City of Boston and Mohegan Sun Agree to Casino Deal

Posted on: July 10, 2014, 05:30h. 

Last updated on: June 13, 2022, 10:21h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Ever since the residents of East Boston first rejected a casino planned for their community, the city of Boston has worked tirelessly to oppose nearby proposals in Revere and Everett. When those efforts seemingly failed, the city also vowed to strike the best deals possible for themselves as a “surrounding community” for either casino, a position that gave Boston quite a bit of leverage considering that only one of the two resorts would be approved by state regulators.

If making nice with Boston will help their chances, then it seems like Mohegan Sun now has the upper hand. The casino developer has reached an agreement in principle with the city over how they would compensate Boston for a casino at Suffolk Downs, potentially smoothing relations between the two sides.

Details to be Determined

The exact monetary compensation that Mohegan would be paying Boston is still being determined, but the broad outline of the agreement is in place. According to reports, Boston would drop all claims that East Boston be considered a “host community” for the project, a designation that would give the neighborhood veto power over the proposal. Instead, the city of Boston will accept their “surrounding community” designation.

This key point will end the threat of a lawsuit from Boston. The city had considered suing the Massachusetts Gaming Commission in an attempt to win back veto power for East Boston, as well as the same host community status for Charlestown over the Wynn-backed casino proposal in Everett. But ultimately, the city felt that plan was risky, and it was worth giving up on that front to secure a potentially lucrative compensation package from Mohegan Sun.

That decision wasn’t exactly what anti-casino campaigners wanted to hear. But at the same time, they seemed to agree that Mayor Marty Walsh would decide to make that deal.

“We appreciate he has been fighting for the city,” said lawyer Matt Cameron of anti-casino group No Eastie Casino. “He’s in a tough position.”

A Public Victory for Mohegan Sun

For Mohegan Sun, the deal might be more about getting a leg up over Wynn than anything else. The two sides have been locked in a tight battle over the only license available in the Greater Boston area, but the scales may have tipped slightly in Mohegan’s direction in recent weeks. While the Wynn plan in Everett had a much smoother passage through the local community, polls have shown that Boston-area residents would prefer a casino in Revere.

The deal with Boston could be another critical public relations win for the Suffolk Downs casino.

“If they reached a deal with Mohegan but not with Everett…then obviously that would tilt it in favor of Mohegan to a significant degree,” said gaming expert Clyde Barrow.

While there are no specifics yet about the terms of the deal, the Boston Herald has reported that the terms are similar to the $52 million deal that former Mayor Thomas Menino had reached last year with Suffolk Downs when the casino was planned to be built on the East Boston side of the racetrack, with the notable difference that the city will not collect real estate taxes now that the casino is in Revere.

Time isn’t quite up for Wynn to reach a similar agreement. The casino firm has until end of day today to prepare a final offer, after which the issue will go to arbitration.