The Battle of Boston Considered


Could Wynn Boston Harbor lose its license before it even opens? It could happen; the Massachusetts Supreme Judicial Court ruled recently that a lawsuit challenging Wynn’s license could proceed.* The court sent the case back to a lower court to determine if the Massachusetts Gaming Commission had violated the state’s open meeting law.  The original suit was brought by the City of Revere, some of its citizens, a labor union and Mohegan Sun.  However, the court said only Mohegan Sun had standing in the case.  The others cannot be part of any future litigation, but will certainly remain on the sidelines cheering on Mohegan Sun.

The licensing process in Massachusetts was nothing if not thorough.  There were voter referendums and local government approvals before the gaming commission’s final hearings.  The commission weighed all of the public comments, official presentations and testimony by experts. Then, in 2014, using its wisdom and best judgment, the Boston area license was awarded to Steve Wynn.  Wynn probably thought he had won the battle for Boston at that point, but a series of lawsuits cast shadows over his victory.  If Wynn opens on schedule in 2019, it will have been eight years since the Expanded Gaming Act passed in 2011 and five years since the license was awarded.  A lawsuit over the commission’s process could extend that timeline even further.  By the time the property finally opens, Wynn will have spent millions on the process and defending lawsuits, not to mention the estimated $2.4 billion on the construction of the property.

That is a great deal of time and money to have snatched away at the last minute if the lower court finds the gaming commission violated the open meeting law.  Such a ruling might render all decisions made under those circumstances were null and void.  In that case, the commission could meet and in due course award the license to Wynn for a second time.  But given the history of the Massachusetts Gaming Commission and the time involved in the litigation process, it could add years and millions of dollars to the cost of the project.  For Massachusetts to start over with a new licensee seems highly unlikely to me, possible but improbable.  It makes me wonder what the end game goal is for each of the litigants.  The city of Revere, its citizens and the union probably had hoped for a cash settlement from Wynn.

Mohegan Sun had a very different agenda in the beginning.  It hoped to stop Wynn’s project and get the license for its project.   However, three years later, with construction on Wynn going full steam, it is unlikely that Mohegan Sun believes it can reverse the decision and receive a license in Wynn’s stead.  But who am I to say and Mohegan Sun has yet to comment on its suit intent.  If Mohegan Sun does continue to pursue its case, it will be too early to predict the eventual outcome, but I think we might speculate.

The lower court will look long and hard at the gaming commission’s process; the commission and Wynn will certainly put an all out effort into proving the process was open and fair.  But even if the commission’s decision is overturned, it is probable it would re-award the license to Wynn.  There would be no question of Wynn’s commitment, financing or the scope and stature of his proposal.  Wynn has proven his case and invested literally billions of dollars in a remarkable project.  Mohegan Sun would state a beginning argument, declaring it had a good plan, could probably get the financing and with luck would open in another couple of years.  All of that in my mind would be enough to justify granting Wynn the license again.

Revisiting the license would mean at least another year before Wynn Boston Harbor could open.  However, Wynn could then claim a final victory in the Battle of Boston, maybe.  Nine years is a long time and the $2.4 billion – probably $3 billion by then – is a lot of money.   Steve and his crew have to be wondering if they might have put that time and money to better use.  The company has plenty of both, but Steve Wynn does not have an unlimited amount of time left.  So who did really win the Battle of Boston?  Not the state of Massachusetts or the gaming commission.  In the end the Boston region and Wynn Resorts will reap the benefits, but it will be a long time before they recoup the time and money lost in the fight.

*Massachusetts’ highest court ruled Friday that a lawsuit challenging Wynn Resorts’ gambling license can move forward. The Supreme Judicial Court decision sends back to a lower court a lawsuit alleging the state Gaming Commission violated the open meetings law as it deliberated the lucrative Boston-area casino license. The Supreme Judicial Court, in its ruling, suggested that such an open meetings violation could lead to the nullification of certain actions taken at the meetings in question or result in civil penalties or other legal remedies.  Associated Press, 3-10-17

 

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