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Boston Magazine, The MGC, And A Wynn Resorts Bias: An In-Depth Look

A Massachusetts Gaming Commission (MGC) spokesperson came out swinging this week, telling Boston Magazine to get its facts straight.

An Oct. 17 Michael Damiano article in Boston Magazine alleges favoritism and bias by the MGC in awarding Wynn Resorts a casino license for its $1.6 billion Encore Boston Harbor project. However, reacting to the allegations, MGC’s Director of Communications Elaine Driscoll claims the story ignores facts and context to create a scathing narrative that isn’t true.

In fact, Driscoll released a statement on Oct. 22 calling the article flawed and misleading:

“(The article) blatantly omits essential facts and relevant context resulting in a flawed and misleading narrative of the Region A casino licensing process. The story is remarkable for its exclusions, misrepresentations, and innuendo.

“First and foremost, the story centers on a demonstrably false premise alleging the Commission’s favoritism and bias for the Wynn casino proposal. The article regurgitates baseless claims from previous lawsuits that were wholly struck down and rejected by a Superior Court judge.”

Boston Magazine allegations

The article details several aspects of the MGC’s handling of the casino license application process, including:

  • Recently resigning MGC chairman Steve Crosby‘s mandate to build a multibillion-dollar casino industry free of criminality or corruption.
  • The commission’s vetting process has previously kept casino companies with purported ties to organized crime out of Massachusetts gaming.
  • One owner of the land where Encore Boston Harbor is under construction has ties to a reputed Mafia associate. Plus, another has ties to Crosby himself.
  • The Wall Street Journal published an article containing allegations of a decades-long pattern of sexual misconduct against Wynn Resorts founder and then-CEO Steve Wynn. Allegations that call his and the company’s suitability as a Massachusetts casino license holder into question.
  • A competing Suffolk Downs application was the initial favorite for the Boston-area’s only casino license. However, competing developers and Encore Boston Harbor critics say the MGC was taken in by Wynn and its extravagant proposal.
  • Crosby invented a metric he dubbed the “wow factor” in helping the MGC decide which project would be granted the license.
  • Crosby intervened on Wynn’s behalf to remove Spectrum Gaming Group from an investigation into Wynn’s suitability as a casino license holder. Steve Wynn had requested Spectrum’s removal because he felt the company had a conflict of interest. The article alleges Wynn wanted Spectrum out to hide its alleged connections to organized crime in Macau.
  • Crosby admitted he was friends and former business partners with one of the Everett landowners and recused himself from any deliberations regarding the land deal.

Wynn gets a $40 million gift

  • The MGC concluded Wynn had no prior knowledge one of the landowners had ties to organized crime. It then devised a solution that allowed Wynn to purchase the Everett land at a cost of $35 million, instead of the originally agreed upon $75 million. The commission allegedly struck the deal to prevent landowners with suitability issues from getting rich. Later that month, the MGC deemed Wynn suitable to do business in Massachusetts. “The net result: Wynn got a clean bill of health and a $40 million gift.”
  • The MGC voted three to one in favor of awarding Wynn the license over the Suffolk Downs proposal.
  • The lawsuits filed by the cities of Revere, Somerville, and Boston, plus an electrical workers’ union, and Suffolk Downs proposal partner Mohegan Sun. They allege the MGC and Crosby showed extreme bias in Wynn’s favor throughout the licensing process.
  • In the wake of the sexual misconduct allegations, Steve Wynn resigned as CEO of Wynn Resorts. The MGC launched its own investigation. Plus, Wynn changed the name of the project from Wynn Boston Harbor.
  • Crosby publicly stated Wynn Resorts’ culture is exemplary. He essentially said Steve Wynn represents one bad apple in an otherwise good bunch. This led to calls for Crosby to recuse himself from the handling of the MGC’s investigation. Plus, an accusation from Wynn’s lawyer calling his words defamatory. Crosby resigned as MGC chair while still claiming he did nothing wrong.

Encore Boston Harbor moving forward

  • Wynn Resorts is optimistic the project will move forward and is sticking to plans to open in June 2019. The company has already installed a 30-foot-tall “Encore” sign and opened a card-dealer school in Charlestown to train staff.
  • Few think the MGC will revoke the license regardless of the outcome of its latest investigation. WBZ-TV political analyst Jon Keller said, “the MGC got into bed with Wynn rashly and without proper vetting, and now they’re stuck with the consequences.”

The MGC response

However, Driscoll said several major facts are missing from the article, including:

  • Crosby recused himself from the license decision.
  • A State Ethics Commission review found no evidence Crosby participated in the decision after his recusal.
  • A Superior Court judge determined that all allegations of bias or favoritism by the remaining four commissioners are false.
  • Crosby had no role in removing Spectrum Gaming from the Wynn suitability review.
  • Wynn originally proposed the land deal solution that allowed it to purchase the Everett land at a $40 million discount. The MGC simply approved that solution during a public meeting.
  • The commission did not determine Caesars Entertainment was unsuitable to operate in Massachusetts gaming because of ties to organized crime. Suffolk Downs terminated its partnership with Caesars and brought on Mohegan Sun after MGC investigators raised several issues. The issues uncovered during the MGC’s background investigation included a possible business connection to Russian organized crime. They also included the involvement of an executive in internet gambling crimes. Plus, there were concerns related to the company’s financial stability.
  • Courts have dismissed most lawsuits against the Commission alleging favoritism. The only pending challenges are from Suffolk Downs proposal partner Mohegan Sun. Plus, three registered voters represented by the same lawyers.

A partial and flawed narrative

Driscoll goes on to critique the premise that the MGC favored the Wynn proposal over Suffolk Down and Mohegan Sun:

“Unfortunately, this partial and flawed narrative ignores relevant detail and context regarding the application process for the competing Region A bids from Suffolk Down and Mohegan Sun. It is astonishing that a reporter can claim to present an analysis of the Region A process and fail to provide these basic facts (that were explained in detail to the author before the publication of this article). This narrative of alleged Commission “bias” notably excludes the numerous occasions when the Commission made policy decisions in support of the continuance of the competing Suffolk Downs bid.”

Additionally, Driscoll takes issue with the idea Crosby’s “wow factor” metric played too large a role in the MGC’s decision:

“The gross over-simplification that the Region A decision was based solely on the notion of a “WOW” factor is also wrong and ill-informed. The reporter was provided the extensive archive that demonstrates in exhaustive detail the considerable, thoughtful, and transparent evaluation process conducted for each available license. The reporter was presented with and subsequently ignored that publicly available information, too.”

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The MGC moves ahead

Driscoll said the MGC expected critics to scrutinize the MGC casino licensing decision. Adding that any questioning the MGC’s ethics will not distract the commission from the task at hand:

“The Gaming Commission fully expected and welcomes the intense scrutiny associated with our challenging and demanding work. We also fully expected that the unsuccessful applicant for the Region A license would be disappointed and that the disappointment might manifest itself in litigation and unsubstantiated bias and ethics claims. While we will continue to defend against those baseless claims, they will not distract us from the important work ahead, including the determination via appropriate due process of Wynn’s suitability to maintain its license, and our unfailing commitment to conduct our work in a manner that is fair, thoughtful, and transparent.”

Martin Derbyshire

About

Martin Derbyshire has more than ten years experience in the world of poker and gambling. He contributes to a number of publications dealing with the US regulated online gambling market. He has traveled the globe working as an editor, producer, and writer as well as interviewing major players in the gaming world.