Suffolk Downs has no clothes

Suffolk Downs has no clothes
By Joan Vennochi / Globe Columnist / October 30, 2013

The Suffolk Downs casino proposal is looking a lot like the emperor who wore no clothes.

The racetrack was once seen as a shoo-in for a casino license. But after background check problems, Caesars Entertainment is gone, leaving a casino proposal without a casino operator. Vornado Realty, one of the biggest investors, put its interest into a blind trust rather than undergo a background check.

 

In their suitability assessment, state regulators also expressed worries about the financial stability of Richard Fields, Suffolk’s largest shareholder.

 

Minus Caesars, the Massachusetts Gaming Commission just pronounced Suffolk Downs suitable for a casino. But the current proposal is a drastically stripped-down version of its original self, leaving its backers as naked as the sovereign in the Hans Christian Andersen fairy tale. Unlike the emperor, they already know they are walking around in their birthday suits. They’re just hoping East Boston voters are too uninformed or too desperate for jobs to see that when they vote on Nov. 5.

 

Everything about this proposal was built around Caesars, the corporate culture it represents, and the promises it made to Bostonians in general and to East Bostonians in particular. The ballot question summary describes Caesars as the operator. The host agreement between the city and Sterling Suffolk Racecourse specifically references “Caesars Massachusetts Management” and cites “the Caesars standard” as the basis for the agreement.

 

There’s a clause in the Boston host agreement that authorizes transfers of interest, as long as the city approves. And it’s possible that a new casino operator will build exactly what Caesars promised and sign off on every condition set forth in the host agreement. But do you really want to roll the dice on that, if you’re an East Boston resident contemplating the impact of a casino on traffic, crime, and your property values?

 

Why even trust the judgment of the remaining Suffolk Downs partners? They contend they were “blindsided” by disclosures that Caesars — their partner for two years — faced serious questions from state investigators. The partnership that owns the track “relied on Caesars contractual obligation to keep us informed,” track lawyer Bruce E. Falby told the state gambling commission. “These obligations were not met.” Caesars representatives say they were blindsided, too.

 

That hardly inspires confidence in this crew’s ability to spot trouble up front or hold themselves to the highest standard — or in Mayor Menino’s oversight up to now.

 

The mayor has long championed Suffolk Downs and is still promoting it. Martin J. Walsh and John R. Connolly, the mayoral candidates vying to succeed him, still support a casino if East Boston wants it. During Tuesday night’s debate, Walsh said he would vote “yes” if he lived in Eastie — at least earning points for taking a stand. Connolly wouldn’t say how he would vote as an Eastie resident, although he did answer “probably not” when asked if he would support a casino in his own neighborhood.

 

The mayor and his would-be successors are unwilling to state the truth: Without Caesars, a “yes” vote isn’t a vote for a specific plan. It’s a vote for a mirage. Their starting premise is that East Boston with a casino run by a mystery operator is better than East Boston without a casino.

 

As for the Suffolk Downs team, they want voters to believe the severed partnership with Caesars means nothing more than eliminating the laurel-wreath logo associated with the brand. Their glossy new information package eliminates all references to what they once proudly touted — the Caesars standard.

 

As voters confront this Suffolk Downs fairy tale, the one about the emperor reverberates.

 

Swindlers told the emperor they could make him a suit out of the most beautiful cloth, which only stupid people could not see. And so, the emperor walked through town in these garments, with everyone exclaiming how beautiful they were because they did not want anyone to call them dumb.

 

Then a child called out, “But he has nothing on” — just like the Suffolk Downs casino proposal.

http://www.boston.com/opinion/editorials/2013/10/30/suffolk-downs-has-clothes/GwlSmOMz7iQikiTNL2HDVJ/story.html

Caesars and Organized Crime?

Caesars dumped from Suffolk Downs casino plan

By Mark Arsenault

| Globe staff October 19, 2013

Caesars Entertainment, one of the biggest names in the gambling industry, has been dropped from a casino venture at Suffolk Downs because of grave doubts that the international gambling giant would pass its mandatory state background check.

The racetrack’s ownership team intends to replace Caesars with another casino manager in its effort to win the sole Greater Boston resort casino license.

The stunning shake-up at Suffolk Downs comes less than three weeks before voters in East Boston and Revere decide the fate of the casino proposal in referendums and could provide casino opponents new ammunition to attack the project.

