And They’re NOT Off:Horse Racing, Simulcasting is Suspended as Legislature Fails to Act

And They’re NOT Off:Horse Racing, Simulcasting is Suspended as Legislature Fails to Act

Live racing and simulcasting have been suspended at Suffolk Downs and all other horse tracks and betting facilities in the state due to the fact that the State Legislature did not act to renew the Simulcast Bill before the end of its formal session at midnight on July 31.

The renewal has been routine for several years.

The news came out of Beacon Hill early Wednesday morning that horseracing and simulcasting had suddenly become illegal in Massachusetts overnight. It seemed like fantasy, but soon the news was solidified.

In order for horse tracks like Suffolk Downs to operate live racing and simulcasting, the annual bill has to be renewed by the House and Senate by July 31. The Legislature did not do that this year.

There were few comments from legislators on the matter, but Suffolk Downs had its placard off Wednesday morning, a placard that usually advertises simulcast betting on Saratoga races for that day.

Later in the morning, the Massachusetts Gaming Commission (MGC) put out a letter of direction to Suffolk Downs, Plainridge Park and Raynham Taunton Greyhound Park.

The letter said that the Commonwealth’s legislation for live racing and simulcasting had expired on July 31 at midnight and no action had been taken to renew or replace it.

“As of today, there is not statutory authorization for live horse racing or simulcasting in the Commonwealth,” read the letter. “Please be advised that until further notice from the Gaming Commission, simulcasting in all forms under any license at your facilities is suspended. Further, live racing at Suffolk Downs and Plainridge Park is also suspended until further notice.”

The MGC added the item as an emergency agenda item for its meeting today, Aug. 2, in Springfield.

The news complicated things tremendously for Suffolk Downs, which had planned and proceeded with a weekend of live racing for Aug. 4 and 5. That event is now in great doubt as there is no law allowing live racing in the state.

Reportedly, many of the horses and support personnel had already begun the trek up to Massachusetts from other states for the live races.

Many were left to ask why it had happened without warning.

There were no official comments on Wednesday from the Legislature, but numerous sources near the situation indicated it revolved around a growing rift between the leadership of the House and Senate.

It was believed by those sources that when a very important priority item for the Senate leadership didn’t pass the House – the gender equity bill – then the Senate in turn blocked the action on the renewal of the Simulcasting Bill.

One course of action to fix the matter is to address it during an informal session this week. However, during an informal session, rather than with a roll call vote of everyone, only one objection to any matter by any member can kill it under the rules of the body. That makes restoring the bill even more difficult, especially if there is a political rift between the two houses.

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Horse Racing, Simulcasting Suspended as Legislature Fails to Act

Horse Racing, Simulcasting Suspended as Legislature Fails to Act

Live racing and simulcasting has been suspended at Suffolk Downs and all other horse tracks and betting facilities in the state due to the fact that the State Legislature did not act to renew the Simulcast Bill before the end of its formal session at midnight on July 31.

The renewal has been routine for several years.

The news came out of Beacon Hill early Wednesday morning that horseracing and simulcasting had suddenly become illegal in Massachusetts overnight. It seemed like fantasy, but soon the news was solidified.

In order for horse tracks like Suffolk Downs to operate live racing and simulcasting, the annual bill has to be renewed by the House and Senate by July 31. The Legislature did not do that this year.

There were few comments from legislators on the matter, but Suffolk Downs had its placard off Wednesday morning, a placard that usually advertises simulcast betting on Saratoga races for that day.

Later in the morning, the Massachusetts Gaming Commission (MGC) put out a letter of direction to Suffolk Downs, Plainridge Park and Raynham Taunton Greyhound Park.

The letter said that the Commonwealth’s legislation for live racing and simulcasting had expired on July 31 at midnight and no action had been taken to renew or replace it.

“As of today, there is not statutory authorization for live horse racing or simulcasting in the Commonwealth,” read the letter. “Please be advised that until further notice from the Gaming Commission, simulcasting in all forms under any license at your facilities is suspended. Further, live racing at Suffolk Downs and Plainridge Park is also suspended until further notice.”

The MGC added the item as an emergency agenda item for its meeting today, Aug. 2, in Springfield.

The news complicated things tremendously for Suffolk Downs, which had planned and proceeded with a weekend of live racing for Aug. 4 and 5. That event is now in great doubt as there is no law allowing live racing in the state.

Reportedly, many of the horses and support personnel had already begun the trek up to Massachusetts from other states for the live races.

Many were left to ask why it had happened without warning.

There were no official comments on Wednesday from the Legislature, but numerous sources near the situation indicated it revolved around a growing rift between the leadership of the House and Senate.

It was believed by those sources that when a very important priority item for the Senate leadership didn’t pass the House – the gender equity bill – then the Senate in turn blocked the action on the renewal of the Simulcasting Bill.

One course of action to fix the matter is to address it during an informal session this week. However, during an informal session, rather than with a roll call vote of everyone, only one objection to any matter by any member can kill it under the rules of the body. That makes restoring the bill even more difficult, especially if there is a political rift between the two houses.

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Behind the Scenes:A Day When Racing Returned at Suffolk Downs

By Joe Prezioso

Empty barns and buildings line the back lot of Suffolk Downs.

Birds and bees have made their nests and hives; and plants grow where horses once trained.

Some buildings look like they haven’t been used in a long time, some might have been, but not last weekend.

On Saturday, Oct. 3, there was life where there hasn’t been any for a while.

It was rainy and cold and Friday morning as trainers, owners and jockeys prepared for the big day of racing the next day, Oct. 3.

The barns were damp and workers like Moises Sanchez were hard at work getting ready for Saturday’s race.

Racing returned to Suffolk Downs for a second time this year.

The barns that were only home to the birds and bees are now full of hay and Thoroughbreds that are waiting to run. Owners brought their horses from up and down the East Coast to return to racing at the historic Suffolk Downs.

“I am always excited to be home,” said Jay Bernardini as he pet Navy Nurse, a celebrated Thoroughbred.

A horse owner and trainer, Bernardini brought nine horses to Suffolk from his stalls at Laurel Park Racetrack in Maryland.

“I am a Lynn resident. My wife and son actually stay behind and I kinda co-habitat in Maryland and fly back and forth,” he said. “I have been racing here my whole career. When they are not racing here, I go somewhere else. I am a full time trainer, so I have no option but to leave my family and go somewhere else. Where there’s racing is where I’ll be.”

