Does it matter that Mohegan Sun outspends Wynn?
Casino handouts to local communities are becoming a hot issue in the competition between Mohegan Sun and Wynn Resorts for the Greater Boston casino license.
Mohegan Sun is promising to hand out a lot more money to the 13 communities surrounding its proposed Revere casino than Wynn Resorts is offering the nine municipalities around its proposed Everett gaming palace. The handouts are different, so the variation between them is hard to quantify, but it appears Mohegan Sun is doling out about $52 million annually to local communities, while Wynn is offering up more than $30 million.
Wynn officials say Mohegan Sun is using the payments to buy support for its casino, while Mohegan Sun has portrayed its largesse as an outgrowth of being a good New England neighbor. Mohegan Sun operates a casino in Connecticut, while Wynn is based in Las Vegas.
“Our host and surrounding community agreements will send more than $50 million in direct annual payments to local communities,” Mohegan Sun said in a full-page advertisement that appeared last month in the Boston Globe. “Our competitor has already defeated two local communities in arbitration – just another reason that Mohegan Sun is the better choice for Massachusetts.”
Wynn officials say they are just doing what state regulations require them to do, provide money to mitigate the impact of their proposed casino. They say they did not defeat Chelsea and Somerville in arbitration, but instead won the support of arbitrators for their mitigation approach.
“The regulations are clear that surrounding community agreements should mitigate adverse impacts,” said Michael Weaver, a spokesman for Wynn, in a statement. “We have followed the regulation, as we always do, and done precisely that with each of our agreements. Surrounding community agreements are not intended to be an opportunity to purchase support for a license, and we would be surprised if the Massachusetts Gaming Commission intended it as such.”
Officials at the Gaming Commission declined comment. State regulations require casino applicants to strike mitigation agreements with their host and surrounding communities, but the regulations don’t require the agreements to take any particular form. Moreover, mitigation needs vary from community to community and casino to casino, so it’s difficult to make comparisons.
Mohegan Sun is offering to make $51 million in annual payments to its surrounding communities. Revere, the host community, would receive about $25 million a year once the casino opens, while Boston would receive more than $20 million. The annual payments to other communities range from $50,000 a year for Cambridge, Melrose, Salem, and Somerville to $2.5 million for Chelsea and $850,000 for Saugus.
Revere would also receive more than $71 million in one-time payments — $33 million in a direct payment to the municipality and $38.2 million for a series of transportation improvements in the area. Boston would receive $10 million in one-time payments. Wynn says it has committed to $50 million in transportation improvements in Everett and the surrounding areas, including Boston, Medford, Chelsea, and Revere.
The agreements signed by Wynn commit the Las Vegas company to paying out $11.3 million annually, with $5.3 million going to Everett, $2.6 million going to Boston, and just over $1 million each to Malden and Medford. Lynn and Melrose would receive no annual cash payments but would receive some jobs and vendor preferences under the deals they negotiated with Wynn. Wynn also expects to hand out $32.9 million in one-time payments, including $30 million to Everett.
Tax payments by Wynn and Mohegan Sun make comparisons between the mitigation payouts of the two companies difficult. Wynn has negotiated a fixed annual tax payment to Everett of $20 million, which raises its total annual outlay to surrounding communities to more than $30 million. Mohegan Sun, by contrast, said in its agreement with Revere that it plans to negotiate a payment-in-lieu-of-taxes agreement with the municipality and reduce its annual payments to the city by a corresponding amount.
Both Mohegan Sun and Wynn promise to steer purchases to local communities. Mohegan Sun says it hopes to annually spend $50 million in Boston and another $50 million in communities within 15 miles of the casino. Wynn says it hopes to purchase $15 million worth of goods annually from Boston vendors, $10 million each in Malden, Medford, Everett, and Somerville, and $2.5 million in Chelsea.
Most of the payments made under the agreements are generic in nature, but some deals call for specific groups to receive money. Wynn, for example, would set aside $100,000 a year for the Chevalier Theatre in Medford, a $250,000 one-time payment for a garden in Medford to commemorate the victims of the Boston Marathon bombing, and $250,000 a year for the Everett Citizens Foundation. Mohegan Sun sets aside $2 million for the renovation of the Harry Della Russo stadium in Revere and $1 million for a new youth center.