Mr. Wynn Comes to Everett
It was long assumed that Suffolk Downs had the inside track on the single casino license Massachusetts will issue in the Boston area. But that was before billionaire Las Vegas mogul Steve Wynn’s whirlwind courtship with the blue-collar city of Everett and its mayor, Carlo DeMaria. Now the race between Wynn and Suffolk Downs is entering the home stretch…even if, as he tells us, Wynn doesn’t think there’s any competition.
That’s most apparent on jobs: Both agreements pledge to provide 4,000 permanent new ones, with the Wynn-Everett agreement stating that local residents will be given “reasonable preference.” The Suffolk Downs–Boston deal contains similar language, but it also requires that the track exclusively advertise positions four to eight weeks in advance in local papers. Residents of Boston (and neighboring communities) would then be given the first shot at applying during a special advance period. (In perhaps the most Menino-esque bit of minutiae, the deal states that Suffolk Downs must install 25 computers in spots around Eastie, plus two at the casino itself, so that Bostonians who lack Internet connections can look up job information and apply.) If Suffolk Downs fails to make “best efforts” to ensure its workforce is composed of at least 50 percent Boston residents, it would count as one of the many defaults for which the track could be fined $25,000 per day.
DeMaria and his staff said there will be extra protections worked out with Wynn to make sure Everett residents get hired. “When talking to Mr. Wynn,” DeMaria said, “he had no problem when they were doing their hiring for positions to have representatives from the mayor’s office to sit on the interviewing process. So we’re going to hold them to that. That was one of those handshake agreements me and Mr. Wynn had.”
DeMaria’s assertion of off-the-books deals with Wynn raises an entire fleet’s worth of red flags, especially among critics who suspect that the politically connected will be first in line for casino jobs. When I asked Wynn’s people about DeMaria’s “handshake agreement,” they said they had no idea what he was talking about. “If it was me, I don’t remember making that statement,” Wynn said. Maddox did not either. Neither was aware of any other handshake agreements.
Then, in October, all hell broke loose. For months, investigators from the Massachusetts Gaming Commission had been performing background checks on companies and high-level people involved in bids, asking questions, getting answers, and then going back and asking more questions. “A giant pain in the butt,” is how Wynn described the application process, adding that he thought investigators were looking for “information that’s ridiculous.”
On October 2, investigators let Suffolk Downs know that there could be a problem with its partner, Caesars. The state was concerned about a variety of issues, including the company’s massive debt and a scandal in which a gambler named Terrance Watanabe blew $189 million during a yearlong gambling spree at Caesars’ casinos in 2007. But most alarming to the investigators was a deal Caesars made just last March to partner with the Gansevoort Hotel Group, a New York–based boutique outfit, to open a hotel in Las Vegas. “Things came to light that were previously unknown to us,” one Suffolk Downs official said. According to a source familiar with the situation, the trouble stems from Gansevoort part owner Arik Kislin. In March 2012, a year before Gansevoort partnered with Caesars, the New York Post reported that Kislin, described as a “hipster real estate developer,” had past ties to a company linked to the Russian mob. Kislin has denied the allegations.
Worried that years of careful planning could be upended, the next day Suffolk Downs hired former state Attorney General Thomas Reilly to perform his own review. “He was able to ascertain the seriousness of the concerns,” the Suffolk Downs official said.
On Friday, October 18 at 5 p.m., state investigators officially delivered their findings to representatives from Suffolk Downs. While the track itself was poised to pass its background check, the investigators said Caesars would not be deemed suitable to do business in Massachusetts. Suffolk Downs immediately asked its partner to drop out of the bid. Caesars obliged.
The split left Suffolk Downs scrambling to find a new casino operator just weeks before its November 5 referendum. “It does not appear that it’s even an option to postpone the ballot question,” the Suffolk Downs source said. In fact, ballots have already been printed.
It all came as a shock: With properties in 13 states and six countries, Caesars had often passed these types of inspections. Following Caesars’ exit, the Globe suggested that the commission’s standards could “cement the state’s reputation as the toughest U.S. jurisdiction in which to qualify for a gambling license,” and Loveman complained loudly to the press that the state’s high standards will make it difficult for any gaming company to do business here. Nevertheless, within hours of being dropped from the Suffolk Downs bid, Caesars announced it was cutting Gansevoort from its Las Vegas project.
Even Wynn seemed shaken by the commission’s thoroughness. The day before the Caesars bombshell, Wynn made a rare trip to Boston, telling the board that he was “scared to death” that, should he win his bid in Everett, the state might later penalize him if it disapproved of his gambling business in China. Massachusetts investigators had already traveled to his properties in Macao, the Chinese island regarded as a sort of Wild West. “I don’t know what their attitude is with us being in business with Macao. They’ve been over there twice. We run our business in Macao the way we run it here,” he said a few weeks earlier. “Are they licensing Macao or are they licensing us?”
It’s not clear how Caesars’ exit affects the casino-license duel between Suffolk Downs and Wynn. Suffolk Downs intends to keep the building plans designed by Caesars, give or take some Roman statues. And the East Boston track—looking to retain its local edge—says it will proceed with its hotel, restaurant, and arts partnerships (albeit without the benefits of Caesars’ nationwide loyalty network). Still, uncertainty abounds. The gaming law mandates that the commission’s top priorities are the potential for economic development in the area, and the ability to maximize revenue for the state. Beyond that, the criteria are vague. The commissioners may even decide to favor the suburban Milford bid from Nunes and his new partner, Foxwoods, even though it would likely pull in less revenue for the state.
But as I talk to Wynn in his Las Vegas villa, the big shakeup remains weeks away. He is simply relieved to hear that, earlier in the day, the Gaming Commission has all but dismissed Menino’s charge that the Wynn project encroaches on Boston land. “His name is Thomas, isn’t it? Tom Menino’s personality is well known by everybody, and that includes members of the casino commission,” he says.
Wynn, of course, believes he would make an unparalleled impact on the state, and Everett. Since his company is publicly traded, meaning that its highest duty is to its shareholders, I ask him if he feels any extra responsibility to Everett, considering the trust the city has placed in him, or to DeMaria, who has staked his political career on him. Wynn replies that he has a long history of doing good in the community.
Still, he says, “I am not responsible for anybody in Massachusetts. Everybody in Massachusetts is looking to get something from me. Let’s get something straight. Who’s the issuer here of the goodies? They’ve got a piece of property that they can’t use. Massachusetts has got a piece of property that’s dirty and they can’t use. I’m the damn fool that wants to come and spend a billion and two or three hundred million dollars, paying the state money, giving jobs to people in town. Whose career is dependent on what is a mystery to me. All I know is I work for this company and I only give a damn about this company.
“If it happens that I get employees in a business in Everett, my attitude will be exactly the same toward them as it is toward these people here. But right now, I’m just a guy standing by to see if I’ve got a deal.”
Everett and Boston are standing by, too.