN and AMC among its clients, to something called Interactive Radio Corp., which devised a unique method of delivering low-cost, two-way, GPS-informed data to in-vehicle radios and telematics units.
His public-sector experience includes stints as chief of staff for Gov. Jane Swift in 2002, and secretary of the state Executive Office of Administration and Finance under Gov. Paul Cellucci. And in recent years, he’s been called upon to lead or serve on a number of review panels; in 2009, Patrick chose him to head a panel studying compensation of top managers at the state’s quasi-public agencies, and in 2010, Crosby was chosen by the Supreme Judicial Court to serve on a task force assigned to review hiring practices in the patronage-plagued probation department.
He’s also been a frequent guest commentator in the media, with appearances, or op-eds, in forums ranging from CNN to the Boston Business Journal to the New York Times.
Called even-handed and a good listener by many colleagues and observers in press accounts since his appointment by the governor, Crosby said he believes the sum of his various experiences will benefit him during this high-profile, high-stakes assignment.
“I’ve been deeply involved in every aspect of public-policy making and public-institution building and evaluating,” he said of his résumé. “I’ve been an entrepreneur, I’ve had experience with the press, I know a lot about public and private finance, and I’m a lawyer.”
He’s already had to exercise some of these skills, especially working with the press. Indeed, he’s done a number of interviews like this one, in which he’s discussed the commission’s task and how it will likely be carried out, but he’s also had to answer questions about whether some of the decisions regarding casinos have already been made — literally, if not figuratively.
He was asked recently by the Boston Globe, for example, to comment on some analysts’ conjecture that the reason so few casino proposals have been developed for the eastern region of the state (one of three created by the gaming legislation) was because potential bidders believed a license for those who want to build at Suffolk Downs in East Boston was a fait accompli, due to support from legislative leaders.
“Any suggestion that this process is somehow wired is absolutely and totally false,” Crosby told the Globe. “I would hope no prospective operator would elect not to participate in Eastern Mass. due to a [misrepresentation], because it is absolutely not predetermined.”
What Crosby says he doesn’t have is extensive knowledge about the casino industry; thus, he intends to go about learning, a process that is already well-underway. He said he’s absorbing background in the form of studies on the industry regarding everything from return on investment to compulsive gambling, to “the key pressure points for income and expense.”
Meanwhile, he’s looking at best practices in other states, and also into what went wrong in Pennsylvania, where the process became mired in controversy and, eventually, lawsuits. Crosby is still learning about that experience, but has read some of the grand-jury reports.
“The commissioners felt tremendously under the gun to get moving — the state was in need of the revenue,” he said. “And I think the governing environment put pressure on them to move quickly.
“They either didn’t want to do or didn’t have time to do proper vetting of the parties involved,” he continued. “It was, at best, a poor process, and something I think we can learn from.”

Dicey Situation
When asked about the factors that will eventually determine which parties are awarded licenses — the $64,000 question on everyone’s mind — Crosby said there will be many considerations, some perhaps still to be determined.
He summed it up this way when talking about the requests for proposals (RFPs) that will eventually be issued and then evaluated — and the wording that may be included:
“Eliciting from the prospective providers what we really care about — after we’ve figured out what we’ll really care about — will be its own art form.”
Elaborating, he said many of the factors to be weighed are known (they’re in the law), and it all starts with what he called the ‘cleanliness’ of the proposition, meaning that the party behind the proposal is above reproach. Other matters that will play into the decisions, he continued, include everything from economic development, with the matter of quality jobs being one of the priorities laid out in the legislation, to the impact on host communities, surrounding communities, and entertainment venues in a given region.
And one of the issues for the commission to decide, he went on, is just how subjective or objective the decision-making process will be.
“We’ll have to decide to what extent we want to try to objectify the ratings,” he explained, adding that doing so “is good from a standpoint of transparency and clarity of analysis, as opposed to subjectifying the analysis, which gives us more flexibility to think broadly and outside the box about how these values are manifest.
“There are benefits to both approaches,” he continued, “and that’s something the commission will have to figure out.”
And while doing so, the commission will also have to determine the level to which it wants to proactively engage the casino industry and impacted constituencies in that process of optimizing expanded gaming.
“We know we’re going to get some jobs, and we know we’re going to get some revenue to the state,” he explained, “but all of these people that have a financial interest in being part of this are A, smart and creative; B, they’re resourceful; and C, we would like to think about how we get their intelligence, creativity, and resources to not only advance their financial good, but also a broader public good.
“Is there a way to optimize the greater good beyond just not doing this badly?” he continued, noting that this is a compelling question that the commission will have to answer. “And whether we are able to articulate any such aspirations remains to be seen, but these are aspirations that I think will be interesting and provocative to talk about, and that we’ll be asking everyone around to help us with.”
Summing things up — and speaking for himself and not the committee, obviously — Crosby said he hopes the panel will ultimately think proactively and decide, with the help of the various constituencies and interest groups involved, whether it can go beyond being a mere regulator and also step into the role of partner with the casino industry.
“Do we want to collaborate with the industry in maximizing the public good?” he asked. “Should we be proactive in suggesting ideas, locations, and business strategies? Should we try to learn about and contribute to the discussion about potential competition with other states?
“I don’t know the answers to these questions,” he went on. “We are absolutely going to be a regulator, there’s no question about that, and an exceedingly rigorous regulator at that. But should we also be a proactive participant? That’s a question that needs to be talked about.”

The Bottom Line
When asked if the process that lies ahead is in some ways intimidating, Crosby said that’s too strong a word.
“We’re going to try to extrapolate from the multiple experiences that have been had across the country, and couple that with our own probably considerable experience, as well as a commitment to be as collaborative as humanly possible,” he explained, “to do well something that has been done many times before.
“Is this intimidating? No, but it will certainly be challenging,” he continued, adding that there are many things the public and casino developers can bet on from this commission — including that concept of transparency.

George O’Brien can be reached at [email protected]

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