Hellen Honsdottir and Moises Sanchez were on site at 6 a.m. last Friday to prep the horses for Saturday’s racing. Giving the horses fresh food, fresh hay, washing them down and making them look good. Some horses had their shoes replaced and others just went round and round the barns getting some exercise with the hot walkers.

Honsdottir was excited to be back at Suffolk.

She started working with horses just over two years ago while the track was still open. When she got the chance to be back here for three days, she jumped at the chance. Unlike many of the other groomers, trainers and hot walkers, Honsdottir has not migrated to another track and took work in Waltham at a stable, but she would rather be working with racehorses.

The owners greeted their horses, talked to them and embraced them Friday morning. Like spoiled dogs, these horses have it good.

The racing day also brought back local employees that haven’t been out on the track since the last racing day in September.

“I thought it was very encouraging. It was like you can’t kill the place. Open the doors and people will come,” said Outrider Cathy Chumbley in regards to the last racing day in September.

Most of the owners and crews know each other and share a camaraderie that is not seen in other workplaces. Everyone does everything; owners train and groom their own horses and then possibly for someone else.

The lure of a day of racing even brought back Wayne Marcoux, a trainer and a owner who had no current horses on site.

A Revere resident, he came down just to help.

“My father was a trainer,” said Marcoux. “I took out my trainer’s license and came down to help out.”

Not everyone can just walk on over though for a day of racing.

Owners like Bernardini, who came from Maryland, had to drive many hours.

“We have known about these races for 30 days, so all the prep work is down. We left at exactly 11 p.m. (Thursday) and we got over the George Washington Bridge (NYC) at 3 a.m.”

However, once they arrived at Suffolk they realized they had left the bridles back in Maryland and had to get someone on an airplane flight right away to get them. Such is the challenge of a one-day, ship in racing card.

Bernardini said that what his horses need now is “rest and relaxation.”

With the racing on Oct. 3, there will be one more day of racing on Oct. 31. Many people want to get more racing at Suffolk, but it’s an uphill battle. “Suffolk Downs in not interested in opening up and losing money,” said Bernardini. “There are

Abel Mendoza grooms ‘lu lu la la.’

Abel Mendoza grooms ‘lu lu la la.’

other people trying to force racing where there is none and I don’t think that’s a realistic thing. It has to be a two-way street. The racetrack has to be able to be viable and feasible financially and offer a product that is feasible for me. I have to be able to make a living.”

Where racing in Massachusetts will end up is anyone’s gamble right now, but for the past weekend, the horses and their teams were back at the historic oval.

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Fire at Suffolk Downs

Fire at Suffolk Downs

C1A three-alarm fire broke out Tuesday evening in the barn area at Suffolk Downs racetrack in Revere. Fire crews from all over the area rushed to the scene to put out the red-hot, smoke-belching blaze. Flames were readily apparent and smoke could be seen towering from the area for miles. Chelsea Engine 3 and Ladder 2 responded directly to the fire when Revere Fire struck a second alarm. Both of the Chelsea companies helped contain the fire for about three hours from the rear of the site. Chelsea firefighters played a key role in making sure the fire didn’t spread to the adjacent stables – where horses had been housed in preparation for the May 3 Derby Day/Opening Day. One Chelsea firefighter was injured and transported to the Whidden Hospital – possibly suffering a fractured elbow.

The fire broke out just after 5 p.m. and was contained by 8:30 p.m. It apparently started in the kitchen of the commissary building where jockeys and support staff often eat. That building was burnt to oblivion, but the horses and stable barns were preserved. Representatives from Suffolk Downs said they do not plan on canceling the May 3 festivities, and they were grateful to Revere, Chelsea and other departments that helped contain the mammoth blaze to only one building. Most agreed the situation could have been far worse in terms of damage.

The area is directly on the spot where Mohegan Sun has proposed to build a casino and entertainment complex – drawing even more attention to the fire.

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Council Unanimously Approves Casino Compact

Council Unanimously Approves Casino Compact

The City Council unanimously endorsed a resolution authorizing City Manager Jay Ash to enter into a $2.5 million a year mitigation Surrounding Community Agreement (SCA) with Mohegan Sun at its meeting on Monday night.

Manager Ash and City Council President Matt Frank negotiated the agreement to address public safety and other potential concerns raised should Mohegan Sun win the Region A gaming license it seeks for the building of a $1.4 million resort casino at Suffolk Downs in Revere.

“This is a great package for Chelsea, 2.5 times richer than any other surrounding community agreement anyone has signed in Massachusetts,” said Frank. “It addresses our concerns and allows us to focus on the benefits of having 4,000 jobs and more than a billion dollars of investment at our doorstep,” said Councillor Frank.

Massachusetts law requires casinos to have SCAs with neighboring jurisdictions that may be impacted by casino operations. Casino operators can voluntarily agree to designate a municipality as such, or that municipality can seek designation through a process led by the Massachusetts Gaming Commission (MGC). In Chelsea’s instance with Mohegan Sun, the parties long ago agreed that Chelsea should be awarded surrounding community status.  Discussions began with Suffolk Downs and culminated with Mohegan Sun agreeing to the $2.5 million a year compact.

Last week, Ash released the details of the agreement.  As many as seven new police officers will be hired and other operations funded with a total of $675,000 to address general patrolling, criminal investigations, vice activities and traffic concerns.  Two 9-1-1 operators, at a cost of approximately $100,000, will be hired to handle the additional call volumes of those police officers and others. The schools will receive $850,000 for day and after-school programming and scholarships. Job training and English classes will benefit with $100,000 each. Youth programming is set to receive $100,000 and cultural activities another $50,000.  Infrastructure improvements will be funded with $425,000, and addiction services will receive $100,000. The agreement includes an escalator clause that will raise payments by the lesser of inflation or 2.5 percent annually.

“The package is substantial and far-reaching,” said Ash. “In addition, we have agreement that at least 200 jobs will go to Chelsea residents and $2.5 million will be spent annually on local businesses. Local businesses will also be able to accept Mohegan Sun rewards cards. We are also going to benefit from improvements made on Revere Beach Parkway, summer jobs and regional planning.”

Ash has been a leading advocate of the casino movement in Massachusetts, which Frank suggests may be a reason why Chelsea is set to receive an amount far in excess of any other SCA to date. Around the state, surrounding communities have been agreeing to compacts that have ranged from $50,000 to $1 million. While Ash has been a champion, some councillors found themselves reluctantly supporting the SCA.