State casino investigators, charged with keeping people of questionable character out of the Massachusetts gambling industry, raised several concerns about the company, including a business relationship with a person alleged to have family members involved in organized crime outside the United States, said people familiar with the content of the investigators’ report.

 

The report, provided to Suffolk Downs late Friday, is not yet public. Redacted versions of the background reports generally become public the day the state gambling commission addresses the findings of each investigation at a public hearing. A hearing for Suffolk Downs is expected within two weeks.

After receiving a briefing from the commission’s staff Friday, Suffolk Downs said it is confident the track will be deemed suitable to bid for a license, just not with Caesars.

“As a result of the briefing we have asked our management partner, Caesars Entertainment, to withdraw as a qualifier from our license application,” Suffolk Downs Chief Operating Officer Chip Tuttle said in a statement Friday.

Caesars agreed Friday night to exit the project.

“Caesars Entertainment, which is licensed in more jurisdictions than any other gaming company, has decided to withdraw its application to develop a casino in Massachusetts,” a company spokesman said in an interview. “We believe that the Gaming Commission is attempting to set suitability requirements that are arbitrary, unreasonable, and inconsistent with those that exist in every other jurisdiction.”

Mayor Thomas M. Menino, who has long supported a Suffolk Downs casino, signed a host agreement with Suffolk Downs that would provide the city at least $32 million annually from a casino at the site. Menino has also maintained that preserving the integrity of the development process is paramount, said his spokeswoman, Dot Joyce.  [Those figures were based on irrational projections.]

“The mayor is very happy that the Massachusetts Gaming Commission has been diligent in their efforts,” she said. “While the mayor is pleased that Suffolk Downs is moving forward in seeking a new operator for their gaming operations, his first priority is protecting the interests of the city and especially the residents of East Boston.

“Our host community agreement includes, in small part, Caesars Entertainment, and the city will seek clarity in how [Friday’s] events could impact the overall agreement with Suffolk Downs.”

Suffolk Downs intends to maintain its current vision and design for the project, which it has presented at numerous neighborhood meetings.

Celeste Myers, head of the anti-casino group No Eastie Casino, questioned how a vote could go forward on Nov. 5 without the residents knowing who would operate the casino.

“This project has been about as transparent as pea soup,” she said.

Caesars loses a chance to win a piece of one of the most attractive emerging gambling markets in the United States. The move comes four months after South Korea rejected a casino bid in which Caesars was a major partner, due to concerns over the company’s high debt, according to the Reuters news agency.

For the state gambling commission, a new board just 18 months old, establishing standards that would force out such a major industry player could cement the state’s reputation as the toughest US jurisdiction in which to qualify for a gambling license.

In the commission’s background investigations to date, the five-member panel has already disqualified one bidder, Ourway Realty, the initial applicant at Plainridge Racecourse, after state investigators discovered that a key member of the company had taken more than $1 million from the struggling track’s money room.

Five applicants have passed background checks: Penn National Gaming, Cordish Cos., Raynham Park and partner Greenwood Racing, Mohegan Sun, and Rush Street Gaming. Rush Street abandoned its slot parlor bid in Millbury and currently is not an active applicant.

Even among those approved for a license, the commission has grilled casino executives over hiring practices, as well as business and personal relationships. By coming down hard on companies for old or relatively small concerns, the commission has seemed to leave itself little leeway to go easy on an applicant with a significant problem.

Caesars is a massive company, which owns or runs 54 casinos in 13 states and six countries, according to the company. It operates 39 casinos in the United States, including its Las Vegas flagship, Caesars Palace.

Caesars — led by chief executive Gary Loveman, who lives outside Boston — joined Suffolk Downs as a partner in 2011, bringing a household name in the gambling business to the Depression-era racetrack on the East Boston-Revere city line. Caesars acquired a small stake in the venture, about 4.2 percent, but had planned to earn lucrative fees running the resort.

The Suffolk Downs partnership includes Richard Fields, a casino developer and former Donald Trump associate; Joseph O’Donnell, founder of Boston Culinary Group; and others with small shares.

A New York property investment firm with about 20 percent of the project, Vornado Realty Trust, declined last spring to participate in the background checks. In March, the gambling commission let the company transfer its shares to a blind trust, with the understanding Vornado would divest from the project.

