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Showing posts with label Goodwin Proctor. Show all posts
Showing posts with label Goodwin Proctor. Show all posts

Thursday, May 5, 2016

Massachusetts Gaming Update: Commission Rejects Application for Resort Casino in Brockton




Massachusetts Gaming Update: Commission Rejects Application for Resort Casino in Brockton







The wait is over and the decision is in. On Thursday, April 28, the Massachusetts Gaming Commission voted 4-1 against awarding a commercial license to Mass Gaming & Entertainment, LLC to build a resort casino in Brockton. After evaluations and deliberations, the Commission’s majority determined that Mass Gaming’s proposed plan did not meet expectations for a resort casino in Southeast Massachusetts, also known as “Region C.” In addition, the Commission found that competition between the proposed Brockton casino and the Mashpee Wampanoag Tribe’s casino in Taunton might threaten successful gaming in Region C.
The Commission evaluated and rated Mass Gaming’s proposal for a resort casino in terms of Finance, Economic Development, Building & Site Design, Mitigation, and General/Overview. The Commission found the proposed plan at least “sufficient” in four of the five categories, but ultimately decided the proposal was “insufficient” for its failure to demonstrate that it would be a “destination resort casino” rather than a “local convenience casino.”
While the Commonwealth’s lone slot parlor has been operating in Plainville for just under a year, Massachusetts does not currently have an operating full-flown destination resort casino. The Commission has awarded licenses for commercial casinos in Springfield and Everett, but the development of those projects is still underway. If the Commission had also granted a commercial license to Mass Gaming, there would have been one slot parlor and four resort casinos in the state, including two resort casinos in Region C. While proponents for expanded gaming anticipate a strong customer base, four resort casinos may have been too ambitious without an existing baseline to measure customer growth for resort casinos.
As a result of the Mashpee Wampanoag Tribe breaking ground for its First Light Resort & Casino on April 5, the Commission had to consider the consequences of having both a tribal casino and commercial casino in Region C—specifically, oversaturation of the resort casino market and the potential loss of revenue share under the Tribe’s compact with the Commonwealth. This potential loss of revenue share had to have factored significantly into the Commission’s decision.
Under the terms of the Mashpee Wampanoag Tribe’s compact with Massachusetts, the state receives 17 percent of the tribe’s gaming revenues if the tribal casino is the only casino located in Region C. If, however, the tribal casino competes with a commercial casino in the region, then the Mashpee Wampanoag Tribe does not have to pay any revenue share—zip, zero, zilch, nada—to the state. Consultants and commentators warned that the tribal casino would reinvest its tax savings to make its resort casino bigger and better and, ultimately, draw more customers and profits than a competing commercial casino. Evidently, the Commission agreed that, in a competition between a tribal casino and resort casino in Region C, the Commonwealth would be the hardest hit.
This despite the pending lawsuit challenging the Department of the Interior’s decision to take land in trust for the benefit of the Tribe—the very decision which has allowed the Tribe to move forward with its plans to build a tribal casino in Taunton. But the Commission has stated that it could revisit the issue should the Tribe be unable to deliver the tribal casino that the Commission is expecting.