“I may not like the direction the state is going with allowing casinos to operate here, but if they are coming I want to make sure Chelsea gets every benefit possible,” argued Councillor Brian Hatleberg, whose sentiment seemed to speak for several of his colleagues.

State law does not require a vote of the Council to support the SCA, but Ash pledged to do so anyway to make sure City officials were on the same page.

“This is an historic agreement for Chelsea, and I want to make the Council has had a chance to review and endorse it,” Ash said to councillors.

A similar agreement has not been reached with Wynn Resorts, which is proposing a $1.2 billion resort casino on Route 99 in Everett.  Ash and Wynn were at odds early in this month about Chelsea being designated a surrounding community, that despite Chelsea being the same seven-tenths of a mile from both the Revere and Everett sites.  Last week, Wynn did officially recognize Chelsea as a surrounding community and negotiations are said to have begun.

“We’ll see where that one goes.  For tonight, though, we’ve confirmed that Chelsea’s best interests will be protected and advanced with a great package should Mohegan Sun receive the designation.

“The folks at Mohegan Sun have been great to deal with, and our friends at Suffolk Downs have been our friends for 75 years. I’m excited about their partnership and our collaboration, and I do believe that many benefits will accrue to our region as a result of a resort casino being awarded to Revere,” said Ash, who says that he favors the Revere site for the Region A designation.

Not only is the Chelsea/Mohegan Sun compact contingent on the awarding of the Region A license to Mohegan Sun, but Revere voters must approve a Feb. 25 referendum question as a host community of the site.

“I’m very optimistic about the Revere vote because Revere Mayor Dan Rizzo is doing a great job articulating the huge benefits Revere will derive from the Mohegan Sun development.

“It’s a once in a lifetime opportunity to inject billions of dollars of economic vitality into Revere and the region.  I support the Revere vote and am fully convinced that their partnership with Mohegan Sun will have a dramatically positive impact on all that Revere can and will accomplish under Mayor Rizzo’s leadership thereafter,” said Ash.

OTHER COMMUNITIES GET AGREEMENTS

Mohegan Sun announced late on Tuesday that it had reached SCAs with seven localities in and around Revere, including Cambridge, Chelsea, Lynn, Malden, Medford, Melrose and Salem.

The casino company has also designated Boston, Saugus and Winthrop as Surrounding Communities, but is still in continued discussions with those communities.

The local impact payments will total $3.75 million among the seven municipalities – with Chelsea getting $2.5 million of that.

The agreements also ensure that small businesses in the communities will have access to millions of dollars in annual spending by the proposed $1.3 billion development and that residents in these communities will be given job opportunities at Mohegan Sun Massachusetts and have access to job training programs and problem gambling services.

“We are pleased to announce these agreements, which represent an important step in our efforts to develop an incredible destination that will benefit the entire region with the creation of new jobs, economic development and tourism opportunities,” said Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority. “Each of these communities have been a great neighbor to Revere and Suffolk Downs, and these agreements illustrate Mohegan Sun Massachusetts’ commitment to work in partnership with our neighboring communities.”

Mohegan Sun Massachusetts expects to spend about $50 million annually on goods and services from businesses located within a 15-mile radius of Revere once the resort is fully operating. Similarly, MSM expects to create 4,000 jobs and has committed to hiring 75 percent of its workforce within the same 15-mile radius.

Also included as part of the agreed-upon terms are strong commitments to regional economic development and benefits – such as the cross marketing of tourist attractions and cultural institutions in these communities, and providing local businesses with access to vendor opportunities and Mohegan Sun’s industry leading players club points program. Mohegan Sun has also agreed to fund approximately $1 million in additional study and design of regional traffic solutions not related to the impacts of the proposed resort. Mohegan Sun also has terms for agreements in principle with Cambridge, Lynn, Malden, Medford, Melrose and Salem, subject to city council approval.

“Our relationships with our surrounding communities is very important, and we appreciate the hard work and thoughtful approach of each of these city leaders to reach these agreements,” said Chip Tuttle, Chief Operating Officer of Suffolk Downs.  “Mohegan Sun Massachusetts will not only preserve the future of Thoroughbred racing at Suffolk Downs, but it will create new economic and tourism opportunities for the entire region.”

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Compromise Keeps Casino Proposal at Revere’s Suffolk Downs Site Alive

Compromise Keeps Casino Proposal at Revere’s Suffolk Downs Site Alive

While many were expecting a finite decision by the Massachusetts Gaming Commission (MGC) on Tuesday afternoon considering the Revere-only casino, the Commissioners instead surprised everyone by agreeing to a very detailed compromise that will allow the proposal to go forward with a caveat.

The caveat being that Revere must take another vote for the new Mohegan Sun proposal, and that the Commission would give the new proposal a waiver for its Dec. 31 application deadline – a waiver that would only allow them to turn in the results of the vote after the deadline.

Commissioner Jim McHugh came up with the compromise and, at the outset, explained that he would rather have the voters decide the issue rather than the Commissioners, as he believes the new proposal is very different than the previous proposal and needs another public weighing.

“The dichotomy here is letting the voters decide or letting us decide whether this proposal moves forward,” he said.

The McHugh Compromise – which was agreed to in a ‘yay’ or ‘nay’ vote rather than a roll call vote after about one hour of discussion – allows Mohegan Sun/Suffolk Downs to make the decision about what it wants to do. If it wants to continue on the current course, the matter will come back to the MGC for an ultimate vote as was expected Tuesday.

If the applicant chooses the McHugh Compromise, then a second Revere-only vote would be scheduled for 60 days later – approximately.

Meanwhile, Mohegan Sun – who is the new applicant, with Suffolk Downs being the landlord – would have to proceed with the regular Phase 2 application, without the vote results. They would be required to turn in the application – likely accompanied by a new or amended Host Community Agreement – by Dec. 31. The Commission would begin evaluating the Phase 2 application in January while Revere would prepare for a mid-February referendum vote of the new project. That referendum would likely also contain the details of a new or amended host community agreement.

“If the vote is successful at that time, nothing would change and we would continue on with the evaluation of the applicant,” said McHugh. “If it wasn’t successful, the evaluation would stop and we would be evaluating only one proposal. A successful vote would allow us to proceed with two applicants, stay on schedule and have a license decision made in mid- to late-May.”

