Update: Massachusetts Gaming Commission Holds Weekly Meeting

On August 7, the Massachusetts Gaming Commission convened another public meeting, which was attended by a member of Goodwin Procter’s Gaming, Gambling & Sweepstakes Practice. The meeting’s highlights included:

Administration

Executive Director Search

• Commissioner Stebbins noted that JuriStaff developed a list of 45 to 50 prospective candidates and has begun to make calls to that list.  So far, four people have expressed interest in applying for the position and several others want to learn more.
• The commissioners discussed the process by which candidates would be screened and debated at length whether the screening process should be undertaken by only one commissioner or a subcommittee.  After speaking with a JuriStaff representative, Jim LaRosa, the commissioners voted to delegate the interviewing process to one commissioner; they chose Commissioner Stebbins.

Additional Hires

• Searches are underway for an ombudsman, racing division director and staff attorney.
• The Commission is ready to start the search for a general counsel, and is also looking to hire a chief information officer with strong policy and technological experience.

Discussion of MGC Internal Policies

• These policies are not yet ready and will be discussed next week.

Project Management Consultant

• Currently, the various consultants are working together to share information.  They are likely going to schedule a meeting around August 22 for a facilitated meeting.

Racing Division

Update

• Commissioner Cameron set forth a job description of the director of racing for comment and review, stressing that the candidate will have to have strong management skills as well as subject matter knowledge and interpersonal skills.  The other commissioners approved.

Project Work Plan

Draft Regulations - Consultant Status Report

• The Gaming Commission’s team of consultants drafted a series of regulations (approximately 80 pages long), which are going to be released and published by the Secretary of State for public comment on August 31, and will be put on the Commission’s website beginning August 17.  There will be a public hearing on the comments in the second week of September.  After the comments are received, the draft will be finalized and published by the end of the second week of October.  As soon as the regulations are published, the Commission can accept the RFA-1 applications.
• The regulations consist of 17 chapters regarding the operation of the Commission in terms of substance of policy of the Phase 1 process and overall administration of the Commission itself.
• The consultants did not discuss all of the regulations in great detail, but highlighted and discussed with the commissioners some of the main themes, including:
  • The manner in which the Commission will receive information and keep it confidential and ways in which the Commission will have the power to obtain information
  • Community and political contributions
  • Application fees and additional fees for investigations into applicants
  • Community disbursements of fees, including fees from tribal entities
  • Applicants’ duties to keep the Commission updated of any changes in their circumstances
  • Withdrawal of applications
  • The Commission’s far-reaching discretion on making determinations of whether an applicant is financially suitable and suitable in character
    • Commissioner McHugh noted that, while the statute creating the Commission gives it wide discretion, the regulations are designed to illuminate the qualities that it is going to take into account in exercising that discretion, and the Commission must have a clear, articulable basis for its decision-making
• Application phase sequencing
  • The regulations give the Commission flexibility on a region-by-region basis
  • Chairman Crosby mentioned that he thought there might be something the Commission could do through the regulations to highlight how serious the Commission is about its diversity objectives, such as requiring applicants to signify the gender, race and ethnicity of senior management and board of directors on the application.  Some of the Commissioners were concerned with the possible legal ramifications of such a provision.
  • Chairman Crosby expressed concern about the detailed disclosure requirements proposed in the regulations, such as asking individuals if they were married, what cars they owned, or if they have tattoos or scars.  He thought this information was intrusive and would not be successful in garnering the real information the Commission is after.  Commissioner Cameron disagreed, noting that one’s former spouse could be a powerful source of information, and characteristics such as scars or tattoos could be identifiers that could lead to some other information.  The consultants noted that, in their experience, this sort of information could be helpful.
  • The Commission voted to submit the draft regulations to the Secretary of State for public comment.

Technical and Other Assistance to Communities - Ombudsman Search Update

• The Commission has received a number of promising resumes and hopes to begin interviewing candidates next week.

Finance / Budget Update

• The Commission is debating hiring a financial advisor to help in various capacities including understanding the financial ramifications of proposed regulations and helping in negotiations with the ultimate applicants.  The drawback would be the high cost of such an advisor, and the commissioners agreed to revisit this topic at a later date.
• Commissioner Zuniga set forth a budget, which amounts to about $7.4 million for the fiscal year 2012.
• Chairman Crosby emphasized that this is not taxpayer dollars but a loan from the “Rainy Day Fund.”
• The Commissioners voted unanimously to approve.

Public Education and Information

Community Outreach

• Director Driscoll noted that the Commission will be engaging in a number of speaking engagements over the next months, including in Brockton, Winthrop and Dedham, with other locations pending. She is also working on social media placement for open job positions and formalizing the process for branding, logo and a website.
• Commissioner Stebbins noted that there were 88 registrants for the Western Massachusetts Forum on August 8, with community mitigation as the biggest topic on the agenda.

Applications

• Chairman Crosby announced that the Commission is ready, as of August 8, to start taking application fees for the first two-page application.  The fee will be $400,000 and the money will be non-refundable (debatably) barring the Commission’s decision not to issue a request for applicants for a casino in a particular region, and there being any unused money to refund.  Applicants need to apply for a category one or two license (full casino or slots only), but they do not need to specify the region in which they are interested.  If they do not specify a region, the Commission’s discussion suggested that they would not be entitled to any refund.

Research Agenda

• The Commission is soon going to issue an RFI soliciting research proposals.

The next meeting will be on August 14 at 1:00 p.m., at the Division of Insurance, 1^st Floor, Meeting Room E, 1000 Washington Street, Boston.

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Those interested in learning more about Goodwin Procter’s gaming and gambling expertise and practice, or the items outlined above, should contact David Apfel or Bob Crawford, co-chairs of Goodwin Procter’s Gaming, Gambling & Sweepstakes Practice.