COMMONWEALTH OF MASSACHUSETTS

Supreme Judicial Court

FOR THE COMMONWEALTH OF MASSACHUSETTS No. SJC-11641 _____________________________ STEVEN P. ABDOW, STEPHANIE C. CRIMMINS, JOSEPH A. CURTATONE, GERI EDDINS, MARK A. GOTTLIEB, CELESTE B. MEYERS, KRISTIAN M. MINEAU, KATHLEEN CONLEY NORBUT, JOHN F. RIBEIRO, and SUSAN C. TUCKER, Plaintiffs/Appellants, v. GEORGE DUCHARME, ET AL., DANIEL RIZZO, ET AL., and DOMENIC J. SARNO, ET AL., Interveners/Appellants, v. ATTORNEY GENERAL and SECRETARY OF THE COMMONWEALTH, Defendants/Appellees. ________________________________________ BRIEF OF PLAINTIFFS/APPELLANTS ________________________________________

H. Reed Witherby, BBO #531600 SMITH DUGGAN BUELL & RUFO LLP Three Center PlazaSte. 800 Boston, Massachusetts 02108 (617) 228-4400 rwitherby@smithduggan.com Dated: March 21, 2014

Thomas O. Bean, BBO #548072 VERRILL DANA, LLP One Boston PlaceSte. 1600 Boston, Massachusetts 02108 (617) 309-2600 tbean@verrilldana.com

TABLE OF CONTENTS Page TABLE OF AUTHORITIES................................iii QUESTION PRESENTED....................................1 STATEMENT OF THE CASE.................................1 Procedural History...............................1 Statement of Facts...............................3 SUMMARY OF ARGUMENT..................................11 STANDARD OF REVIEW...................................14 ARGUMENT.............................................16 I. THE ATTORNEY GENERALS ARGUMENT WILL BE MOOT BEFORE THE LAW PROPOSED BY THE PETITION TAKES EFFECT......................16 THE LEGISLATURE LACKED AUTHORITY TO AUTHORIZE, AND THE GAMING LAW DID NOT AUTHORIZE, THE MGC TO ENTER INTO AN IMPLIED CONTRACT THAT WOULD LIMIT OR PREVENT THE COMMONWEALTH FROM EXERCISING ITS CORE POLICE AND REGULATORY POWERS..........................17 A. The Right to Limit Gambling Lies Within the Commonwealths Core Police and Regulatory Powers, and May Not be Contracted Away............18 Even if the Legislature Were Permitted To Contract Away its Core Police Powers, The Gaming Law Does Not Clearly Evince the Legislatures Intent To Do So.........25

II.

B.

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Page III. EVEN IF THERE IS AN IMPLIED CONTRACT BETWEEN THE MGC AND APPLICANTS, THE PROPOSED LAW WOULD NOT CAUSE AN IMPAIRMENT THEREOF.........................33 A. The MGC Would Not Breach Any Implied Contract by Complying with the Law Proposed by the Petition......34 If the MGCs Application of the Proposed Law Did Constitute a Breach of an Implied Contract, the Applicants Would Have a Claim for Damages...............................36

B.

IV.

THE PROPOSED LAW WILL NOT RESULT IN A TAKING OF PRIVATE PROPERTY OF GAMING LICENSE APPLICANTS.........................39 A. Applicants Have No Compensable Property Interest In the MGCs Consideration Of and Action Upon Their Applications....................41 Even If There Were A Private Property Interest In The Commissions Consideration Of And Action Upon An Application, The Proposed Law Would Not Result In A Compensable Taking....................45

B.

CONCLUSION...........................................50 PROOF OF SERVICE.....................................52 CERTIFICATE OF COMPLIANCE............................53