McHugh said he believed that his compromise was allowed because it was only making an exception to the regulations and not the law – and also because it was fair.

“We’re making a particular exception to one regulation,” McHugh said, citing the exact regulation (205 CMR 119.01). “We have no power to change the statute. We’re changing our regulations, which we do have the power to change…We are giving them a waiver for one aspect, for certification of a vote for a Revere-only casino…It is fair to everybody – not happy for everybody – but it does seem to be fair to everybody and, ultimately, lets the voters go to the polls and do what the statute provisions.”

MGC Attorney Catherine Blue said she believed that it was proper.

“I think this compares with the way we’ve analyzed similar situations in the past,” she said. “We are being consistent. We are valuing competition.”

Competition was a key point of the McHugh Compromise, in the end. Many of the Commissioners cited the fact that they preferred to continue on with multiple proposals, and perhaps that’s what swayed them to allow the proposal to move forward.

That was stated by Chair Steve Crosby, who listed competition as the number one priority in a list of three reasons why he prefers the McHugh Compromise.

“I think this is a very consistent idea; it’s good,” he said. “In a deeply complex situation, this is about as fair a proposal as a person could have come up with.”

Added Commissioner Gayle Cameron, “We value the competition. We did have one positive vote here and I think this proposal makes sense moving forward.”

Crosby did wonder aloud if the other applicant, Steve Wynn, might cry foul due to the waiver – as he had his successful vote last June and is seemingly ready to submit his full Phase 2 application on time if allowed by the MGC.

“I just want to think about who will feel their ox is being gored,” he said.

Commissioner Enrique Zuniga said he didn’t feel that Wynn had an argument because they entered into the process knowing there would be competition, and Mohegan Sun isn’t exactly a new face on the scene – having gone through the process from the beginning in order to try to open a casino in Palmer.

“Mohegan Sun complied with the deadline of January 15,” he said. “We never made the deadline site specific. It’s not as if someone is parachuting into the middle of this so that some other applicant would say it isn’t fair.”

After approving the McHugh Compromise unanimously, the ball now falls into the court of Suffolk Downs/Mohegan Sun.

Mitchell Etess, CEO of Mohegan Tribal Gaming Authority had the following statement after the hearing:: “We look forward to working in cooperation with our host community of Revere on the path the Commission outlined today. Mohegan Sun’s strong brand recognition combined with Suffolk Downs’ more than 75 year history truly makes this a home team project. We are grateful for the strong support of residents, business leaders and elected officials in Revere and throughout the region.  Our resort casino will create thousands of new jobs, new opportunities for small businesses and additional economic development and tourism throughout the region.”

Chip Tuttle, COO of Suffolks Down said, “On behalf of our family of employees and horsemen and women, it is gratifying that the Commission has provided this option to move forward with the City of Revere where we have enjoyed substantial support and our gaming partner and developer Mohegan Sun on its vision for a world-class destination resort on the Revere portion of our property. We look forward to the next steps.”

Meanwhile, another big hearing is scheduled for Friday involving the Wynn proposal. It’s a hearing that could end up making the competition argument moot. Wynn will appear before the Commission to discuss the particulars of the land deal in Everett – a deal that Crosby said last week “involved a possible hidden ownership and/or other difficult issues which could threaten the public trust in this process, and which make the Commission’s deliberations particularly important and sensitive.”

Crosby has recused himself from that vote due to a prior business relationship with one of the official landowners. If the MGC votes not to allow the Wynn proposal to move forward on the identified land, it could end up negating that project and leaving the Mohegan Sun/Suffolk Downs proposal all alone – pending an affirmative second vote.

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Casino in Revere Being Considered

Casino in Revere Being Considered

In the wake of a ‘no’ casino vote in East Boston last Tuesday – Suffolk Downs and the City of Revere are preparing to make an 11th hour pitch to the Massachusetts Gaming Commission (MGC) for a scaled-down casino development located at the barn area entirely in Revere.

The plan by Suffolk brings up more hurdles and obstacles than in a steeplechase race, including the possibility of closing or moving the horse track and the clarification as to whether the vote in Revere actually qualifies.

The new Revere-only plan began to hit the public square before the final voting numbers had even been reported, with most people hearing and reacting in a confused manner as it was always predominately understood that the casino development was a joint effort and required a joint ‘yes’ vote.

However, Suffolk Downs COO Chip Tuttle said this week that he has always indicated that there could be an alternative if there were a ‘no’ vote in Eastie – though that alternative was never discussed in depth as they were planning for victory.

“The people were voting on a land use question, not on a specific project,” said Tuttle. “We’re very disappointed in the results in East Boston. I can think of three or four things we should have done better. Clearly, our 11th hour separation from Caesars didn’t help. We are trying to respect the vote in East Boston, which clearly killed the prior project. That project can’t move forward in East Boston. By the same token, we have a ‘yes’ in Revere by a wider margin than the loss in East Boston and a workforce here that deserves every opportunity from us.

“That may be frustrating to some; I get it,” he continued. “It was a possibility we were asked about on five or six occasions. Every time I tried to be consistent with that answer and I said that practically it would be very, very difficult to move ahead in one and not the other. Technically, I always said it was possible. We were planning for success. .”

Some Support, Some Don’t, Some on the Fence

Mayor Dan Rizzo said this week he is fully supporting the move to Revere and is in constant communication with Suffolk Down to help them meet the crucial Dec. 31 MGC application deadline.

“I am in constant communication with Suffolk Downs and our lawyers representing the City and their lawyers representing Suffolk Downs feel we do have a case in building a Revere-only casino,” he said. “As a result of that we have mutually agreed to open up the host community agreement to discuss new terms because with it all being in Revere…that would certainly mean a different set of terms with respect to jobs, local investments and a revenue stream.”

He said he has people in City Hall working on it already, and the City has advertised a public hearing this week for an omnibus zoning change to accommodate the Revere-only project. It will be held Dec. 2.

That said, not everyone in Revere’s corner is entirely happy with the course of events – including State Sen. Anthony Petruccelli, who has the unique task of representing both Revere and Eastie.

“While I have seen the media reports of Suffolk Downs seeking other development options, I do not believe there are any at this time,” said Petruccelli. “

House Speaker Bob DeLeo has said in initial reports that the whole plan sounds complicated. This week, though, he released a statement saying he’s putting it in the MGC’s hands.

