Court ruling leaves New Bedford casino plan murky
The state is in a ticklish position having just won a lawsuit over a company that's seeking to open a casino.
On Thursday, U.S. District Judge Nathaniel Gorton ruled that the state's casino law does not violate the U.S. Constitution's Equal Protection Clause by giving Indian tribes preference. The judge dismissed the suit brought by KG Urban Enterprises, a developer hoping to build a casino in New Bedford.
KG Urban has said it plans to appeal.
In allowing for tribal preference, legislators were thinking about the Mashpee Wampanoag Tribe, which gained federal recognition in 2007, a status that makes it eligible to provide gambling on Indian lands in states where casinos are legal. The tribe does not have reservation lands, but has a land application under review with the federal Bureau of Indian Affairs.
KG Urban filed the suit the day Gov. Deval Patrick signed the casino law in 2011, alleging the gaming law, which gives preference to Indian tribes, amounted to a "race-based, set-aside."
Attorney General Martha Coakley's office, which defended the state in the KG Urban case, referred calls about the court decision to the governor's office and the Gaming Commission on Friday. Both offices declined comment.
Just where the court decision leaves the New Bedford proposal remains unclear. The suit was initially dismissed in February 2012, and then it took seven months for the First Circuit Court of Appeals to issue a ruling that sent it back into Gorton's courtroom. The case has been through a series of hearings over the 16 months since.
Meanwhile, the clock is ticking on KG Urban's application for a commercial license in New Bedford.
The developer is currently undergoing a background check by the commission's investigative unit and has until May to reach a host-community agreement with New Bedford. KG Urban has until July at the latest to have a citywide vote.
That's a difficult timeline, Clyde Barrow, a gambling expert at the University of Massachusetts Dartmouth's Center for Public Policy, said Friday.
KG Urban is already dealing with New Bedford Mayor Jon Mitchell who has expressed skepticism about the project and said publicly that he needs to be convinced the waterfront casino plan is the best thing for New Bedford.
Mitchell did not respond to a request for comment Friday.
KG Urban has made it clear that the looming presence of the tribe in Southeastern Massachusetts has made it difficult for the company to find a financial investor.
Gorton's ruling won't help, Barrow said. "It keeps them on the same track, the southeast is open for commercial bids, but because of the tribal overhang, commercial companies can't find investors," he said.
KG Urban is the only commercial bidder thus far in Region C, the name for Southeastern Massachusetts in the legislation.
Although the Gaming Commission has said it would welcome developers who lose out on bids in other regions of the Bay State to join the competition in Region C, they would face the same issues as KG Urban, Barrow said.
Even if KG were able to make it to the second phase, the detailed casino plans filed in other regions of the state included thousands of pages of documents, Barrow said.
Consultants have been working on the plans and have spent millions of dollars to complete them, he said. "They've been working for months, if not years," Barrow said. "I wouldn't be surprised if the commission has to move (the Region C) deadline back a year."
One of the architects of the state's gaming law who was an advocate for granting tribal preference, says this week's ruling vindicates his position.
"We were facing a situation that no other state had faced," state Sen. Stanley Rosenberg, D-Amherst, the Senate's point man on casinos, said Friday. He said the state was trying to be fair and honor federal law, and still build a competitive marketplace.
"We were trying to craft a law that would allow for the development of a robust marketplace in view of the fact that a tribe was likely to be recognized and likely to receive land in trust and therefore was a factor to be considered. ... I'm pleased the court saw what we were trying to do, and they felt that we found a reasonable balance."
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