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TABLE OF AUTHORITIES Page

State Cases American Mfrs. Mut. Ins. Co. v. Commissioner of Ins., 374 Mass. 181 (1978)............................48 Associated Industries of Mass. v. Attorney General, 418 Mass. 279 (1994)........................15, 16 Boston Elevated Ry. v. Com., 310 Mass. 528 (1942)................21, 22, 24, 26 Boston Medical Center Corp. v. Secy of the Exec. Office of Health and Human Services, 463 Mass. 447 (2012)....................12, 26, 29 Boston v. Back Bay Cultural Assn., Inc., 418 Mass. 175 (1994)............................26 Bowe v. Secretary of the Com., 320 Mass. 230 (1946)............................39 Bradford & Bigelow, Inc. v. Com., 24 Mass.App.Ct. 349 (1987)......................30 Carney v. Attorney General (Carney I), 447 Mass. 218 (2006)........................20, 22 Carney v. Attorney General (Carney II), 451 Mass. 803 (2008) .......................passim Cataldo Ambulance Service, Inc. v. Chelsea, 43 Mass.App.Ct. 26 (1997).......................33 Chase Precast Corp. v. John J. Paonessa Co., Inc., 409 Mass. 371 (1991)............................36 Chase v. Proprietors of Revere House, 232 Mass. 88 (1919).........................19, 22

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Page City of Salem v. Maynes, 123 Mass. 372 (1877)............................35 Com. v. Perella, 464 Mass. 274 (2013)............................28 Com. v. Wolbarst, 319 Mass. 291 (1946)........................19, 22 Community Builders, Inc. v. Indian Motorcycle Associates, Inc., 44 Mass.App.Ct. 537 (1998)......................37 Dimino v. Secretary of Com., 427 Mass. 704 (1998)............................22 Fort Point Commercial Co., Inc. v. Spiegel, 28 Mass.L.Rptr. 339, 2011 WL 1758950, (Mass. Super. 2011).............................37 Hollstein v. Contributory Retirement Appeal Bd., 47 Mass.App.Ct. 109 (1999)......................31 Horton v. Attorney General, 269 Mass. 503 (1930)............................39 Interstate Engineering Corp. v. Fitchburg, 367 Mass. 751 (1975)............................30 Leonard v. Brimfield, 423 Mass. 152 (1996)....................45, 48, 50 Massachusetts Soc. for Prevention of Cruelty to Animals v. Commissioner of Public Health, 339 Mass. 216 (1959)............................25 Mazzone v. Attorney General, 432 Mass. 515 (2000)............................14 Mello Const., Inc. v. Division of Capital Asset Management, 84 Mass.App.Ct. 625 (2013), rev. denied, 467 Mass. 1103 (2014)...........................32 -iv-

Page Opinion of the Justices to the Senate and House of Representatives, 341 Mass. 760 (1960)....................21, 22, 24 Opinion of the Justices to the Senate, 375 Mass. 795 (1978)............................20 Opinion of the Justices, 261 Mass. 523 (1927)........................18, 27 Opinion of the Justices, 356 Mass. 775(1969).........................19, 22 Opinions of the Justices, 293 Mass. 589 (1935)............................22 Paisner v. Attorney General, 390 Mass. 593 (1983)............................20 Paquette v. Fall River, 338 Mass. 368 (1959)............................18 Paul Sardella Const. Co., Inc. v. Braintree Housing Authority, 3 Mass.App.Ct. 326 (1975), affd, 371 Mass. 235 (1976)....................30, 31, 32 Phipps Products Corp. v. Massachusetts Bay Transp. Authority, 387 Mass. 687 (1982)............................33 Salamon v. Terra, 394 Mass. 857 (1985)............................37 Selectmen of Topsfield v. State Racing Commn, 324 Mass. 309 (1949)........................passim Spector v. Building Inspector of Milton, 250 Mass. 63 (1924).............................34 Town of Milton v. Com., 416 Mass. 471 (1993)....................26, 27, 31

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Page Yankee Atomic Elec. Co. v. Secretary of the Com. (Yankee I), 402 Mass. 750 (1988)............................16 Yankee Atomic Elec. Co. v. Secretary of the Commonwealth (Yankee II), 403 Mass. 203 (1988)............14, 15, 16, 17, 46 Federal Cases American Auto. Mfrs. Assn v. Massachusetts Dept. of Envtl. Protection, 163 F.3d 74 (1st Cir. 1998).....................24 American Pelagic Fishing Co., L.P. v. U.S., 379 F.3d 1363 (Fed. Cir. 2004)..............41, 45 Atlantic Coast Line R. Co. v. Goldsboro, 232 U.S. 548 (1914).............................21 Bowen v. Public Agencies Opposed to Social Sec. Entrapment, 477 U.S. 41 (1986)..............................44 Connolly v. Pension Ben. Guar. Corp., 475 U.S. 211 (1986).............................46 Conti v. U.S., 48 Fed. Cl. 532 (Ct. Cl. 2001) affd, 291 F.3d 1334....................41, 43, 45 Folden v. U.S., 56 Fed. Cl. 43 (2003), affd, 379 F.3d 1344 (Fed. Cir. 2004), cert. denied, 545 U.S. 1127 (2005)....................... 43, 49 Hawkeye Commodity Promotions, Inc. v. Vilsack, 486 F.3d 430 (8th Cir. 2007)....................46 Hendler v. U.S., 952 F.2d 1364 (Fed. Cir. 1991)..................44