“The future awarding of gaming licenses is entirely up to the Commission,” he said. “My deep concern, as always, lies with the creation and retention of jobs.”

In the Commission’s Hands

In the end, everyone agrees that the fate of the last-minute plan at Suffolk will depend upon the MGC.

MGC Chair Steve Crosby has only said so far that he will hear them out, though he has said in published reports that it sounds very difficult. He has also alluded that it would be a long shot.

However, in previous open meetings, such as a meeting on Oct. 29 addressing the Eastie/Revere referendum vote, Crosby alluded that a ‘no’ vote would put an end to the application.

“There will be another public hearing during the evaluation process if the vote is successful,” Crosby said at the hearing. “If it isn’t successful, it’s over. If it is successful there will be another public hearing where we will invite everybody to speak about the pending proposal.”

Said Tuttle, “In the end, all of this is in the Gaming Commission’s hands.”

Separation of Track and Casino

One of the persistent problems with the new plan is what to do with the horse track.

At one point, the casino was touted as being necessary to save the track. Now, it appears the track is going to have to be separated in some fashion to save the casino.

Just how that will happen is still up in the air.

Tuttle said there is a very good possibility that the track could close, or that it would operate as a separate entity with no common access points. He even said it could possibly be moved to another location. Under the current plan, the barns would certainly have to be moved. Tuttle said it certainly would be off-site, but they have no firm plans yet.

“Our plan was always for an integrated facility with racing and gaming,” he said. “That cannot happen now because of the vote. There has to be separation; there has to be church and state. They can’t be together. We hope to be able to keep the racetrack, but it can’t be part of our gaming development…We’re going to work to try to keep the track open, but the results of the vote in East Boston could make that hard. We don’t know yet (if we’ll close it)…We’ve got 350 people who work here and 400 to 500 in the barn areas and we’re trying to figure out how to preserve their jobs.”

One of two major roadblocks is the fact that the racetrack is considered an amenity to the development, and any amenity located in a city or town triggers the host community process. Eastie cannot be a host community. The track being an amenity worked in Revere’s favor early in the process and helped it be deemed a host community. However, now it appears to be getting in the way of the Revere-only development.

Tuttle said they had no clear answers as to how they would solve that.

“That’s something we’re working on right now,” he said.

Another roadblock lies within the gaming law – a stipulation that requires Suffolk to continue operating as a horse track in order to get a casino license.

“We need to find a way to continue racing, but not as part of the development,” he said. “We don’t necessarily have to race here. It says if you held a [racing] license in 2011 and are awarded a gaming license, you have to maintain that [racing] license. It doesn’t say where you have to race. We’re meeting with the (Horsemen) this week to discuss the new playing field.”

Staying With the Agreement and the Vote

There are more complications than can be reported in one story, but one thing that is on everyone’s mind is whether or not the Revere vote can stand given it’s wording and it’s mentioning of the current Host Community Agreement – which will be totally different.

Rizzo and Tuttle believe that the vote is still valid, even with a new project in a new area.

They argue that the vote was about a land use question and not about any specific project or design.

The wording of the question refers to the property at Suffolk Downs “off of Winthrop Avenue,” but doesn’t mention Revere or East Boston.

Critics argue that the question referred to the existing host community agreement – which included radically different commitments and also the continuation of horseracing.

They also point to the fact that the address and zip code for Suffolk Downs’s property is that of East Boston – not Revere.

Tuttle and Rizzo believe that they can negotiate an amended host community agreement without blowing up the one they have.

“We don’t think we have to have a new agreement,” Tuttle said. “Our HCA with Revere anticipates future development or expansion on the Revere side of the property…It anticipates that if and when there were expansion on the Revere property, we can open it up again. There should and will be substantially more in benefits for Revere under the new proposal. We think all that is possible under the current vote and our HCA.”

Neither would discuss what kinds of numbers were being talked about or whether the agreement would mimic Boston’s lucrative agreement.

Many Questions But a Willing Partner

Rizzo told the Journal this week that the City is doing whatever needs to be done to help Suffolk meet its critical deadline of Dec. 31.

“Obviously time is not our friend in this and we’re working hand in hand with Suffolk to make sure we meet all the deadlines required by the Gaming Commission,” he said.

Tuttle said they are ready to work with Revere if allowed by the state.

“It still has to be a first-class destination that attracts visitors from outside the area and is of a level of quality that is befitting of the cultural hub of the region,” he said. “We also need to engineer and design a project that works on the Revere parcel and that the City will welcome as a neighbor.”

Sidebar –

One Man in Two Communities

State Sen. Anthony Petruccelli has the unique position of being between two communities this week, as he represents Revere and East Boston – where a rift is growing over the 11th hour Revere-only casino bid. This week, he said in a statement that he doesn’t appreciate the divisiveness coming out of Suffolk Downs on the issue. The statement reads as follows:

“On Tuesday, Nov. 5, I joined many voters in East Boston and Revere in voting ‘yes’ on whether or not there should be a resort casino development at Suffolk Downs. I did so because I believe the benefits of such a development far outweigh the impacts. The rules of engagement for this process were crystal clear. Voters in both communities needed to pass their own ballot question in order for the proposal to advance to the Gaming Commission. That did not happen.

As you know, I represent both the neighborhood of East Boston and the City of Revere so this is not the most desirable position for me to be in politically. However, the results are unambiguous. The proposed resort casino at Suffolk Downs is dead.

While I have seen the media reports of Suffolk Downs seeking other development options, I do not believe there are any at this time. The most recent proposal had to my knowledge every inch of development to be built in East Boston, and Revere was still a host community. If you remember, a year ago there was a question as to whether or not Revere was a host community, I publicly advocated very strongly that Revere needed to be considered a host community. If somehow Suffolk Downs were allowed to offer a new development proposal, I would expect that both communities would again be host communities. What’s fair is fair.

Furthermore, I am troubled by the rhetoric offered by the ownership of Suffolk Downs during the last week, as they are pitting two communities that I represent and love very much against each other.

I will not stand for that.

I am hopeful that the Gaming Commission will see the logic and the facts of this proposal. That is, if Suffolk Downs has a new proposal, there needs to be a new process. Anything less would bring into question the integrity of the Massachusetts Gaming Law and the whole process.”

