Today the Massachusetts Gaming Commission announces that KG New Bedford, LLC has officially submitted the first application (Phase 1) and the non-refundable $400,000 application fee in a two-phase application process toward the award of a commercial expanded gaming license in Southeastern Massachusetts (Region C).

In addition to the KG New Bedford, LLC application,  gaming applicants currently seeking a resort-casino license in Region A (Eastern Massachusetts) or Region B (Western Massachusetts), as well as slots applicants, are not required to submit Phase 1 applications for Region C. However, those applicants may choose to pursue Region C depending upon the outcome of other licensing decisions.

Consistent with MassGaming’s licensing process in Regions A and B, MassGaming will conduct a bifurcated process, Phase 1 and Phase 2, to first allow for the determination of background qualifications and ‘suitability’ of applicants (Phase 1 ) in advance of the review of an applicant’s entire or ‘site specific’ application (Phase 2 ).

The due diligence investigations to determine ‘suitability’ for Massachusetts entity applicants covers their regulatory history in other jurisdictions, financial stability, compliance plan and history, and recent litigation, among other areas. The investigations for qualifiers – those individuals who are officers, board members or key investors of the applicant – will cover their employment history, criminal record, education, stockholdings and financial suitability, among other areas.

MassGaming’s Investigations and Enforcement Bureau will immediately commence a background investigation for KG New Bedford, LLC. If suitability determinations are made, the Commission will issue a Phase 2 (site specific) Request for Application (RFA) and a deadline for responses. After the Phase 2 RFA deadline, the Commission, using the same evaluation criteria it will use in Regions A and B, will make a decision about award of a commercial license after taking into account the economic consequences of the then current status of the Tribal-State and Federal Trust Land process, the contents of the commercial Phase 2 RFA responses, the regional and statewide gaming and other economic conditions then existing and forecast, and all other relevant information as it then exists. Based on the schedule for Regions A and B, it is likely that the Commission will be in a position to make its Region C licensing decision toward the end of 2014.

Background:

In southeastern Massachusetts, possible casino gaming is complicated by Federal Indian Gaming Regulatory Act (IGRA) provisions which allow casino gaming by Indian Tribes. The Massachusetts Gaming Act provided a window until July 31, 2012 for the Governor to negotiate and the Legislature to approve a “compact” with one or more Indian tribes for the right to operate a casino in the southeast region.

With the approval of the Legislature, the Governor signed a compact with the Mashpee Wampanoag Tribe on July 30, 2012. The Compact was returned to the Governor’s Office from the Department of Interior requiring renegotiation. The Mashpee Wampanoag Tribe has purchased land in Taunton, MA, and must have that land put into trust for gaming purposes by the federal Department of Interior before they can begin casino development.

On March 20, 2013, Governor Deval Patrick and Chairman Cedric Cromwell announced that a new gaming Compact between the Commonwealth and the Mashpee Wampanoag Tribe had been signed. The Compact has been sent to the Legislature for approval.

On April 18, 2013, the Massachusetts Gaming Commission adopted a plan to open Region C to commercial applications.