Suffolk Downs is competing with a Wynn Resorts proposal in Everett and a Foxwoods project in Milford. The gambling commission expects to choose a winner in early 2014.

http://www.bostonglobe.com/metro/2013/10/18/caesars-entertainment-dumped-from-suffolk-downs-venture/VvsDWIIzHvhnij61Akm6TJ/story.html

 

Suffolk Downs' Poor Judgement

We have been working almost around the clock to process what we know about Caesars Entertainment's exit from the Suffolk Downs casino application. While dozens of amazing, smiling volunteers fanned out across the neighborhood this morning to knock on doors and engage neighbors, our policy and communications teams were hard at work analyzing what this stunning news means for our campaign moving forward. Below, you'll find the press release we sent to the media, which contains a number of our top takeaways from last night's turn of events. Please make no mistake: our campaign is pushing full-steam ahead with its get-out-the-vote efforts, as we have every reason to believe a vote will still take place on Nov. 5. In this vein, we invite you to join us TOMORROW as we partner with the faith community and the Friends of East Boston for a neighborhood-wide Day of Unity and Action. We will join our friends from Friends of East Boston outside the Most Holy Redeemer Catholic Church (72 Maverick St.) at 1 p.m. From there, groups will spread out into the neighborhood to hand out materials door to door. We're also pleased to announce an event this coming Thursday designed specifically with our undecided neighbors in mind. In this forum, experts and community residents will have an opportunity to share their perspectives on ways a casino at Suffolk Downs will impact traffic, our local economy (jobs and small businesses), health, and community. Special guests will include former Congressman Bob Steele (CT) who will be reflecting on casinos' impact in his home state, as well as former Massachusetts Secretary of Transportation James Aloisi speaking about traffic impacts and Suffolk Downs' transportation plan. Here are the details:     "A Community Dialogue: What Does a Neighborhood Casino Mean for You?" Thursday, October 24, 6-8 p.m. Sacred Heart Church, 303 Paris Street (refreshments and Spanish translation will be provided) Let's take the excitement from the last 24 hours and allow it to light a fire under us to finish the job and defeat this casino at the polls on Nov. 5! Thank you all for your support, and we look forward to seeing you tomorrow.   Best, - Your No Eastie Casino leadership team Here's what we sent to the press today: Caesars' Exit from Casino Application Reflects Suffolk Downs' Poor Judgment and a Faulty Process   EAST BOSTON, MA - Oct. 19, 2013 - For more than a year, No Eastie Casino has pushed the City of Boston and Suffolk Downs to share more information about Suffolk Downs' proposed Caesars Entertainment Resort. After ignoring repeated calls for greater transparency and concerns about Caesars' solvency raised by East Boston residents, on Friday Suffolk Downs dropped the operations partner it chose in 2011 to run a casino in East Boston, Caesars Entertainment, only after state investigators informed them that Suffolk Downs likely would not pass the background check if Caesars stayed on. The Boston Globe reported that a number of concerns were brought to Suffolk Downs' attention, including Caesars' alleged business ties to organized crime.   But East Boston casino opponents say the stunning news late Friday demonstrates that residents cannot trust Suffolk Downs when it comes to whom they choose to bring into the neighborhood, said No Eastie Casino co-chair Celeste Myers.   "As recently as two months ago, Suffolk Downs owner Joe O'Donnell stated that Caesars was 'as professional as they come,'" Myers said, pointing out Suffolk Downs' frequent assertion that it shares Caesars' values. "Clearly, they did not do due diligence in vetting Caesars - a company with which they have had a relationship since 2011 - and only ended the relationship when forced to do so."   She added that Suffolk Downs has now picked two corporations, Caesars and Vornado Realty Trust, that have been unable or unwilling to pass background checks. In March, Vornado put its 19 percent stake in the casino plan into a blind trust after the majority of its executive team refused the state's mandatory background checks. To our knowledge, Vornado has not divested completely from the casino partnership and voters remain in the dark about who will pick up its nearly one-fifth share in the project. Caesars' sudden departure also raises serious questions about the value of the City's and Suffolk Downs' host community agreement and shows that the promises in the mitigation agreement were made to be broken. Many key elements of the mitigation agreement-including key components of the jobs and small business plans-were tied to Caesars' employee practices and Total Rewards programs. (Download our 16-page mitigation analysis here) No Eastie Casino leaders on Saturday formally called on Suffolk Downs to withdraw its casino application, in light of the information that emerged late Friday, and to share full details about their casino plans - including what they knew about Caesars and when they knew it - with the community at large. "Now, more than ever, our neighbors and voters are seeing the glaring problems in the Suffolk Downs casino plans and the flaws in transparency that have plagued this fight from the start," Myers said. "We hope Suffolk Downs and the City of Boston do the right thing and withdraw their support of this project. Until they do, our campaign will continue to reach out to and educate voters until we are victorious on Nov. 5."   * * * * * We've got the casino on the run! Would you consider making a donation to help us defeat it once and for all at the polls on Nov. 5? Thank you!   No Eastie Casino | 256 Marginal Street | East Boston | MA | 02128