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Page Holliday Amusement Co. of Charleston, Inc. v. South Carolina, 493 F.3d 404 (4th Cir. 2007)................46, 48 Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)............................46 Maritrans Inc. v. U.S., 342 F.3d 1344 (Fed. Cir. 2003)..............41, 45 Mass. Eye and Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47 (1st Cir. 2009).....................37 Mitchell Arms, Inc. v. U.S., 7 F.3d 212 (Fed. Cir. 1993).....................44 Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978).................14, 40, 46, 50 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922).............................45 Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984).............................48 Stone v. Mississippi, 101 U.S. 814 (1879).........................23, 24 Tyler v. Michaels Stores, Inc., 840 F.Supp.2d 451 (D. Mass. 2012)...............37 U.S. Trust of New York v. New Jersey, 431 U.S. 1 (1977).......................22, 24, 39 U.S. v. General Motors Corp., 323 U.S. 377 (1945).............................43 U.S. v. Winstar Corp., 518 U.S. 839 (1996).............................24 Unity Real Estate Co. v. Hudson, 178 F.3d 649 (3rd Cir. 1999)....................46 -vii-

Page Massachusetts Constitution Massachusetts Constitution, Amend. Art. 48............................. passim Statutes Federal Indian Gaming Regulatory Act 25 U.S.C. 2701 et seq..........................9 State G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 23K, G.L. c. 149, G.L. c. 149, St. 2008, c. St. 2011, c. St. 2011, c. 3(l)..................................32 10(a) and (d)........................47 11(a) and (b)........................47 12................................38, 44 13....................................44 15 (8), (9), (13).....................29 15(11)................................47 17(g).................29, 32, 33, 41, 42 18....................................32 19-20.............................4, 41 30(e).................................32 61(b).................................32 71....................................34 44A(2) ...............................32 44D..................................32 388.....................................20 194, 91................................4 194, 97...............................28

Massachusetts Regulations 205 C.M.R. Parts 111-117.............................47 205 C.M.R. 121.01(1) and (2).........................47

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QUESTION PRESENTED Whether the Attorney General erred in refusing to certify an Initiative Petition entitled An Act Relative to Illegal Gaming (the Petition) for inclusion on the State election ballot in November, 2014, on the ground that the Petition is inconsistent with the right of applicants for gaming licenses to receive compensation for private property appropriated to public use. STATEMENT OF THE CASE Procedural History Plaintiffs filed the Petition with the Attorney General on or before the first Wednesday in August of 2013, pursuant to amendment Art. 48 of the Massachusetts Constitution. Record Appendix (R.A. ___) 40, 9. The Petition proposed a law that would redefine illegal gaming and prohibit the conduct or licensing of all such illegal gaming after the law took effect. Id. 152. On September 4, 2013, the Attorney General declined to certify the Petition as complying with Art. 48 on the ground that the law it proposed would take an asserted right based on an implied contract between the Massachusetts Gaming Commission and gaming license applicants of gaming license

applicants to consideration of and action upon their applications. R.A. 40, 10, and 155-165.1 Plaintiffs promptly filed this action to challenge the Attorney Generals decision. R.A. 8-12 and 40, 11. On September 13, 2013, the parties agreed to, and the County Court entered, a preliminary order requiring that the Attorney General release a summary of [the Petition] to the Secretary [of State], and that the Secretary . . . and take all other steps he would have been required to take under amendment Article 48 had the petition been certified, short of printing the proposed law in the Information for Voters Guide or on the ballot. R.A. 14. The Plaintiffs then obtained and filed sufficient voters signatures required by Art. 48. R.A. 41, 12 and 173-74. On or before January 9, 2014, the Secretary transmitted the Petition to the Clerk of the House of Representatives. Id. 41, 13. As of February 14, 2014, the Legislature had not enacted the law proposed by the Petition. Id.

