A Win for Wynn Resorts: Encore-Adjacent Development Ruled Not Part of Gaming Establishment

Written By Veronica Sparks on March 31, 2022
Encore Wins Separate Development Across The Street

Encore Boston Harbor got great news from the Massachusetts Gaming Commission (MGC) earlier this month. The land they’ve planned on developing across the street from the casino has been deemed separate from the gaming establishment.

The new multi-use development will not be under the oversight or jurisdiction of the MGC.

What the MGC’s decision means for the new development

The legalization of gambling in the state of Massachusetts was not an easy sell. It was a controversial topic for many. When the state finally legalized the opening of three casinos for gambling, the Expanded Gaming Act came with strict regulations.

With the land near Encore being ruled outside of MGC jurisdiction, it will not be under such strict regulations as the casino resort. Additional safety and security regulations, for example, would not burden the development.

The high level of state involvement in Massachusetts gambling, however, comes with some benefits. Scott Harshbarger holds long opposition to legal gambling. He states that regulations and scrutiny prevent “negative fallout” that has certainly happened in other states.

“It’s a big win for Wynn,” said Harshbarger. “It establishes a footprint for the next expansion phase.”

Plans for the adjacent land

The land that sits across Broadway from Encore Boston Harbor will contain a variety of nongaming amenities. A concert venue, two hotels, and a parking garage are planned for the land, which will eventually serve as an entertainment center.

Wynn Resorts doesn’t own the land directly. Rather, East Broadway LLC (a subsidiary of Wynn Resorts) claims ownership.

Encore officials quickly argued that the development on the nearby land will be separate and distinct from the resort casino. They also said it would not enhance the gaming facility in any way.

However, some are skeptical of that claim. New Wynn Resorts CEO Craig Billings has stated the development “would help drive growth at Encore Boston, in part because the new 2,310-space parking garage would help alleviate parking constraints at the casino.”

Are Boston theaters at risk?

One notable question some have about the MGCs decision has to do with its inclusion of a possible concert venue.

Gaming statutes in Massachusetts restrict MA casinos from building an entertainment venue with a capacity between 1,000 and 3,500. This regulation protects Massachusetts theaters from being overshadowed by casino venues.

The new development next to Encore is separate from the casino, so the restrictions do not apply. The venue planned in the entertainment center would hold roughly 1,800 people.

Wynn Resorts gets a win after several years of controversy

Encore Boston Harbor is Massachusetts’ newest casino, opening only in 2019. It is also the largest and most profitable among the three casinos in Massachusetts, largely because of location.

When Wynn Resorts was first awarded the gaming license for Encore back in 2014, there were some allegations of bias and conflicts of interest. It was known that a Bostonarea casino license would be hugely successful, so it was widely coveted.

Four years later, in 2018, a slew of sexual misconduct allegations was outlined by the media against CEO and Wynn Resorts founder, Steve Wynn.

The heat caused the MGC’s chairman, Stephen P. Crosby, to resign his post. Accusations arose that he held bias in his opinion on whether the sexual misconduct allegations were true.

“With a profound sense of sadness, regret—and yes, frustration,” the MGC had tweeted at the time on behalf of Crosby, “I am resigning as Chair of the Massachusetts Gaming Commission, in order to give you the best possible opportunity to do your work without distraction.”

Since suspicions point to former executives of Wynn Resorts covering up the allegations prior to their release, the MGC would eventually fine the company $35 million. They were, however, permitted to keep their gaming license for Encore.

A change of pace

Steve Wynn’s protégé, Matt Maddox, took over as CEO of Wynn Resorts after investigations were complete. He allegedly faces a $500,000 fine for his part in failing to adequately investigate the allegations internally.

Encore Boston Harbor was a $2.6 billion casino project. The following year, however, the COVID-19 pandemic hit, causing mandatory shutdowns across the casino industry.

Despite all the setbacks, the casino and its parent company weathered the storms. They made some wise financial moves to bounce back in a challenging economy.

One particular financial decision made was to sell the land that Encore sits on to Real Estate Investment Trust, Realty Income. Wynn Resorts will lease the land back from Realty Income as a way casinos free up capital for new developments.

Photo by Shutterstock.com
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