Suffolk Downs Dumps Caesars

Suffolk Downs NeighborNo Eastie Casino

It does not come as news to any of us who have been following along that Caesars is unworthy of our trust. We have raised these concerns with our elected officials for the past few years, in many venues and forums. Clearly, the Massachusetts Gaming Commission has come to the same conclusion as we have. It is time for our elected officials and both mayoral candidates to petition the MGC to postpone this vote until a new applicant can be found and fully vetted. The entirety of the Host Community Agreement is based on the fact that Caesars, "A World Class Organization" would be running the casino. How can anyone, in good conscience, support this development. Anthony Petruccelli, Carlo Basile, Sal LaMattina, John Connolly, Marty Walsh, and Mayor Menino you promised that you would do what is right for the people of Boston and protect East Boston. There's still time for you to join the opposition. You may be late to the party but we will welcome you with open arms and we'll have signs and literature waiting for you. -- John Ribeiro

How can a community vote if they don't know their 'partner'?

Suffolk Downs Neighbor

Anthony Petruccelli, Carlo Basile, Sal LaMattina, Robert DeLeo, Kathy Reinstein, Peter Gill, It is time for you to stand with The People you have been elected to represent. You must call for a delay in the vote on the casino. How can the people vote if they don't know who will be responsible for the facility? -- John Ribeiro

Caesars Entertainment will be dropped from Suffolk Downs casino bid

Oct 18, 2013 10:06 PM

By Mark Arsenault, Globe Staff

Caesars Entertainment, one of the biggest names in the gambling industry, will be dropped from a casino venture at Suffolk Downs due to grave doubts that the international gambling giant would pass its mandatory state background check.

The racetrack's ownership team intends to replace Caesars with another casino manager, to continue their bid to win the sole Greater Boston resort casino license.

The stunning shake-up at Suffolk Downs comes less than three weeks before voters in East Boston and Revere decide the fate of the casino proposal at referenda, and likely will provide casino opponents new ammunition to attack the project.

State casino investigators, charged with keeping people of questionable character out of the Massachusetts gambling industry, raised serious concerns about the company's international business relationships, and other matters, according to people familiar with the content of the investigators' report, which was provided to Suffolk Downs late Friday. The report is not yet public.

After receiving a briefing from casino regulators Friday, Suffolk Downs said it is confident the track will be deemed suitable to bid for a license ' but not with Caesars.

'As a result of the briefing we have asked our management partner, Caesars Entertainment, to withdraw as a qualifier from our license application,' Suffolk Downs Chief Operating Officer Chip Tuttle said in a statement. The track formally asked Caesars in a letter Friday 'to resign as the manager ' and to take such other reasonable steps as may be necessary to cause the removal of Caesars from the Suffolk Downs gaming license application.'

Without the Boston project, the highly-leveraged Caesars loses a chance to win a piece of one of the most attractive emerging gambling markets in the US. The move comes four months after South Korea rejected a casino bid in which Caesars was a major partner, due to concerns over the company's high debt, according to Reuters.

For the state gambling commission, a new board just 18 months old, raising such strenuous concerns against a major player in the industry could cement Massachusetts' reputation as the toughest US jurisdiction in which to qualify for a gambling license.

In the commission's background investigations to date, the five-member panel has already disqualified one bidder, Ourway Realty, the initial applicant at Plainridge Racecourse, after state investigators discovered that the former track president had taken more than $1 million from the struggling track's money room.