The Attorney General properly concluded that the proposed law would not result in a taking of property rights in licenses issued under the Gaming Law: to be sure, applicants for gaming licenses will have no property rights in any licenses they may receive at the end of the application process. R.A. 164.

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The County Court allowed motions to intervene by George Ducharme and certain other Massachusetts voters,2 and by certain voters in each of the cities of Revere and Springfield, and reserved and reported the case without decision to the Full Court. R.A. 5-6, Dkt. Nos. 7 and 29, and R.A. 747-48. The Secretary needs to know by July 9, 2014, whether the law proposed by the Petition should appear on the November 2014 state election ballot, to include it in the ballot materials. Id. at 65, 59. Statement of Facts The Gaming Law Chapter 194 of the Acts of 2011 (the Gaming Law) enacted, among other things, G.L. c. 23K that created a Massachusetts Gaming Commission (MGC or the Commission). See St. 2011, c. 194. The Gaming Law transferred all licensing and regulation of the Massachusetts racing industry from the State Racing Commission to the MGC, and authorized certain forms of gambling previously illegal in the Commonwealth, all to be heavily regulated by the MGC pursuant to the comprehensive statutory scheme detailed in the statute. Id.

Five corporate gaming applicants also sought intervener status in the Ducharme motion but then waived their requests. See R.A. 5, Dkt. No. 16.

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The Gaming Law vested the MGC with broad discretion to license up to four commercial gaming establishments: one in each of three regions (Region A eastern Mass., Region B western Mass. and Region C southeastern Mass.) that could offer slot machine gambling and table games (a Casino or Category 1 License) in a consenting host community, and one anywhere in the State that could offer slot machine gambling but no table games (Slots Parlor or Category 2 License). G.L. c.23K, 1920. The Gaming Law also authorized the Governor to enter into a Compact with a federally recognized Indian tribe in the Commonwealth to conduct casinostyle gaming in Region C. St. 2011, c. 194, 91. Proposed Referendum Repeal of the Gaming Law On November 30, 2011, at least ten qualified voters of the Commonwealth, including some of the plaintiffs herein, timely filed a referendum petition under Art. 48 seeking to repeal the Gaming Law. R.A. 38, 4. On December 7, 2011, the Attorney General opined to the Secretary that the Gaming Law could not be the subject of an Art. 48 referendum because the Gaming Law appropriates money. Id. at 39, 5 and 102-110. The media reported on both the filing of the petition and the Attorney Generals decision. R.A. 38-

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39 and 73-100. While the referendum petitioners did not challenge that decision in court, John Ribeiro, Chairman of the Repeal the Casino Deal Committee, promised in a statement quoted in the Boston Herald, the Quincy Patriot Ledger, and the Brockton Enterprise on or about December 19, 2011, that the Committee would take [the issue] up as an initiative [petition] at the 2014 ballot. R.A. 39, 6 and 144-49. The License Application Process In October 2012, the MGC established a two-step process to receive and evaluate applications for gaming licenses: (1) an initial Phase 1 Application (RFA-1) to focus on each applicants qualifications and suitability, in advance of (2) a site specific Phase 2 Application (RFA-2) from applicants found qualified and suitable in Phase 1. R.A. 41, 15. The MGC set January 15, 2013, as the deadline for all Phase 1 applications for Region A and B Casino licenses, and the Slots Parlor license. Id. On that date, the MGC announced that eleven entities had filed Phase 1 applications for the Casino Licenses in Regions A and B, and the single Slots Parlor license available. R.A. 43, 18. The MGC set a deadline of December 31, 2013, for submission of Phase 2 applications for such licenses. R.A. 50, 28, 53, 34, 54, 36.

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Status of Slots Parlor Applications Five commercial entities timely filed RFA-1 applications for the Slots Parlor License. R.A. 44, 20. Four of the five were found suitable, but one withdrew from the process after three municipalities (Worcester, Millbury, and Boxborough) rejected its entreaties to have them serve as a host community. Id. 44-48, 21-25. In October 2013, the three remaining Slots Parlor License applicants the MGC had found suitable submitted site-specific RFA-2s. R.A. 45-48, 2325. On February 28, 2014, the MGC awarded the single Slots Parlor license to Penn National for an establishment at the Plainridge harness racing track in Plainville. R.A. 44-45, 20, and http://massgaming.com/wp-content/uploads/Applicantstatus.pdf. Penn Nationals RFA-2 reported that it had assets of $5.4 billion and stockholder equity of $2.3 billion; it projected gross revenues from the first five years of operating the Slots Parlor at more than $1 billion. R.A. 47-48, 25. Status of Applications for Casino Licenses in Regions A and B Six commercial entities submitted RFA-1 applications for a Casino License suitability determination, three for host communities in Region