Monday, May 13, 2013

Pulling Back the Curtain on MA Casino and Slots Parlor Applicants




Pulling Back the Curtain on MA Casino and Slots Parlor Applicants

 
By Bob Crawford and Noah Spaulding
On March 28, 2013, the Boston Herald reported that Vornado Realty Trust, one of the largest shareholders of Suffolk Downs, was divesting its interests in Sterling Suffolk Racecourse, LLC (the Suffolk Downs related entity that had submitted an application for a Massachusetts casino license) because its executives were unwilling to submit to the background checks that are required as part of the application process. At the March 28, 2013 meeting of the Massachusetts Gaming Commission, the Commission unanimously approved allowing Vornado to transfer its interests to a blind trust, over which Vornado would hold no control, so that its interest could be sold without slowing down the application process (noting that any prospective transferee of such interests would have to be willing to comply with the same background check requirements that Vornado had balked at). While the Vornado issue was resolved (other than lingering curiosity as to what specifically they were uncomfortable with disclosing), it served to highlight the depth and breadth of the background checks, as well as their importance to the process.
Questions regarding the need for the initial $400,000 application fee for Phase 1 applicants and the reasons why Vornado may have refused to participate in the background check process begin to become clearer when you see the scope of the Business Entity Disclosure Form and Massachusetts Supplemental Form (copies of which are available on the Commission website). The forms require extensive disclosure not only regarding the financial strength of each applicant and such applicant’s ability to follow through with their proposed casino developments, but are also intended to ensure each applicant meets the “high standards for good character, honesty [and] integrity”, requiring disclosures relating to dozens of topics including:
  • Compensation of key executives and employees
  • Current and prior personal investments
  • Criminal history
  • Whether any officer or executive has been asked to submit to a polygraph test
  • Political contributions
  • Fifteen years of residency information
  • Motor vehicle license suspensions
205 CMR 116. Those provisions require that not just the actual applicant submit to the background check process, but also each director and officer of such entity, and, in the judgment of the Commission, any other member, shareholder, lender, employee, agent, executive or other related person. This is necessary because each of the applicants is a limited liability company, most of which were formed within the past year explicitly for the purpose of submitting a license application. Given the often complicated multi-tiered structure of many of the entities applying for licenses, the Commission was given broad discretionary powers to require disclosure from potentially hundreds of individuals and entities. On May 6, 2013, the Commission released the list of “qualifiers” for each applicant, those individuals and entities that are initially being required to submit to the background checks as part of the vetting process. For example, Sterling Suffolk Racecourse, LLC, the applicant with the most “qualifiers”, has 56 individuals and entities that are subject to review. Further complicating the process is that many of the “qualifiers” are foreign nationals or entities, such as Dubai World and Infinity World (Cayman) Holding, both “qualifiers” of Blue Tarp reDevelopment, LLC (better known as the MGM applicant). In addition to the disclosure forms, teams comprised of active Massachusetts State Police officers and experts from Spectrum Gaming and Michael & Carroll (which includes former FBI agents, forensic accountants and former prosecutors) are reviewing tens of thousands of pages of documentation and traveling as far as China to conduct interviews and investigations.
In 2009, in a 79-page Special Report to the New Jersey Casino Control Commission, prepared in connection with MGM’s plans to open a casino in New Jersey, significant questions were raised regarding possible ties to Asian organized crime of Stanley Ho, the father Pansy Ho, MGM’s proposed joint venturer. The comprehensiveness of that investigation, which involved several trips to China and Macau and 35 sworn interviews with 17 individuals and various international law enforcement agencies, provides an illustrative example for the current scrutiny of the Massachusetts casino applicants. While Stanley Ho was not directly involved in the proposed development, the report noted that ninety percent of the funds being committed by Pansy Ho were derived from her father, and the report concluded that she was susceptible to her father’s influence, and therefore an unsuitable partner. Neither Pansy Ho nor Stanley Ho is listed as a “qualifier” under MGM’s current application in Massachusetts, but these are the types of red flags that do not show up on the balance sheets of the applicants but will nonetheless be of great importance given the non-financial aspects of the Commission’s determinations on suitability.
Further complicating the issue of background checks is the fact that host communities, those cities and towns in which the applicants propose to build casinos, are actively engaged in negotiations with the applicants to approve the host community agreements which are a requirement for the approval of any application and the granting of a license. On April 22, 2013, the Commission promulgated an emergency regulation that prevents host communities from holding voter referendums until the Commission had made its suitability determinations. 
 
The regulation, however, contained some exceptions which allow for host communities to conduct public referendums prior to the suitability determinations, so long as the governing body of the city or town approves such action and take other steps, including an extensive public education campaign. However, the dangers of holding such a public vote are obvious, because even if an applicant enters into a host community agreement and receives the necessary public vote, their application might be deemed unsuitable as a result of issues uncovered during the background check process.
While the host community agreement negotiations, and potential public votes, are beginning to come together, the background checks are not expected to be completed for at least another month.
 
