What the Commonwealth’s “Newest” Industry Can Learn from Gaming

At a recent meeting of the Massachusetts Gaming Commission, Chairman Stephen Crosby instructed staff to reach out to Treasurer Deb Goldberg, who is tasked with creating the entire regulatory infrastructure for the Commonwealth’s nascent recreational marijuana industry.  Chairman Crosby figured the Gaming Commission could provide insight as the regulator of the Commonwealth’s last “newest” industry.  Forgive me, but I hope the Treasurer does not take the call.  Gaming is not the example the Treasurer should follow.

The Legislature enacted the Expanded Gaming Act on November 22, 2011.  More than five years later, just one of the three casinos licensed by the Gaming Commission is open, while the others have just broken ground.  In one sense, the Gaming Commission over-regulated the industry by creating a thousand-page, two-phased license application with more than a dozen outside consultants tasked with review.  In another sense, the Gaming Commission under-regulated the industry – the complexity and disorganization of the license application procedures led to a series of miscalculations and improvisation along the way.  For instance, the Gaming Commission supported its selection of Plainridge Park to receive the Commonwealth’s lone slots license, on the basis of the Commission’s projection of $300 million in annual gaming revenue.  Plainridge Park generated $160 million in gaming revenue in its first year.  MGM’s proposal in Springfield was selected in no small measure due to its ambitious architectural design, which was nonetheless downsized after licensure without objection from the Gaming Commission. And here in Boston, although the Commission selected an operator, Wynn Resorts, with a track record of success, the site’s location at the beating heart of Charlestown’s traffic misery, caused a groundswell of opposition, including lawsuits and permitting delays.  Moreover, the Gaming Commission did not cloak itself in rectitude, finding itself in the center of an embarrassing controversy and federal criminal trial over allegedly hidden ownership interests in the Wynn casino site.  The chairman, himself, was caught up in the ethics imbroglio.

The hard lessons from the Commonwealth’s gaming experience are plenty for the Cannabis Control Commission:

  • The recreational marijuana licensure process should be simple, while at the same time surgically focused on what truly matters: the suitability and capitalization of licensees;
  • Selection criteria must be uniform, objective, and designed with fairness and prevention of bias in mind;
  • The Cannabis Control Commission should be staffed with regulators of strong credentials and standards of ethics for its members and staff should be enforced;
  • Location matters and navigating a regulatory line that reflects sensitivity to legitimate local concerns, while preventing rank NIMBYism will be the hardest course to chart.

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