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A, Sterling Suffolk at Suffolk Downs in East Boston and Revere; Wynn Resorts in Everett; and Foxwoods in Milford (R.A. 49-52, 27-30, 53, 34), and three host communities in Region B - MGM in Springfield; Hard Rock in West Springfield; and Mohegan Sun in Palmer. R.A. 54-55, 35-37. After voters in the proposed host communities of West Springfield, Palmer, East Boston and Milford rejected their host community agreements (R.A. 51, 29-30, 54, 35, 55, 37), one viable Casino License applicant with a positive suitability determination and approved HCA remained in Region A: Wynn Massachusetts, LLC, in Everett, and one in Region B: MGM in Springfield. R.A. 49-50, 28, 52, 32; 54-55, 36. Wynns RFA-2 application reported $7 billion in assets and $177 million stockholders equity; it projected to generate gaming revenue of approximately $4 billion in the first five years of operation. R.A. 49-50, 28. MGM Springfields RFA-2 reported that its parent company, MGM Resorts International, had assets of over $25 billion and stockholder equity of over $7 billion; it projected to generate gaming revenue of over $2.4 billion during the first five years of operations. R.A. 54-55, 36. At a meeting on December 10, 2013, the MGC voted to invite Mohegan Sun to request a waiver of the RFA-2

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regulations and to submit an RFA-2 application for a facility to be located in Revere without the required prior referendum approval of voters in that city, with the condition that Mohegan Sun enter into its own HCA with Revere and commit to holding a referendum within 60-90 days. R.A. 52, 32. Mohegan Sun did reach an HCA with Revere, which Revere voters approved on February 25, 2014, thereby increasing the number of suitable Phase 2 applicants for a Casino license in Region A to two. See R.A. 44-45, 20 and http://massgaming.com/wp-content/uploads/Applicantstatus.pdf. The MGC intends to complete its review and award a Region B Casino License, if any, by May 30, 2014. Id. It intends to award a Region A license, if any, by June 30, 2014. Id. The Tribal Compact and Region C Application The Governor entered into, and the General Court approved, a Compact (the Compact) with the Mashpee Wampanoag Tribe (the Tribe), a federally recognized Indian Tribe in the Commonwealth. R.A. 56-57, 3840. The Compact granted the Tribe the right to operate a gaming facility on land in Taunton that it had options to acquire under an Intergovernmental Agreement (IGA) with the City of Taunton, subject to federal Bureau of Indian Affairs (BIA) approval of

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the Compact and the IGA and the BIAs taking the Taunton land in trust under authority of the federal Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq. (IGRA). Id.3 On April 18, 2013, while noting its operating presumption that the Tribe would ultimately be allowed to operate a gaming establishment under its Compact and taking no position on whether the BIA would ultimately approve the Tribes land in trust application, the MGC announced that it would open the process for possibly granting a commercial Casino License in Region C. R.A. 57, 41. It set September 30, 2013, as the deadline to submit a Region C RFA-1 suitability application, but further provided that entities that had previously filed an RFA-1 for another region or the slots parlor and had been found suitable need not file a new RFA-1. R.A. 58-59, 42. Only one new applicant, KG New Bedford, LLC (KG), submitted an RFA-1. Id. KG has not received a suitability determination nor has it entered into an HCA with any community. Id. (KG along with the 11 entities that had previously filed RFA-1s are at times referred to herein as the Applicants.)
3

The land-in-trust application is still pending at BIA. R.A. 56-57, 38-41.

