Afinal showdown over the casino issue is brewing on Beacon Hill, with State House hearings now tentatively slated for next month.
But as the Bay State moves toward casino legalization after years of debate, one player that long dominated the discussion will be lucky to get much serious attention this time around – the Mashpee Wampanoag tribe.
First there was a Supreme Court decision in late February that called into question the legal basis for the tribe’s high-stakes bid to create an autonomous reservation on which to build a Foxwoods-style resort casino.
Now comes what looks like a serious dispute between the Mashpee Wampanoag tribe and the high-powered gambling investors who have bankrolled the tribe’s ambitious plans to build a $1 billion gambling resort in rural Middleborough.
The investors, a group that includes international gambling magnate Sol Kerzner, have stopped making payments to the tribe. In turn, a new slate of Mashpee Wampanoag leaders is blasting the casino development agreement the tribe’s now disgraced and jailed former chairman inked with investors two years ago.
The fallout comes at a crucial time for casino boosters in the state, with momentum building for the legalization of expanded gambling as early as this fall.
Inevitability Threat Evaporates
Yet overnight a key factor often cited by casino supporters, including Gov. Deval Patrick, in making their case, has seemingly vanished: the inevitability of casino gambling coming to the state.
The argument was the tribe, which just won federal recognition in 2006, would be able to leverage the Indian Gaming Regulatory Act and go ahead and open a casino, whether the state liked it or not. Pointing to this perceived threat, the governor and State Treasurer Tim Cahill, among others, argued Massachusetts should get ahead of this looming competition and roll out commercial casinos.
That threat does not look terribly credible anymore.
Still, given the impact of the Great Recession and the state’s dire need for cash, casino supporters may simply no longer need to play the tribal card to get what they want.
“Hopefully, we will get this thing done soon,” said State Rep. Brian Wallace, D-South Boston, a long-time backer of casino gambling. “The longer we wait the more in debt we become.”
In a crucial step, State House staffers are now hammering out a date in September for a hearing on the gambling issue, Wallace indicated.
The issue will get vetted before the Joint Committee on Economic Development and Emerging Technologies.
Unlike the past several years, casino supporters are all but ensured a fair hearing.
The resignation of House Speaker Sal DiMasi, D-North End, under the cloud of a government corruption probe, cleared the way for gambling legislation to move forward. An ardent foe of expanded gambling, DiMasi loved to rail against the danger of creating a “casino culture.”
The big debate now is whether the Bay State embraces racino-style gambling, with slots at the racetracks, or whether it tries to emulate Connecticut with its resort casinos.
DiMasi’s successor, House Speaker Robert DeLeo, wants the racetrack slots, while Patrick is more of a casino man.
No Dice For Tribe
While I am sure it will get lip service, don’t expect a rush by lawmakers to include a Mashpee Wampanoag casino in their plans.
Back in the summer of 2007, when the town of Middleborough turned out to approve the tribe’s proposal for $1 billion gambling resort, the Mashpee Wampanoags and their high-powered investment backers appeared to be calling all the shots.
The tribe had just won recognition from the federal government and had hammered out a deal for more than 500 acres of land in the town for a giant casino.
But it has been downhill since.
In the first serious blow, the tribe’s former chairman, Glenn Marshall, was indicted and then found guilty on a series of federal charges, from fraud and embezzlement to making illegal campaign contributions.
Then, with the tribe in turmoil and a new set of leaders taking over, the U.S. Supreme Court, in a case involving Rhode Island’s Narragansett Tribe, sent shockwaves through Indian Country. The justices ruled that tribes recognized after 1934 did not have the right to create new, sovereign reservation land, a basic step in opening a casino.
The blow could not have come at a worse time, with the tribe in the midst of a review by the Bureau of Indian Affairs over its proposal to transform hundreds of acres in Middleboro into a reservation and then build a casino on it.
But the cruelest cut of all came in May, when the tribe’s financial backers stopped paying the bills.
Given it’s an expensive process trying to convince the federal government to set up a sovereign tribal territory, this is no laughing matter.
But the Mashpee Wampanaog leadership fired off its own salvo in June, with the tribal council voting to put the 2007 casino development agreement struck with the investors on hold.
Tribal leaders, many of whom were elected after Marshall became ensnared in a federal probe, have taken a skeptical view of the casino development agreement the now-disgraced former chairman signed with the investor group. Marshall was recently sentenced to 41 months in federal prison for embezzlement, Social Security fraud, tax evasion and making illegal campaign contributions.
Under the agreement, the investors could make as much as $40 million a year, while the tribe would get about $15 million, The Cape Cod Times has reported. That’s based on a casino that would generate more $700 million a year in gross revenue.
Both sides aren’t talking about the dispute, other than to say the current contract is still in force.
“It’s not a very good deal for the tribe,” Clyde Barrow, a professor and gaming industry expert at the University of Massachusetts Dartmouth, recently told me.
Threat? What Threat?
Given such disarray, casino boosters at the State House are not likely to argue anymore about the need to counter the looming threat of tribal casino.
It’s clearly an argument that will no longer work – and may or may not be a significant loss. I guess we will see when the debate heats up on Beacon Hill whether the economic argument – the idea that casino and slot machine gambling will generate hundreds of millions in new tax revenue – is enough to carry the day.
But already casino backers like Wallace are putting a new spin on the demise of the tribal casino threat.
Wallace contends this latest development is a good thing for those who want to legalize casinos.
No longer will it be a case where the state is being forced into something. Nor was Middleboro, a town in the middle of nowhere without sufficient highway access, a great casino site, either.
“It actually helps us,” Wallace said. “We are not forced into anything now. We can look at the different proposals and really decide what’s best.”
Sounds like some after-the-fact arguing, but we’ll see.
Still, if lawmakers manage to pass casino gambling this fall, the mounting challenges facing the Mashpee Wampanoag tribe and their backers are probably good news for other, would-be gambling developers.
It’s one less competitor for New York casino developer Richard Fields, who has big plans for Suffolk Downs in East Boston.
And it may open up new possibilities for a casino in New Bedford and slots at the Plainridge and Raynham-Taunton racetracks, which a nearby Mashpee Wampanoag casino might have all but ruled out.
So when it comes to casino gambling here in Massachusetts, it’s off to the races again.
But just maybe with one less serious competitor in the race.
