Opinion ID: 805657
Heading Depth: 2
Heading Rank: 1

Heading: The Massachusetts Gaming Act

Text: The Massachusetts Gaming Act was enacted on November 22, 2011. The Act establishes a Massachusetts gaming commission (the Commission), which consists of five commissioners, defendants here. Mass. Gen. Laws ch. 23K, § 3(a). The Commission is the principal entity charged with implementing the provisions of the Act, including the licensing scheme at issue. The Act authorizes gaming through the Commission's issuance of Category 1 and Category 2 licenses. A category 2 license, not at issue here, allows the licensee to operate a gaming establishment with no table games and not more than 1,250 slot machines. Id. § 2. A category 1 license permits the licensee to operate a gaming establishment with table games and slot machines. Id. As to category 1 licenses, the Act creates three regions, regions A, B, and C, corresponding to counties; region A covers the Boston area, B the western portion of the state, and C the southeastern portion of the state. See id. § 19(a). The Commission may issue not more than 3 category 1 licenses based on the applications and bids submitted to the commission. Not more than 1 license shall be awarded per region. Id. -3- While the statute states that [n]ot more than 1 license shall be awarded per region, the statute appears to contemplate that three category 1 licenses will be awarded in total. The statute specifies the circumstances where a category 1 license is not to be awarded in a region: if the commission is not convinced that there is an applicant that has both met the eligibility criteria and provided convincing evidence that the applicant will provide value to the region in which the gaming establishment is proposed to be located and to the commonwealth, no gaming license shall be awarded in that region.1 Id. This case concerns certain special provisions for category 1 licenses in the southeast region only, which is where the state's only federally recognized Indian tribes are located. We describe the statewide procedures before turning to the special procedures which treat the southeast differently.
The Commission's solicitation of applications for category 1 licenses is a key initial step in the category 1 licensing process. The Act does not set a deadline by which the 1 The Chairman of the Commission has stated that the legislation was passed on an underlying economic assumption that [t]he market can handle three casinos. Arsenault, Studies Back 4 Gaming Sites, Bos. Globe, June 15, 2012, at B1. The Commission recently held a forum to evaluate whether the state can in fact support three category 1 casinos, at which the Chairman stated that the economic assumptions that were the underpinnings of the law still hold. Id. -4- Commission must solicit applications for category 1 licenses, nor does the Act establish any timeframe for such solicitation. Rather, the Act provides that [t]he commission shall issue a request for applications for category 1 and category 2 licenses; provided, however, that the commission shall first issue a request for applications for the category 2 licenses. Id. § 8(a). The Commission is required to set deadlines for the receipt of all such applications, id. § 8(c), and to prescribe the form of the application, which must require certain detailed information about the entity requesting a license and its proposal, id. § 9(a). Once the application is reviewed,2 the Commission is to identify which communities shall be designated as the surrounding communities of a proposed gaming establishment. Id. § 17(a). The applicant must reach an agreement with the surrounding communities setting forth the conditions to have a gaming establishment located in proximity to the surrounding communities, id. § 15(9), before the application process may continue, id. § 17(a). The Commission is then to hold a public hearing within the host community of the gaming site. Id. § 17(c). 2 Upon receiving the application, the Commission is to take a variety of steps in reviewing the application and make a variety of assessments as to an applicant's qualifications, according to requirements enumerated in the statute, which we need not outline here. See Mass. Gen. Laws ch. 23K, §§ 12(a), 12(c), 13(a), 15-16, 18. -5- Between thirty and ninety days after the hearing, the Commission is to take action on the application: it must either grant a license, deny a license, or extend the period for issuing a decision by up to thirty days. Id. § 17(e). Licenses shall only be issued to applicants who are qualified under the criteria set forth in [the Act], as determined by the commission. Id. § 19(a). As said, the Commission may under certain conditions determine that no gaming license shall be awarded in that region. Id. Moreover, the Commission has full discretion as to whether to issue a license. Id. § 17(g). The Act provides that the Commission's decision as to whether to issue a license is not reviewable: Applicants shall have no legal right or privilege to a gaming license and shall not be entitled to any further review if denied by the commission. Id. A license is to be valid for an initial fifteen-year period. Id. § 19(b). Further, if a license is granted no other gaming license shall be issued by the commission in any region during that 15-year period. Id. The Commission is to establish license renewal procedures. Id. Licenses may not be transferred without majority approval of the Commission. Id. § 19(c).