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Malden Deal Not Good Enough for Chelsea

Some $1 million per year for casino mitigation will not be enough for Chelsea, City Manager Jay Ash said this week in response to the Surrounding Community Agreement inked between Malden and Wynn Resorts last week.

“It’s less than what I’ve been negotiating for,” said Ash. “It’s good because now there is a number out there that a surrounding community has agreed to. I’ve not come close to reaching any agreements yet. I will continue to present the case for Chelsea as to why our needs are different than Malden’s needs. You have to remember that all of Chelsea is more proximate to either casino – Wynn or Suffolk Downs – than many parts of the actual host communities.

“The Malden deal is informative, but not one I’m prepared to sign at this point,” Ash continued.

The sentiment was pretty much the same among several elected officials, who were not at liberty to comment publicly due to ongoing negotiations.

“Definitely not enough for us,” said one councillor who chose to remain anonymous.

Ash has been in close negotiations with both Suffolk Downs and Wynn over the last several months, and it has been difficult as there was previously no pattern to follow – as few surrounding communities had entered the process with casino developers.

Now, Malden has done the trailblazing.

The deal for Malden includes an up-front payment from Wynn of $1 million for public safety, infrastructure and beautification if Wynn gets a license. Once the casino opens, Malden would get $1 million per year for continued public safety costs and infrastructure costs. That number will grow to $1.2 million by the sixth year of operation and will grow by a fixed 2.5 percent annually from there on out.

Additionally, Malden has secured a hiring preference for Malden residents that will be second only to Everett – the host community. There will also be a targeted “spend” by the casino with Malden businesses for up to $10 million annually.

“The voters in Everett have spoken in an unprecedented way of their support for this project, and we respect the right of any city to decide what is best for that city,” said Malden Mayor Gary Christenson. “I have said from the start of this process that it was vital for Malden to play an active role so that our concerns were heard. The Wynn executives reached out to us early and expressed their desire to be a good neighbor and help us address the issues important to Malden. Regardless of how one feels about gaming, we had an obligation to protect Malden’s interests and utilize the mechanisms available under the Massachusetts gaming laws to mitigate any resulting impacts. This Surrounding Community Agreement ensures that we are compensated so that the negative effects of the potential casino in a neighboring city are lessened.”

Oddly enough, while Malden borders Revere – a host community for Suffolk Downs – it has been shut out of the surrounding community agreement process by Suffolk, according to the City of Malden’s website.

Chelsea, however, has been deemed a surrounding community by both casino developers.

“The Suffolk Downs team has indicated to us that they do not consider Malden to be impacted by their potential casino development and as such will not be naming Malden as a surrounding community,” read a statement on Malden’s website. “Although we anticipate similar impacts to us from [Suffolk's] development, we will have to make our case to the Gaming Commission to receive any mitigation assistance.”

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With Ceasars Leaving Suffolk Downs Casino, City Offcials Are Still Comfortable with Project

The Massachusetts Gaming Commission (MGC) came to bury Caesars last Friday afternoon, not to praise them.

The entire casino effort at Suffolk Downs this week is in flux as the track searches for another gaming operator, Caesars Entertainment has limped out of town, rejected by MGC, and a vote on the overall casino plan will take place in less than two weeks in Revere and Eastie.

And, the deadline for the casino application process comes on Dec. 31.

In Chelsea, a City likely to be affected just as much as the host communities, officials are left scratching their heads and wondering what comes next.

“I was as surprised as anyone to learn that Caesar’s was no longer going to be part of the team at Suffolk Downs,” said City Manager Jay Ash. “I had done some work on understanding the Caesar’s operating model and looked at their efforts on job training, diversity and general operations, and was excited about the possibility of working with them if Suffolk Downs did get the license. I remain in contact with Suffolk Downs, I know the commitment Suffolk has made to proposing a world class operation, and, while losing Caesar’s is a cause for concern, I believe that they’ll partner with another quality casino operator shortly and be back before the Gaming Commission with a full team.

“I don’t think the Suffolk Downs application has been mortally wounded, but I don’t think Suffolk wanted to go out and find another casino partner this late in the game,” he continued. “From that perspective, the news of Caesar’s leaving is not good, but the fundamentals of the Suffolk Downs proposal haven’t changed.”

Caesars Entertainment has been on board as the team’s gaming operator (with a 4 percent ownership stake) since 2011, and track officials this week said they just learned of serious problems with Caesar’s this month from the MGC.

Last Friday, all of that came to a head when the MGC released to Suffolk Downs an overview of its background check report – a report that wasn’t favorable for Caesars.

“On Oct. 2  we were informed for the first time of questions about Caesars suitability by the Investigative Bureau of the Gaming Commission and immediately retained former Attorney General Tom Reilly to conduct an internal review,” read a statement from Suffolk Downs COO Chip Tuttle. “Based upon further information made available to us and within hours of receiving the Bureau’s recommendation, we asked Caesars on Oct. 18 to withdraw as Suffolk’s [gaming] manager.”

The MGC has been conducting background checks on all resort casino applicants since the beginning of September. A spokesperson said they had recently finished their report on Suffolk’s team and apprised them of the negative findings regarding Caesars.

“After an exhaustive investigation, the Massachusetts Gaming Commission’s Investigations and Enforcement Bureau (IEB) recently provided casino gaming applicant Sterling Suffolk LLC, with an overview and report of its findings,” read a statement from Elaine Driscoll of the MGC. “As is standard procedure after all background investigations, the Commission has scheduled a hearing to publicly review the facts established in the background investigation report. No suitability decisions will be made until after the adjudicatory hearing and the Commission’s deliberation on the IEB report. This hearing will be held on Oct. 29.”

The Issues

Driscoll said a redacted report of the Suffolk investigation was to become public late yesterday, Oct. 23.

Nevertheless, multiple sources close to the investigation said there were four key problems cited with Caesars.

First and foremost was the company’s large amount of debt, which has climbed to $22 billion as gaming revenues in the company have decreased in the last several months.

Second was an ongoing lawsuit between a customer who lost a great deal of money at a Caesars casino and refused to pay. When Caesars tried to collect the debt, the customer cited that employees gave him free drinks and watched him use drugs while he gambled. He argues they should have stopped him. Caesars wholly disputes his claims, but the suit is still ongoing.

Third was a questionable figure that works in the company’s internet gaming division.

None of those findings were particularly new, though they still did play a role.