Several applicants have passed background checks: Penn National Gaming, Cordish Cos., Raynham Park and partner Greenwood Racing, Mohegan Sun, and Rush Street Gaming. Rush Street abandoned its slot parlor bid in Millbury and at the moment is not an active applicant.

Even among those approved for a license, the commission has grilled casino executives over hiring practices, and business and personal relationships ' even relationships many years in the past. By coming down hard on casino companies for old or relatively small concerns, the commission has seemed to leave itself little leeway to go easy on an applicant with any major problems.

Caesars is a massive company, which owns or runs 54 casinos in 13 states and six countries, according to SEC filings. It operates 39 casinos in the US, including its Las Vegas flagship, Caesars Palace, where daredevil Evel Knievel famously almost killed himself trying to jump the ornamental fountains on a motorcycle.

Caesars, led by chief executive Gary Loveman, who lives outside Boston, joined Suffolk Downs as a partner in 2011, bringing one of the gambling industry's household names to the Depression-era racetrack on the East Boston-Revere city line. Caesars acquired a small stake in the venture, about 4.2 percent, but had planned to earn lucrative fees running the resort.

The company has similar arrangements in Ohio, where Caesars operates casinos and holds a minority stake.

The Suffolk Downs partnership includes horse and racing enthusiast Richard Fields, a casino developer and former Donald Trump associate; Joseph O'Donnell, founder of Boston Culinary Group; and several other partners with small shares.

A New York property investment company with about 20 percent of project, Vornado Realty Trust, last spring declined to participate in the background checks. The gambling commission in March allowed the company to transfer the shares into a blind trust, with the understanding Vornado would divest from the project.

Suffolk Downs is competing for a license with a Wynn Resorts proposal in Everett and a Foxwoods project in Milford. The gambling commission expects to choose a winner in early 2014. - See more at: http://www.boston.com/metrodesk/2013/10/18/caesars-dropped-from-suffolk-downs-casino-bid/Twvc6266iJgCjIdMR6ekFM/story.html#sthash.jroQSLKB.dpuf


http://mobile.boston.com/art/21//yourtown/news/east_boston/2013/10/caesars_entertainment_will_be_dropped_from_suffolk_downs_cas;jsessionid=1AE69E011A09BD5C2BEB06AFDBB0BCB5?single=1

Walczak Slams Vornado For Filene's Crater!

Bill Walczak Issues Warning To Gaming Commissioner

The mayoral candidate takes aim at Vornado Realty, who brought the city that crater in Downtown Crossing.

By David S. Bernstein|Boston Daily|August 12, 2013

 

Bill Walczak has carved out an anti-casino niche for himself in the Boston mayoral race. He is now about to up the ante (so to speak), with a letter to Gaming Commissioner Stephen Crosby—in which Walczak takes aim at Vornado Realty, widely blamed around town for the gaping hole in Downtown Crossing where Filene’s Basement used to be.

Noting that the Commission last week ruled out Plainville Race Track for a slot license, on the basis of its background check on ownership, Walczak calls on Crosby to perform a similar examination of Vornado, which owns nearly 20 percent of the Suffolk Downs venture.



Here is the full text of the letter, supplied to Boston magazine by the Walczak campaign:

Dear Mr. Crosby: I applaud the Gaming Commission’s recent decision to exclude the Plainville track from contending for a slot parlor license due to its problematic financial practices by its former CEO. This lack of oversight and dubious business practices should not be allowed in the Commonwealth.

For this reason I call on you to disregard the special exemption given to the owners of the Suffolk Downs track to avoid scrutiny of its 19.9% ownership interest by Vornado Realty Trust LLC (“Vornado”), and call on you to thoroughly vet them before allowing its gaming license application to proceed. Unless Vornado has a similar background check in the process by which you evaluate the Suffolk Downs application, or unless Suffolk Downs divests itself of the Vornado interest, you should reject the Suffolk Downs application. The Suffolk Downs application already has had special consideration limiting the area for which a vote is necessary before being allowed to seek licensure, as opposed to allowing the entire city to vote on the casino, as other communities were required to do. Now they’re asking for another special favor to not have an investigation of 19.9% of its ownership.

