What the Suffolk Downs Crash-and-Burn Means for Boston

Imagine that you spent six years baking a cake—obsessing over the recipe, delicately frosting it, ornately designing each curlicue of icing—only to have someone pick the thing up and slam it in your face. That’s basically what happened to Mayor Tom Menino and organizers from Suffolk Downs, who watched their long-held plans for a grand East Boston casino go down in flames on Tuesday night. Eastie voters rejected the project by an emphatic 56-44 percent margin.

Over the last several months, Suffolk Downs seemed to poll a consistent plurality of the vote in East Boston (somewhere in the high 40s, usually), but being forced to drop their partner Caesars from the project after word came that the giant gaming company would fail its background check seems to have done Suffolk in. (Of course, lots of credit also has to go to the tireless grassroots efforts of the No Eastie Casino group, which, with barely any money, overcame the $2 million Suffolk Downs spent on campaigning.) Let’s break down the fallout:

Suffolk Downs says it may try to reconfigure its bid to be located only in Revere, where it owns 52 acres and the casino referendum was approved by a wide margin. Really, it’s not even clear if they can do this without reaching a new host community agreement with Revere, scheduling a new vote, and having their entire application process reset and be completed by the state gaming commission’s December 31 deadline. “The commission would need to review any alternative proposals,” gaming commission spokesperson Elaine Driscoll told me on Tuesday night. “It is too early to say at this point without close review of the statute and knowing specifics, etc.” This morning, commission chairman Steve Crosby called the idea “a hail mary.”

This does not look good for Menino. He spent a considerable amount of capital pushing the Suffolk Downs project, advocating strongly for an East Boston-only referendum (at the exclusion of the rest of the city). The thinking was that an Eastie-only vote would make it easier for the referendum to pass. Beyond that, it’s difficult to overstate the amount of time and resources that went into this project. Negotiations on the host community agreement—which is incredibly thorough and detailed—took the better part of two years, and consumed top aides. Even though Suffolk Downs, by statute, was forced to cover the cost of the negotiations with Boston, that’s time that Menino and his staff can’t get back—in the precious last months of his mayoralty, no less.

Say so long to the ponies. When owner Richard Fields bought into Suffolk Downs in 2007, it was with the explicit purpose of opening a casino beside the old horse track. It’s been years since horse racing itself was a viable industry in Massachusetts, and without the lure of a casino, it’s most likely a matter of time until the 78-year-old track, which employs some 300 people, shutters its doors for good.

Just because Boston will not have a casino doesn’t mean it won’t have a casino in its backyard … and all the problems that go with it. Aside from Suffolk Downs, there are two remaining bidders for the single casino license to be issued in eastern Massachusetts: Steve Wynn in Everett and a bid from developer David Nunes and his partner, Foxwoods, in Milford. The Everett referendum passed months ago with a jaw-dropping 86.5 percent of the vote while the Milford vote is scheduled for November 19 and no sure thing. If Milford does approve its referendum, it could well be that the five state gaming commissioners tasked with picking the winning bid opt for Milford’s suburban location, but Wynn’s project in Everett seems to have a clear advantage. The state gaming law stipulates that the top two priorities in considering bids should be potential for revenue for the state and economic development: a casino in Everett, just over the bridge from Boston, would almost certainly make more revenue (and therefore more revenue for the state) than one in Milford, and the case for economic development on a polluted site in hardscrabble Everett is also likely more convincing than the one in Milford. But the gaming commission has been unpredictable in the past, so don’t count on them being predictable in the future.

The ball is in the gaming commission’s court. Wynn has yet to pass his background check and, although he told me (loudly and clearly) that he expects no problem with it, Caesars didn’t expect any problems, either. Wynn does do business in Macao, which has a different set of laws and a different way of doing business. It’s not clear yet what view the gaming commission will take of all that. Meanwhile, MGM, which is trying to open a casino in Springfield, may even have a bigger Macao problem on its hands. Because of its association with Pansy Ho, the daughter of the controversial Macao casino godfather Stanley Ho, that company has come under scrutiny, and was even banned in 2010 from operating in New Jersey. With Mohegan Sun also losing its referendum in Palmer last night, and MGM the only remaining applicant for the western Massachusetts casino license, who knows what’ll happen out there.

The biggest takeaway? We’re years away from one of these gambling meccas opening its doors in Massachusetts, and already we’ve reached full-scale casino chaos.