However, another piece was new. That was a deal put together in Las Vegas by Caesars and other individuals in March to replace its ‘Bill’s Gamblin’ Hall and Saloon’ with a $185 million development carrying the Gansevoort Hotel brand.

MGC apparently found and believes that one of the investors in the project with Gansevoort, Arik Kislin, had ties to Russian organized crime.

Bloomberg News reported that the allegation came from filings against Kislin in a German court – filings that were reported in the New York newspapers last year.

Caesars did try to drop its affiliation with Gansevoort over the weekend, but it was apparently too late, and so they were asked to leave the Suffolk team.

Caesars officials have told numerous press agencies that they are stunned and don’t believe that any big casino operators will be able to make it through Massachusetts’s stringent process.

Tuttle said they are glad to see the stringent standards, and Suffolk expects to be approved on Oct. 29.

“The Commission has decided it is going to have very stringent standards and we’re good with that,” he said. “We want to live up to those tougher standards and we want to live up to that commitment. We had 89 qualifiers and 88 had no issues. We have full confidence Suffolk Downs as an entity will be found suitable. In many ways, we are getting to see the process work as it was intended to.”

He said Suffolk Downs is working with Caesars to absorb that company’s 4 percent stake in the operation, and that Suffolk Downs would retain that stake.

Operator, Operator

While many are saying the process worked much the way it is supposed to, the timing of the decision and the change is one of the most shocking pieces of news to hit the area around Suffolk Downs in some time.

With Caesars having a big name in the gaming world, and having been on the team for more than two years – residents, particularly those in Revere and Eastie who go to the polls in less than two weeks, are left scratching their heads. Many wonder what it means for the project; how they will vote for a casino on Nov. 5 if there is actually no casino operator.

Tuttle said the track is aggressively looking for another operator to partner with, and it has to get done soon. However, he also said it might not get done before the referendum.

“The clock is ticking,” Tuttle told the Record. “We would like to get a new operator by the end of the month. We want to get that in place ASAP. If it’s not practical to get it done in the next two weeks, we need to have it done soon after because our final application is due by Dec. 31.”

That deadline means that the new operator will likely not be one from outside of the current process – eliminating entities thrown around in conversation like Boston native Sheldon Adelson’s Las Vegas Sands company. Some 11 companies are already in the MGC’s vetting process and Tuttle said it would likely be one of those that they would partner with, as time is of the essence.

Any outside operator would have to start over at Phase 1, and there is probably no time for that. An operator already in the process, he said, could more easily switch over.

“Once you’re already through in Massachusetts, the background check and investigation are the same whether you are in Springfield, Worcester or Boston,” Tuttle said. “It would be hard to get outside [operators] though in time. It would be ideal, or easier, to get someone who is already in Massachusetts. As I said, the clock is running here.”

Many of those operators are already pursuing their own projects around the state and have a great deal invested in their own projects – meaning they likely wouldn’t dump what they’re doing to come to Boston.

Some have postulated that Steve Wynn could join the Suffolk effort and abandon Everett, but that seems unlikely at this time. Additionally, Wynn has yet to clear a background check and was called before the MGC last Thursday to speak about his foreign business practices.

A more realistic partner would be the Hard Rock Casino, whose project was rejected in West Springfield last month by voters. While they have been through the process in Massachusetts, they no longer have a project to pursue. Hard Rock also has an existing relationship with Suffolk owner Richard Fields through the Hard Rock Seminole Casino in Florida.

Regardless, Tuttle said they have a lot of interest, perhaps a dozen inquiries.

“There is considerable interest already,” he said. “This market is incredibly attractive to casino operators. The structure of the market is as strong this week as it was last week.”

Any operator will have to agree to the existing conditions of the Host Community Agreements in Revere and Eastie, and any tentative Surrounding Community Agreements with cites like Chelsea, as Caesars was a party at the table in those negotiations. Any operator would have to agree to what Caesars had already agreed to without any input of its own, which could make for a hard sell.

The Vote Goes On

Even if there isn’t a new casino operator chosen by the Nov. 5 vote, Revere and East Boston voters will go to the polls to vote for the casino question – basically deciding the issue on behalf of the residents of Chelsea, many who live within eyeshot of the proposed casino.

Chelsea residents have been watching the tenor of their neighboring cities for several months to get a feel for how the vote might go down, a vote that will affect Chelsea for decades.

So far, it doesn’t appear the shocking news about Caesars will change the vote – despite the fact that Caesars is mentioned in the Boston ballot question. It isn’t, however, mentioned in the Revere ballot question, but referred to in the Revere Host Community Agreement.

Tuttle said he doesn’t believe that would be an issue because the question deals with land use – whether or not a casino should be allowed.

“The vote is about permitting the location of a gaming operation,” he said. “You’re not voting on Coke versus Pepsi or Marriott versus Hyatt. They’re voting on whether or not they want a gaming facility sited here. It’s always been Suffolk Downs, the owner of 78 years, that’s been asking for that and that hasn’t changed.”

Not everyone, though, felt the situation was so seamless.

Revere City Councillor Brian Arrigo submitted a piercing op-ed this week about the turn of events, and said voters deserved better than a hurried  decision without any input.

“If Suffolk Downs manages to find another world-class operator to replace Caesars before the election Nov. 5, it will be a hurried decision that will lack any transparency or community input,” he wrote. “On the other hand, if Suffolk Downs does not manage to find another world-class operation to run the casino, voters will be asked to just trust Suffolk Downs and cast a blind vote. Either way, the residents of Revere deserve much better.”

What They’re Saying

The range of opinions on the abrupt swerve in the casino discussion has ranged from cavalier to catastrophic.

Revere Mayor Dan Rizzo said he remains confident in the casino application that Suffolk Downs has, and he doesn’t believe this is as big a deal as most are making it.

“Caesar’s departure is a blip on the screen as it relates to the overall project,” he said in a statement. “Terms of the Host Community Agreement stay in place as does the architectural design for the casino itself. They will merely need to work with another casino operator.”

Meanwhile, Charlie Lightbody – who is running a local ‘No Casino’ effort in Revere – said it was too risky to vote for an unknown.

“It’s like being on a plane in mid-air with no pilot or co-pilot,” he said. “Eventually you will crash and burn.”

Revere City Council President Ira Novoselsky said it wasn’t a deal breaker for him.