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The MGC set a July 23, 2014, deadline for Region C site-specific RFA-2 applications; it intends to issue a Region C commercial Casino license, if any, by November 20, 2014. R.A. 44-45, 20, 62, 49, and http://massgaming.com/wp-content/uploads/Applicantstatus.pdf. Applicants Awareness of Potential Repeal Efforts Awareness of the possibility of repeal or material change to the Gaming Law has been manifest by the conduct of both the Commonwealth and Applicants. The Compact signed by the Governor and approved by the General Court includes an automatic amendment requiring the Tribe to cease any gaming activities made illegal by subsequent amendment or repeal of provisions of the Gaming Law. R.A. 56, 39 and R.A. 557, 4.2 and 599, 25.1.2. To the same effect, the Penn National-Plainville HCA contains a force majeure clause that excuses performance for: . . . any condition that prevents or significantly interferes with the operations of [the] gaming establishment [or] the forced closure of all gaming establishments by the Commonwealth of Massachusetts or the Massachusetts Gaming Commission; and actions or failures to act of any governmental authority or agency. R.A. 47 citing http://massgaming.com/wpcontent/uploads/Plainridge-Host-CommunityAgreement.pdf. at 8, 10(C). The MGM/Springfield HCA

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and Mohegan Sun/Revere HCA contain similar force majeure or termination language. See http://massgaming.com/wp-content/uploads/SpringfieldHost-Community-Agreement.pdf at 40, 12.1(f) and http://massgaming.com/wp-content/uploads/Revere-HCA12-23-13.pdf at 36(N) and 38 S(1)(e).

Bills to change the Gaming Law, including one to repeal the law in its entirety (S.167), have been pending from inception of the current 188th session. See http://malegislature.gov/Bills/188 [H310, H320, H2504, H3222, S166, S167, S197, S1311]. Applicants have acknowledged that they knew of the Petition and the possibility of material changes to the Gaming Law, and even advocated for their own changes. R.A. 60-61, 45-47, and 643-52. SUMMARY OF ARGUMENT I. Mootness. The Attorney General contends that

the law proposed by the Petition would constitute a taking solely because it allegedly would wrongfully prevent the MGC from ruling on pending applications. Events have overtaken this rationale. The MGC has already issued the only Slots Parlor license, and intends to complete its consideration of, and act on, all applications for Casino Licenses not later than November 20, 2014 two weeks before the proposed law

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would take effect. As such, the proposed law, if passed, would not affect any application (pp. 16-17). II(A). Invalidity of Any Implied Contract. For more than a century, this Court and the U.S. Supreme Court have held that state legislatures lack the authority to contract away the States right to exercise its police and regulatory powers. As the power of the people to enact laws through the initiative process is co-extensive with that of the Legislature, and the regulation of gambling is at the core of the States police and regulatory powers, any implied contract that purported to prevent the people from exercising such powers is, as this Court put it in an Opinion of the Justices, invalid (pp. 17-25). II(B). Non-Existence of an Implied Contract. This Court recently wrote: [A] contractual claim does not arise under a statute unless the Legislature has explicitly expressed the intent to waive sovereign immunity and create a contractual remedy. Boston Medical Center Corp. v. Secy of the Exec. Office of Health and Human Services, 463 Mass. 447, 459 (2012). In enacting the Gaming Law, the Legislature expressed neither an explicit intent to create a contract between the MGC and Applicants nor any intent to waive sovereign immunity. Indeed, the Gaming Law expressly authorizes and directs the MGC to enter into certain

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types of contracts, but not with the Applicants (pp. 25-33). III. No Impairment of Implied Contract. This Court has held on multiple occasions that if the law is changed while an application for a license is pending, the law in effect at the time the application is ruled on, rather than the law in effect at the time the application was submitted, applies. Accordingly, if the proposed law is enacted, and if there are any applications still pending when it becomes effective, the MGC would honor not violate any implied contract by declining to issue the applicant a license. And, even if the MGC did breach such a contract by doing so, Applicants may obtain an appropriate award of damages (pp. 33-39). IV. No Taking of Applicants Private Property.

Like the racetrack owners in the recent Art. 48 case of Carney v. Attorney General, 451 Mass. 803 (2008) (Carney II), gaming license applicants have no compensable private property interest. Their alleged property interest in the MGCs reviewing and acting on their applications lacks the traditional hallmarks of private property, such as transferability and excludability. Having voluntarily entered into a heavily regulated industry subject to pervasive government control, applicants lack a private property