The Massachusetts Gaming Commission is empowered by M.G.L c.23K, §12(a)(1) to perform background checks on any potential gaming establishment to guarantee the integrity, honesty, and good character of the applicant. Therefore, I would like to ask the Commission to compel the Vornado Realty Trust LLC to participate in a thorough background check in order to be vetted for a gaming license. This company’s history in the city of Boston and elsewhere gives me great pause and provides for grave concerns for East Boston, Suffolk Downs and the city of Boston if they are allowed to go forward without scrutiny during your licensing process.

In March 2013, Vornado placed its 19.9% share of Suffolk Downs into a blind trust, allegedly with intentions to divest it to another owner. As of today, it has not divested its interests. Though Vornado’s share is technically owned by Hemenway & Barnes, we do not know the conditions of the blind trust nor the leverage Vornado has over the current operations of Suffolk Downs. Because we do not know how long they will wait to divest their shares, and do not know what influence it could have over gaming operations, the Gaming Commission should treat Vornado as owners of Suffolk Downs, and investigate them fully like all other applicants in the licensingprocess.

Vornado has proven worthy of public distrust. In Boston, it left a cavernous hole in Downtown Crossing at the former Filene’s Department Store site from 2008 to 2012. Were it not for Mayor Menino placing pressure on the company the site would likely still be fallow. In New York City, they left the site of the iconic Alexander’s Department Store to decay until the city was forced toprovide public funding to renovate the property. The Gaming Commission and the city of Boston should examine this company fully and to the extent allowed under the gaming law for the good of all involved.
I urge you to perform a thorough investigation of Vornado.
Thank you for your time and attention to my request.
Sincerely,William J. Walczak
Candidate, Mayor of Boston

Bravo, Yvonne Abraham!

But let's not forget that Caesars [previously Harrah's] is a bankruptcy waiting to happen.

Yvonne Abraham

Perilous rolls of the dice

 

By Yvonne Abraham | Globe Columnist August 08, 2013

These are supposed to be the lazy days of summer. But for players with ponies in the race for gaming licenses, this week has been extremely not relaxing.

On Monday, the Massachusetts Gaming Commission bared its teeth and bit, declaring Plainridge Racecourse unsuitable to run a gambling operation, nixing the harness track from the competition for a slots license.

Looking into the track’s finances, the commission’s investigators discovered malfeasance by president Gary Piontkowski so retro it was almost quaint. He had been siphoning cash from the ailing track’s money room for years — to the tune of, oh, $1.4 million.

We’ve seen this movie before, and the ending is always bad. Still, you can’t blame the guy for thinking he’d never get caught. According to the commission, his bosses were blissfully, even willfully, ignorant of his shenanigans. Then, when they could no longer look the other way, they allowed him to quietly resign, citing health concerns. They didn’t even demand the money back. In fact, they gave Piontkowski another $1.8 million for his shares in the company, plus two years’ salary. Gee, I can’t imagine why the commission would question their competence.

 

 

For years, Piontkowski put himself out there as the savior of workers in the state’s fading harness racing industry. In fact, his pilfering was speeding its demise.

No one relishes the workers’ suffering, but still it is heartening to see the commission doing its job so well, and so forcefully. That should make my fellow casino queasies happy — and worry those still in the license hunt.

Plainridge’s exit has put the former dog track at Raynham, its bitter rival for a slots license, in a pretty strong position. But though regulators found Raynham a suitable applicant, the vote on one track partner wasn’t unanimous: A few were hung up on the relationship between Robert Green and a disgraced businessman who did time for fraud — even though the two hadn’t done business since 1995. That squeaky clean standard ought to worry the people at MGM, which has proposed a casino in Springfield: The father of an MGM partner in Macau was linked to organized crime, a connection that might be too rich for regulators to stomach.


Vornado Realty Trust, a 20 percent stakeholder in the group proposing a casino at Suffolk Downs, balked at the prospect of the commission’s scathing scrutiny. Vornado, the company that earned Mayor Tom Menino’s ire by leaving that hole at the old Filene’s site, ensured his enmity would be eternal when it refused to submit to background checks, imperiling the entire Menino-backed casino plan.

Vornado transferred its shares to a blind trust, a move that allowed the application to proceed but left the question of who owns the place murky — murky enough that it should make this commission balk until the confusion is cleared up.

