MGM Pursues Postponement of License Grant to Save $200 Million
MGM Resorts International has made a formal request to the Massachusetts Gaming Commission to postpone finalizing its casino license approval. This unexpected move comes from a company eager to kick off its $800 million casino project in Springfield's South End, but concerns over a recent legal challenge for a state-wide referendum on gambling in Massachusetts. This could potentially cause a $200 million loss for the company.
Voters in Springfield approved the MGM Springfield project, but a petition attempting to overturn the 2011 casino law has sparked uncertainty about casino gambling in the state. A recent poll revealed declining support for casinos in Massachusetts.
$85 Million License Fee
MGM Springfield's president, Michael Mathis, requested a delay in awarding the gaming license to the proposed property, bound by a potential $200 million financial impact from state fees and obligations–a $85 million license fee included. He asked for the commission to make a "determination" of MGM winning the license, but hold off on the formal award until the future of the casino bill is clearer.
"Our company, or any publicly traded company, wouldn't be in a position to write $200 million worth of checks while this cloud of doubt remains," Mathis said.
The proposed repeal is being reviewed by the state Supreme Judicial Court, set to determine in early July whether a ballot will occur. If approved, Massachusetts voters will again decide on casino gambling's fate in November.
Not a Setback
Springfield's development head, Kevin Kennedy, sees this as part of the political process, pointing out existing uncertainty regarding the ballot question and the Court's decision.
"We don't see it as a setback," he said, adding that the City will maintain talks with MGM regarding their city-related commitments. Kennedy trusts the public's support to uphold the casino bill.
In Boston, where Wynn Resorts and Mohegan Sun battle for the Eastern Massachusetts license, the City called on gaming official, Stephen Crosby, to step down from the decision-making process. The City accused him of making prejudicial statements on the matter, which angers officials by criticizing them for defending the public's right to host the casino.
"The Gaming Act demands Commissioners to render decisions in the public's favor, avoiding any impairment and the appearance of impropriety," said a lawyer from the City. "The ongoing federal lawsuit, Commission statements, current press articles, and the Commission's actions raise concerns. Hence, we believe, in the interest of transparency, the best course would be for Chairman Crosby to remove himself from all licensing issues in the Greater Boston area."
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