“It’s like a condo association that hires a property manager,” he said. “They’ve changed property managers, but the owners are all still the same. It’s not stopping me. I met with about 25 people on Standish Road and most of them haven’t changed their positive opinions of the proposal, and they live right next to it.”

Said former Revere mayor and current Revere City Councillor Bob Haas, “Some are saying it’s no big deal, but I think it is a big thing when a major operator leaves the project in the last two months. No question about it; people are concerned in Revere across the board.”

Arrigo said in a statement that it is a devastating blow.

“The news that Caesars, the ‘world-class’ managing partner hand-picked by Suffolk Downs two years ago to run its resort casino operation, will not be part of a Revere resort casino is undeniably a devastating blow to Suffolk Downs’ credibility and should be a major red flag for any Revere resident,” he wrote. “Anyone who says otherwise is not putting Revere residents first.”

Finally, Tuttle said they have seen tremendous support from the two communities since the announcement.

“The timing certainly presents challenges and we’ve acknowledged that, but it is – in some ways – refreshing in terms of the support we’ve seen since we announced this,” he said. “Many people I’ve talked to, if they thought it was a good idea last week, they still think that. I haven’t found the person yet who has said they’ve changed their mind because of this.”

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Vornado Bows out of Casino

Vornado Bows out of Casino

One of the major investors in Suffolk Downs has pulled out of the partnership and will consolidate its efforts in its core business – that being commercial real estate in New York City and the eastern seaboard.

Vornado Realty Trust had a nearly 20 percent stake in Suffolk Downs for the last several years and has been a key investor during the track’s most recent pursuit of a resort casino license.

The news was revealed through the Mass Gaming Commission (MGC) last week that Vornado was pulling out when the matter came up during an MGC regular meeting.

In a letter to commissioners and during the March 28th meeting, MGC General Counsel Catherine Blue explained that 11 of 14 Vornado principals did not agree to participate in the Phase I MGC background check. They were advised to divest of their interest in Suffolk, which they agreed to do.

“Originally 14 individuals associated with Vornado were identified by the (Commission) as qualifiers for purposes of the applicant’s suitability investigation,” read the letter. “Of those original 14 individuals, one was allowed to withdraw as a qualifier and two individuals filed the required disclosure forms…The remaining 11 individuals refused to file required disclosure forms…The applicant’s representatives came to meet with (the Commission) to determine how they could proceed in the process and have the application deemed complete.”

In order to keep Suffolk in the process during the time it takes for Vornado to bow out, the Commission agreed to allow the track to put Vornado’s interest into a blind trust controlled by Trustee Attorney Steve Kidder of Hemenway & Barnes.

Kidder had to agree to be subjected to the MGC’s background check, and any new entity that potentially comes on board to replace Vornado in the Suffolk partnership would have to submit to the same background check.

In essence, as pointed out by Commissioners last Thursday, the move is simply a bridge to allow Suffolk’s application to continue in the process while Vornado officially folds its cards.

“Vornado has decided to focus on its core real estate development practice and has decided to divest its 19 percent interest in Suffolk Downs that it acquired in 2005,” said Suffolk COO Chip Tuttle. “The partnership has worked with the Gaming Commission to update our list of qualifiers and work towards the opportunity to earn a gaming license in Massachusetts. We are confident in our ability to design, finance, develop and operate a world-class Caesars Resort at Suffolk Downs that will be an economic engine for the creation of jobs and tourism in our Commonwealth. This change to our list of qualifiers will have no impact on our application for a gaming license.”

A spokesman for Vornado in New York told this newspaper that the company preferred not to make comment on its exit from Suffolk.

While many scrambled to understand what Vornado’s exit might mean, a little context from the company’s last few months would likely explain the sudden departure.

Just last month, Vornado’s Chairman and founder Steve Roth announced that he was selling a large stake of the company’s stock holdings in the JC Penny department store company. In fact, all told, the company lost in excess of $250 million on the sale. They had become a stockholder a few years ago and brought in a new CEO from Apple to revamp the chain store. However, the bet didn’t seem to pay off, and Vornado paid dearly for it.

Just prior to that, Vornado CEO Michael Fascitelli announced that he would be stepping down and that Roth would assume his responsibilities for the time being. Also, during that time, the company lowballed a settlement on a long-term lawsuit over disputed rent payments from a New York Stop & Shop location.

All that happened in the context of stockholders and some within the company calling for Vornado to move back to its bread and butter – that being commercial real estate in New York City.

On the surface and to a person, it appears that would seem like what Vornado is doing in its sudden and unexpected parting from the Suffolk casino project.

Sidebar – Familiars names, financial newsmakers dot casino applications

Investors and company members – known as “qualifiers” for the purpose of state gaming background checks – of the casino proposals in Everett and Revere/Eastie read like the pages of a daily financial newspaper.

There are no shortage of big names and familiar names in the list of “qualifiers” that the Mass Gaming Commission (MGC) is now examining with a fine-toothed comb.

The MGC recently provided this newspaper with the names, companies and stakeholders for each and every application. Some of the names included:

•Former Pittsburgh Steeler Hall Of Fame Wide Receiver Lynn C. Swann – who is a member of the Board of Caesar’s Entertainment and part of the Suffolk application. He also, until recently, had a major stake in the Heinz ketchup company.

•Robert J. Miller is a Board member for Wynn Entertainment and the former governor of the country’s hotbed of gaming, Nevada. Miller was governor from 1989 to 1999 and enjoyed great popularity. His son is still a state official in Nevada.

•Jeffrey Housenbold is the CEO of the popular internet photo-sharing service, Shutterfly, and is a Board member of Caesar’s – thus on the Suffolk application. Prior to Shutterfly, he was an executive at eBay.

•Matt Maddox is the Chief Financial Officer at Wynn and one of the highest paid executives under the age of 40 – he’s 37. Maddox is believed to be the next COO of the company after the retirement of long-time COO Michael Schorr last week. Ironically, Maddox was once an executive at Caesar’s, serving as executive vice president of finance.

•John Strzemp is not only an executive vice president at Wynn, but he’s also an accomplished World Series of Poker tournament player. When he’s not administrating casinos, he’s trying his hand at competitive poker.

•Dr. Ray Irani is a Board member for Wynn and was the successor to world-famous Occidental Petroleum CEO Armand Hammer. Irani is still associated with Occidental, and is currently said to be embroiled in a bid to recapture the CEO position, after having stepped down a few years ago due to compensation questions.

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