For Suffolk Downs, this week brought a double dose of stress: Their proposal, which seemed like a shoo-in a few months ago, has become a flashpoint in the mayoral race. Bill Walczak, the only candidate flatly opposed to a casino, has proposed an innovation district on the site instead. Suffolk DA Dan Conley is aggressively (and rightly) pushing for a citywide vote on the casino, rather than one in East Boston alone, which would be more of a sure bet. The rhetoric has taken a turn, with other candidates now careful to describe casinos as inevitable, but not desirable.

It all has the makings of serious agita in Gamble Land. And that’s as it should be. Most bets, especially the big ones, are losers. The guys who make gazillions from games of chance know that better than anyone.

http://www.bostonglobe.com/metro/2013/08/07/agita-gamble-land/ZUYH1g1eMgj6gyfGsMqelL/story.html

 

Pulling Back the Curtain on MA Casino and Slots Parlor Applicants

Pulling Back the Curtain on MA Casino and Slots Parlor Applicants

 

Posted by Bob Crawford on Friday, May 10, 2013

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.

 

http://www.goodwingaming.com/pulling-back-the-curtain-on-ma-casino-and-slots-parlor-applicants

 

 

The Massachusetts Gambling Commission Scam

On April 18, the Massachusetts Gam(bl)ing Commission voted to allow the host communities schedule votes prior to the results of the financial/background analyses being finalized and made public.

... THE RESULT: What this means is that East Boston and Revere will be asked to vote on the proposed Suffolk Downs Casino BEFORE their financial background check has been completed.

They did this using the "emergency regulation" authority that state agencies have, claiming that it is in the public interest to move ahead as quickly as possible--regardless of whether or not we have all of the information we need about the investors-- with the vote. They cited pressure from the cities and towns and developers as the reason to move the process ahead and made light of the fairly significant concerns raised by groups like No Eastie Casino when asked what the hurry was.

This happened about 3 weeks after one of Suffolk Downs' largest investors, Vornado Trust pulled out because they didn't want to submit to background checks.

According to the Globe, "The gambling commission approved a transfer of Vornado’s shares Thursday to a blind trust over which the company will have no control. That is an interim step that will allow the track’s casino application to move forward while Vornado works to sells its interest “as soon as possible,” said Catherine Blue, the gambling commission’s general counsel."

THE RESULT. This means that the MGC is conducting a background check on on a blind trust, and East Boston Residents aren't even going to see the results of this analysis before we vote on Suffolk Downs' proposal.

The MGC is an agency set up to "strive to ensure that its decision-making and regulatory systems engender the confidence of the public and participants, and that they provide the greatest possible economic development benefits and revenues to the people of the Commonwealth"

What is Suffolk Downs Hiding?

Vornado pulls out of Suffolk Downs casino bid

3/28/2013
By Mark Arsenault, Globe Staff

One of Suffolk Downs’s largest stakeholders, Vornado Realty Trust, is divesting its 19.9 percent share in the track because its executives are not willing to submit to the intensive background checks required of all casino license applicants.

The state gambling commission today approved a transfer of Vornado’s shares to a blind trust over which the company will have no control. This is an interim step that will allow the track’s casino application to move forward while Vornado sells its interests.

Top executives and key personnel associated with all of the casino applicants in Massachusetts must disclose personal, financial, and tax information to commission investigators as part of the background check. The commission identified 14 people at Vornado who needed to provide the information. But 11 Vornado representatives refused to file required disclosure forms, according to a memo from Catherine Blue, the gambling commission’s general counsel.

Their refusal to comply would have jeopardized the Suffolk Downs casino application and led to intensive behind-the-scene negotiations with the commission to develop a compromise to allow Suffolk Downs to stay in the hunt for a license. The commission agreed to allow Vornado to transfer its shares to a trustee, who will submit to the background check. New owners of Vornado’s interest in the track will also have to submit to the check, according to the commission.

Chip Tuttle, Suffolk Downs chief operating officer, said in a statement that “Vornado has decided to focus on its core real estate development practice and has decided to divest its 19 percent interest in Suffolk Downs that it acquired in 2005. The partnership has worked with the Gaming Commission to update our list of qualifiers and work towards the opportunity to earn a gaming license in Massachusetts…This change to our list of qualifiers will have no impact on our application for a gaming license.”


http://www.boston.com/metrodesk/2013/03/28/vornado-pulls-out-suffolk-downs-casino-bid/9AIJd4NGgXAE8OAigdhO4O/story.html