 
 

Sunday, March 3, 2013

5 Years Made Sense!



Lawyer plays both sides of the casino table



The governor's former legal adviser on Indian casinos, now working in the gambling practice of a private law firm, was actively involved in establishing the same commission she now lobbies, Massachusetts Gaming Commission emails show.
 
In dozens of emails, released by the commission after a Times public records request, E. Abim Thomas emerges as a trusted adviser to commissioners on hiring consultants, vetting law firms and providing guidance on federal Indian gambling laws.

The Times first reported Thomas' jump from the Patrick administration to the Boston law firm of Goodwin Procter in December and requested the emails at that time.
 
After the Times raised questions about a possible conflict of interest, a state Ethics Commission official in an email to Thomas reiterated it had cleared her to practice gambling law even though state law requires a one-year cooling-off period before a state employee can go before an agency he or she had direct contact with as an employee.
 
Neither Thomas nor gaming commissioners agreed to be interviewed for this story. In an email from Goodwin Procter, spokesman Lee Feldman reiterated Thomas' role had been cleared by the Ethics Commission.
 
"We remain convinced that Ms. Thomas has fully and completely complied with all ethical and legal requirements under Massachusetts law and the state's Rules of Professional Conduct for attorneys," the firm's statement reads. "Based on specific guidance from both the firm's Ethics Advisory Committee and the state Ethics Commission, we believe that her work in this area meets all legal and ethical standards and is entirely appropriate."
 
In December, former state Attorney General Scott Harshbarger, a casino critic, told the Times that Thomas working for Goodwin Procter on casino interests "raises with the public the appearance that inside information and influence is now being used for private individuals rather than the public interest."
 
In a more recent interview, state Sen. James Eldridge, D-Acton, a casino opponent who pushed for a five-year cooling-off period for legislators to work for gambling interests, said Thomas is an example of why he wanted stricter rules.
 
"It's going to cast doubt on people's trust in government," Eldridge said. "Even if the letter of the law was followed, my greater concern here is, once the gaming commission makes the decision where to locate casinos, is that it will create more temptation for those in government to make the jump to work for a developer or a casino because of the lucrative financial opportunities."
 
Feldman's email downplayed Thomas' role in establishing the gaming commission, saying she never sat in on interviews for commission consultants because of prior commitments, and the bid documents she passed on for use by the commission were used by the governor's office for other matters.
 
The dozens of emails released by the gaming commission paint a different picture of the role Thomas played in shaping the agency.
 
"Thank you so much for all your help getting the commission up and running — I'm not sure what we could have done without you!" Janice Reilly, the commission's chief of staff, wrote in an email congratulating Thomas on her honeymoon and new job with Goodwin Procter.
 
In another email, Commissioner James McHugh, a retired judge, thanks Thomas for her careful and thoughtful counsel on the compact.
 
"The commonwealth is by far the better for your careful stewardship of that process and for the thought and diligence you brought to other matters you faced while working for the governor," McHugh wrote. "Have a wonderful trip and, after you return, I look forward to working with you in your new capacity."


CONTRADICTORY OPINION

Thomas was one of the chief advisers for Gov. Deval Patrick in a compact with the Mashpee Wampanoag Tribe that was rejected in October by the federal Bureau of Indian Affairs. The bureau considered the 21.5 percent of gross gambling revenue to be too lucrative for what the tribe was receiving from the state in concessions. Some aspects of the compact were deemed illegal by Kevin Washburn, assistant secretary of the bureau.
 
Later this month, the gaming commission will decide whether to open Southeastern Massachusetts, known as Region C in the state law that authorizes casinos, to commercial bids or to allow the Mashpee Wampanoag Tribe more time to clear federal hurdles for its proposed $500 million Indian casino in Taunton.
 