Section 91, which is not codified in Chapter 23K, forms the basis of KG's primary challenge. 2011 Mass. Acts ch. 194, § 91. Section 91(a) provides that [n]otwithstanding any general -6- or special law or rule or regulation to the contrary, the governor may enter into a compact with a federally recognized Indian tribe in the commonwealth. Id. § 91(a). The Commission is, upon request of the Governor, to assist in negotiating the compact. Id. § 91(b). The Governor may only enter into negotiations under this section with a tribe that has purchased, or entered into an agreement to purchase, a parcel of land for the proposed tribal gaming development and scheduled a vote in the host communities for approval of the proposed tribal gaming development. Id. § 91(c). If a compact is negotiated, it must be submitted to the general court for approval. Id. § 91(d). We divide subsection (e), on which KG's equal protection challenge focuses, into its two component clauses, which provide: Notwithstanding any general or special law or rule or regulation to the contrary, if a mutually agreed-upon compact has not been negotiated by the governor and Indian tribe or if such compact has not been approved by the general court before July 31, 2012, the commission shall issue a request for applications for a category 1 license in Region C pursuant to chapter 23K of the General Laws not later than October 31, 2012; provided, however, that if, at any time on or after August 1, 2012, the commission determines that the tribe will not have land taken into trust by the United States Secretary of the Interior, the commission shall consider bids for a category 1 license in Region C under said chapter 23K. Id. § 91(e). It appears that all aspects of the state-law components of the first clause have, as of the date of this -7- opinion, been complied with. These statutory procedures have been supplemented by the terms of the state-law compact entered into by the Governor and the Mashpee Wampanoag, as described later. The statute does not, by its literal terms, preclude issuance of a category 1 license in Region C if a compact has been approved. However, KG argued before the district court and on appeal that the statute does bar issuance of a license if a compact is approved by the legislature by July 31 and the Commission has not then determined that the tribe will not have land taken into trust. The defendants do not dispute that interpretation of the statute. Moreover, the approved compact provides: Section 91 of the Act provides that if a compact negotiated by the Governor is approved by the General Court by July 31, 2012, the [Commission] will not issue a request for Category 1 License applications in Region C unless and until it determines that the Tribe will not have land taken into trust for it by the United States Secretary of the Interior. Mashpee Tribal-State Compact § 2.6.3 The compact repeatedly refers to the tribe's exclusive rights to conduct gaming in Region C if the compact receives legislative approval by July 31, 2012.4 See 3 See H. 4260, 187th Gen. Court (Mass. 2012) (tribal-state compact as submitted by the Governor to the Massachusetts legislature). 4 The compact also contains a section governing what would happen [i]f the Tribe's exclusive right to operate a casino within Region C is abrogated by the lawful issuance of a Category 1 License to operate a casino in Region C. Mashpee Tribal-State -8- id. § 2.8 (noting that approval of the compact by the Massachusetts legislature by July 31, 2012 will provide exclusivity in Region C for the Tribe); id. § 9.1.4 (stating that if a compact is approved by the legislature by July 31, 2012, the Tribe would have the opportunity to operate a casino in Region C on an exclusive basis); id. § 9.1.5 (stating that [p]roviding such exclusivity would also further the Commonwealth's policy of controlling the expansion of Gaming within Massachusetts, by limiting the total number of casinos within the Commonwealth to three); id. § 9.2 (referring to the creation, on an exclusive basis, of the opportunity to conduct casino gaming in Region C).
The Massachusetts Gaming Act also contains several other provisions relating to Indian gaming. The Act appropriates $5 million for use in negotiating and executing a compact with a federally recognized Indian tribe in the commonwealth to establish a tribal casino in region C. 2011 Mass. Acts ch. 194, § 2A. The Commission is empowered to provide assistance to the governor in negotiating a compact with a federally-recognized Indian tribe in the commonwealth. Mass. Gen. Laws ch. 23K, § 4(40). The Commission is required to: Compact § 9.2.4. This provision allows the tribe to elect to either: (a) cease operations of its casino within sixty (60) days, or (b) continue under this Compact but reduce the Allocation [to the Commonwealth] to fifteen percent (15%) of Gross Gaming Revenues. Id. -9- continue to evaluate the status of Indian tribes in the commonwealth including, without limitation, gaining federal recognition or taking land into trust for tribal economic development. The commission shall evaluate and make a recommendation to the governor and the chairs of the joint committee on economic development and emerging technologies as to whether it would be in the best interest of the commonwealth to enter into any negotiations with those tribes for the purpose of establishing Class III gaming on tribal land. Id. § 67. The Act creates a thirteen member gaming policy advisory committee, and requires one of the governor's eight appointees to the committee to be a representative of a federally recognized Indian tribe in the commonwealth. Id. § 68(a). The committee must meet at least once a year to make advisory recommendations to the Commission. Id. The Act expressly provides that the committee's recommendations shall not be binding on the commission. Id.