Southeastern Massachusetts Is a Complete Mess

How the state is blowing it on casinos in the southeastern region.

mashpee wampanoagIllustration by Justin Metz for “The Big Gamble

Massachusetts sure has made a hash of the casino situation down in its southeastern region. The state casino law calls for the state to be split into three separate areas, with commercial developers competing for licenses in the eastern and western zones. The southeastern zone, though, was to be reserved for the Mashpee Wampanoag Indian tribe—commercial bidders only get a shot at that region if the tribe fails to open a casino there.

The thinking was pragmatic enough: If the tribe is ever able to convince the federal government to grant them reservation land, they’d be able to open a gambling hall without the state’s blessing (and without contributing nearly as much to state coffers). So Massachusetts was basically bargaining for a trade-off: We make sure you don’t have any competition, and you give us extra money. Boom. Easy, right?

Well, it turns out that the state drastically underestimated how difficult it would be for the Mashpee Wampanoags to open a casino. I wrote about all the challenges that the tribe faced last year, and many of the same obstacles remain. They still need to hash out an agreement with Massachusetts, called a compact, over how much taxes the tribe will pay (the first effort was rejected by the U.S. Department of Interior). The tribe also still needs to get the feds to grant them reservation land.

This last bit is particularly sticky, considering that it is technically against the law. The Supreme Court ruled in 2009 that only tribes federally recognized before 1934 could be granted land into trust for a reservation. The Mashpees were federally recognized in 2007. Arguing that the Supreme Court ruling was based on a technicality, The Department of Interior has tried aggressively to work around it, even bucking the ruling to grant land into trust for the Cowlitz tribe in Washington state. Just like the Mashpee, the Cowlitz tribe has grand plans for a casino, but, as you might expect, their case is tied up right now in court (usually, when you defy the Supreme Court, there tends to be a lawsuit). As you also might expect, the situation will take a long, long time to resolve.

It’s a pretty fair assumption, then, that the Mashpee Wampanoags won’t be building any casino on any reservation land anytime soon. Congress is unlikely to offer a fix and, even if the Interior Department offers them a workaround similar to the Cowlitz, undoubtedly, any development will be put on ice by lawsuits.

This is where things get interesting for the state gaming commission. They need to decide if a Mashpee Wampanoag casino is so unlikely that they should open up the southeastern region to commercial bidders. The ever-vague Massachusetts casino law states:

“If, at any time on or after August 1, 2012 the commission determines that the tribe will not be granted land-in-trust by the Bureau of Indian Affairs at the United States Department of the Interior, the commission shall consider bids for a category 1 license in Region C.”

Well, shoot. It’s a total judgment call and it’s totally dependent on how patient the commission is. Will the Mashpee Wampanoags be granted a reservation in the next 25 years? Nobody can say for sure, but yeah, probably. The technicality that the Supreme Court ruling is based on will likely get worked out eventually. But how about in the next one, two, or three years? Who knows, but it doesn’t look good right now. In the meantime, the state’s southeastern region is falling behind.

That’s why the Globe reports this morning that the gambling commission is taking the first baby steps toward opening the southeastern region up to commercial bidders. Baby-steps being the key. The Globe‘s Mark Arsenault reports: “The commission indicated that it would probably drop the commercial bids if the tribe makes significant progress on winning approval for its casino, creating a potential risk for would-be developers.” So in other words, if you’re a commercial developer, you’ve got a good chance of getting screwed.

Putting together a casino bid is so expensive—the application fee is $400,000, to say nothing of the planning costs—and there’s so much uncertainty that no big casino developers have even come close to investigating the southeastern region. The gambling commission’s equivocations won’t help attract anyone either. There’s one group that’s had a persistent interest in opening a casino in New Bedford, KG Urban Enterprises, but they’re more of a small, boutique outfit. All the big boys have stayed away. (Meanwhile, KG Urban has their own lawsuit going against the state setting aside the region for the Mashpees in the first place.)

So where does all this leave us? With a tribe stuck in limbo and a watered-down crop of backup options. This thing could drag on for years, putting southeastern Massachusetts at a major competitive disadvantage. Perhaps worst of all is what this has done to the Mashpee Wampanoags. As I wrote about last year, the casino process has struck deep divisions into the tribe. And the tribe has borrowed so much to pursue their gambling dreams, that if they fail, they’ll be left totally bankrupt.