Thomas, in her new role as a private attorney, already has written on behalf of an unnamed client giving a completely contradictory opinion to the one she had given commission Chairman Stephen Crosby in an email months earlier while she was still on the state payroll, the emails released by the commission show.
 
Her Nov. 27 letter, written on Goodwin Procter letterhead, states that the rejection of the compact by the bureau was in effect a failure by the tribe to meet a July 31 deadline in the state's Expanded Gaming Act, which she helped craft.
 
"If the July 31 deadline was not met, then the commission is obligated under the Expanded Gaming Act to request applications for a commercial license in Region C," Thomas wrote.
 
On Aug. 2, just after the initial compact agreement was ratified by the state Legislature, Thomas answered a series of questions raised by Crosby in an email. One of those questions was whether a rejection by the bureau, which was hypothetical at the time, would constitute the tribe missing its deadline.
 
"We have not interpreted the statutory language to mean that," Thomas wrote. "The statute required the Legislature to approve the compact with the governor by July 31 and the Legislature satisfied that requirement."
 
Goodwin Procter is unfazed by Thomas changing her opinion to suit her client. "Internal Goodwin Procter communications concerning client matters are confidential," Feldman wrote.
 
"However, nothing prohibited Ms. Thomas from advocating a view in her public comment letter to the commission that differed from her views of the governor's office that she may have communicated during her tenure as a member of the governor's staff."


CELEBRATORY LUNCH

The tribe, which hosted Thomas and other state leaders at a celebratory clambake in August where lobsters were the main course, has declined to comment publicly on her change of jobs or her change of opinion. The Mashpee tribe is in a tenuous position because it still has to play nice with the governor's office as negotiations on a new compact are at a critical stage.
 
In a letter to the commission, a tribe lawyer picked apart Thomas' Goodwin Procter letter. The commission can open Region C to competitive bids only if it concludes the "tribe will not have land take into trust," the letter states.
 
The tribe's federal land application is still pending. In February, the bureau issued an advisory opinion, released by the tribe, announcing the federal agency is moving ahead with review of the application as an "initial reservation" for land in Mashpee and Taunton.
 
The hundreds of documents turned over by the gaming commission show Thomas not only advised the commissioners on key legal issues, but that she had a friendly relationship with them as well.
 
A series of emails show Crosby and McHugh inviting Thomas out for "lunch (or drinks or breakfast; whatever is most convenient for you)" to celebrate her wedding. They settle on lunch June 28 at Hillstone Restaurant in Boston, the email exchange shows.
 
McHugh attended a going-away party thrown for Thomas. All of the commissioners were invited, but Crosby and Commissioner Gayle Cameron were out of the country at the time on a gaming commission trip.
 
Another email indicated that McHugh planned to be a guest speaker at Goodwin Procter after Thomas joined the firm. Feldman, in his email, said the appearance never took place and had nothing to do with Thomas.
 
The gaming commission, which has promised an open and transparent process, refused repeated requests to make Crosby and McHugh available to answer specific questions. Instead, they issued a statement through spokeswoman Elaine Driscoll, reassuring that commissioners can remain impartial.
 
 
 
They've already proven they're not impartial!
 
"The commission is committed to a fair, transparent and participatory process for all of its decisions," the email states. "All five commissioners are fully committed to that process and will rigorously employ it with every decision they make regardless of the persons or entities affected by those decisions."
 
- See more at: http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20130303/NEWS/303030348/-1/NEWSLETTER100#sthash.tLuqOJN2.dpuf

Saturday, December 15, 2012

E. Abim Thomas: Ethics?





Governor's former casino expert at odds with tribe
One of the governor's former top legal advisers and his key negotiator with the Mashpee Wampanoag Tribe is now representing a potential competitor before the Massachusetts Gaming Commission.
 
E. Abim Thomas, who joined the firm of Goodwin Procter LLP in early November, wrote a letter to the commission Nov. 27 for an unspecified client urging commissioners to open up Southeastern Massachusetts, known as Region C in the gaming legislation, to competitive bids.