1/10/13: MGC Weekly Meeting Summary

On January 10, 2013, members of Goodwin Procter's Gaming, Gambling & Sweepstakes Practice attended another public meeting of the Massachusetts Gaming Commission. This week's highlights included:

PUBLIC INFORMATION AND INFORMATION

Report from Ombudsman

Information requests from developers, communities or others

• Ombudsman Ziemba reported that he has fielded a number of questions regarding the timing of the RFA-1 licensing reviews and the timetable for referendum scheduling. He recommended that the Commission discuss this timing further next week after it receives the RFA-1 applications and has more information.
• Ombudsman Ziemba also reported that he continues to work with regional planning agencies to fine-tune the process for helping host and surrounding communities evaluate the impacts of potential gaming facilities.

State/local permitting process - Dept. of Transportation and Executive Office of Energy and Environmental Affairs

• Ombudsman Ziemba discussed the Commission's partnership with the Massachusetts Department of Transportation (MassDOT) and the Executive Office of Energy and Environmental Affairs (EOEEA), to develop a process to expedite permitting after the granting of conditional licenses.
• Because host community agreements may be based on infrastructure ideas that are not fully vetted yet, Ombudsman Ziemba also explained that they hope to provide a method to properly inform communities prior to their execution of host community agreements of the agencies that will be involved in the permitting process and the infrastructure improvement processes. As clarified by Chairman Crosby, this is a service that will be offered to the communities, but the communities have no obligation to use these services.
• Ms. Vallely-Bartlett of the Massachusetts Environmental Protection Act (MEPA) Office briefly described the MEPA process as an informal administrative process in which affected state agencies will comment through the MEPA process before the applicant receives its permit. In other words, MEPA is designed to look at the impacts of various alternatives. Mr. Mohler of MassDOT also explained MassDOT’s involvement in this process. They each discussed the roles they would play in the permitting process and various timing requirements.
• As a result of this discussion, the Commission unanimously adopted Ombudsman Ziemba’s recommendation requiring the filing of an Environmental Notification Form (ENF) and the issuance of a certificate from the Secretary of EOEEA after the conclusion of the comment period, but not otherwise requiring anything further in the MEPA process as part of the Phase 2 application. (This was in response to Policy Question 12: “To what degree will an applicant be required to have progressed in federal, state and local permitting and other regulatory process before submitting its RFA-2 application?”).

Community Disbursement

• Chairman Crosby described the community disbursement (of not less than $50,000 of the nonrefundable $400,000 application fee) which is available to communities to plan for community mitigation. Chairman Crosby stated that they will likely have the grant agreement ready by the next week with a memorandum explaining how communities can take advantage of the grants.

ADMINISTRATION 

Master schedule

• Chairman Crosby explained that the Commission is working on moving as fast as they possibly can and have decided to focus on the slot parlor applications assuming they get all of the information from the various slot parlor applicants. In parallel, the Commission will need to make sure that the drafting of the regulations is done in time to start the RFA-2 process when the background checks are complete.

Employee Manual – Chapter 6 – VOTE

• The Commission unanimously adopted the proposed Chapter 6 for the Employee Manual.

Public Records Request Policy discussion

• Commissioner Zuniga discussed a proposed update to Section 2 of the Employee Manual drafted by Attorney Grossman, which would enhance the public records request policy by putting in place a more detailed procedure. The Commission unanimously adopted the update as presented.

OTHER BUSINESS 

• The Commission unanimously agreed to enter into a contract with Future Technologies Group for software to enhance back-office technologies, such as voice and data services, for $25,000.

Investigations and Enforcement Bureau (IEB) Report

Scope of licensing and investigations status report

• Commissioner Cameron stated that all of the interested parties who have requested scope of licensing meetings have had those meetings and the Commission has sent out their determination letters. There are, however, several planned “clarification meetings” to discuss questions about the letters.
• Three applications have been submitted, two of which have been deemed substantially sufficient to begin background investigations.

IEB Director search update

• Commissioner Cameron recommended Karen Wells for the position of IEB Director. Ms. Wells has, as described by Commissioner Cameron, extensive experience in both law enforcement and regulatory oversight. The commissioners discussed several questions with Ms. Wells and unanimously appointed her as IEB Director.

RACING DIVISION REPORT

Transition update

• Dr. Durenberger provided the update on the transition from the former State Racing Commission to the Racing Division of the Commission and stated that it would likely be the last update, as the physical move involving the four different locations was completed on January 9. The majority of the electronic files have been transferred and Dr. Durenberger expects the remaining items to be resolved by January 10.

Pari-mutuel and simulcast statute review and discussion

• The commissioners discussed the pari-mutuel and simulcast statute as part of the Racing Division Update. Chapter 23K, Section 7(b) of the Massachusetts General Laws gave the Commission the ability to grant simulcast licenses to a gaming establishment or an entity previously licensed pursuant to Chapter 128A or Chapter 128C.
• As the commissioners discussed, this essentially creates two classes of licensees: those licensed by the Commission under Chapter 23K, Section 7(b) and those already licensed under Chapter 128A or Chapter 128C. However, the Gaming Act itself is silent on the regulatory framework for the new category of licensees. It was suggested that these Section 7 licensees should be subject generally to the same regulatory regime as the existing licensees.
• In order to create such a regime, the commissioners considered whether, in addition to new regulations, amendments to the Gaming Act would be required. As explained, the Commission likely has the tools necessary to license and regulate this industry without requiring further legislative action. Furthermore, the legislature would likely not be interested in updating or amending the Gaming Act, except in rare circumstances. In addition, the commissioners also discussed the importance of the portion of the wagering received on races that will be allocated to the Race Horse Development Fund to support assistance and breeding products.
• Under Section 104 of the Gaming Act, the Commission is charged with analyzing the pari-mutuel and simulcasting laws in effect and reviewing the efficacy of those laws, and must report its findings and recommendations to the legislature. The Commission will continue its discussion of this issue in upcoming meetings.

REGULATION PROMULGATION PROCESS 

• Mr. Grossman has submitted for the Commission’s consideration a memorandum, which has been reviewed by the gaming consultants, detailing a plan for the adoption of comprehensive gaming regulations. The gaming consultants are drafting an outline of what these regulations may ultimately look like and this outline should be complete by the end of the week. Once the commissioners discuss the outline, then the substantive drafting of the regulations would begin, with the legal department serving as the point of contact for the gaming consultants. These regulations would weave in the “intricacies” of Chapter 23K of the Massachusetts General Laws. There would then be a review and comment period for those regulations.

The next meeting is scheduled for Thursday January 17 at 1000 Washington Street, 1st Floor, Meeting Room 1-G. The January 17 meeting agenda will be made available on the Commission's website.

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