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interest that requires compensation when the government chooses to modify the program that created the benefit in the first place (pp. 39-45). In addition, the Applicants cannot satisfy any of the prongs of the regulatory takings test of Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124 (1978): (1) although the application fees and surcharges may seem substantial in the abstract, they are insignificant in relation to the assets of the Applicants, which generally are in the billions; (2) the Applicants, in the heavily regulated gaming industry, cannot reasonably have expected that the Gaming Law would not be amended by initiative petition (or legislation) that would restrict or abolish future casino or slots parlor licenses or operations; and (3) the character of the proposed law is plainly a regulatory exercise of the police power, not a physical invasion of the Applicants private property (pp. 45-50). STANDARD OF REVIEW This Courts review of the Attorney Generals denial of certification is de novo. Mazzone v. Attorney General, 432 Mass. 515, 520 (2000) (citing Yankee Atomic Elec. Co. v. Secretary of the Commonwealth, 403 Mass. 203, 207 (1988)(Yankee II)). Furthermore, the burden is on the Attorney General and

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the Interveners to establish that it is reasonably clear that the Petition contains a matter excluded from Art. 48. Associated Industries of Mass. v. Attorney General, 418 Mass. 279, 287 (1994) (unless it is reasonably clear that a proposal contains an excluded matter, neither the Attorney General nor this court on review should prevent the proposal from appearing on the ballot.). This requirement is based on the firmly established principle that Art. 48 is to be construed to support the peoples prerogative to initiate and adopt laws. Yankee II, 403 Mass. at 211. Accordingly, certification should not be denied because of a speculative possibility that some fact or facts may exist, outside the range of the facts that the Attorney General should consider, that would cause the petition to relate to an excluded matter. Associated Indus., 418 Mass. at 286-87. When reviewing the facts considered by the Attorney General in reviewing a petition, this Court consider[s] anew what facts are implicit in the language of the petition or are subject to judicial notice. Id. at 286. As to those facts, this Court is not bound by the Attorney General's determinations. Yankee II, 403 Mass. at 207. This Court is also to consider facts that are subject to the Attorney General's official notice that the Attorney General

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unreasonably disregarded. Associated Indus., 418 Mass. at 286 (citing Yankee II). "Factual matters which are 'indisputably true' are subject to judicial notice; these include '[m]atters of common knowledge or observation within the community.' . . . Official notice includes matters subject to judicial notice, as well as additional items of which an agency official may take notice due to the agency's established familiarity with and expertise regarding a particular subject area. Yankee Atomic Elec. Co. v. Secretary of the Com., 402 Mass. 750, 759 n.7 (1988) ("Yankee I"). ARGUMENT I. THE ATTORNEY GENERALS ARGUMENT WILL BE MOOT BEFORE THE LAW PROPOSED BY THE PETITION TAKES EFFECT. The Attorney Generals argument, which is based exclusively on the purported implied contract rights of applicants for gaming licenses, has already become moot with respect to the Category 2 slots parlor license because the MGC completed its review of all applications and announced its selection of the licensee on February 28, 2014.4 With respect to the applications for Category 1 casino licenses, the MGC is scheduled to award any licenses in Regions A and B
4

R.A. 62, 49 and http://massgaming.com/wpcontent/uploads/Licensing-Schedule.pdf, which the parties agreed in 49 the Court may review.

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by June 30, 2014, and May 30, 2014, respectively. Id. With respect to Region C, if any RFA-2 applications are filed by the deadline of July 23, 2014 (R.A. 5859, 42), the MGC intends to act on such applications by November 20, 2014. R.A. 62, 49. If enacted by the voters on November 4, 2014,5 the law proposed by the Petition would become effective thirty days thereafter. Art. 48, Part V, 1. December 4, 2014 is two weeks after the latest possible date November 20th the MGC will complete its review of and act on all applications. R.A. 62, 49. Accordingly, the MGC will have taken final action on all applications before December 4, 2014, and there will be no applications for gaming licenses pending on that date. Therefore, the Attorney Generals argument will be moot by the time the law proposed by the Petition, if passed, takes effect. II. THE LEGISLATURE LACKED AUTHORITY TO AUTHORIZE, AND THE GAMING LAW DID NOT AUTHORIZE, THE MGC TO ENTER INTO AN IMPLIED CONTRACT THAT WOULD LIMIT OR PREVENT THE COMMONWEALTH FROM EXERCISING ITS CORE POLICE AND REGULATORY POWERS. The Attorney Generals assertion that the MGC entered into implied contracts with the Applicants fails for at least two reasons. First, because the regulation of gambling is at the core of the
5

R.A. 65, 59.

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Commonwealths police power, the Legislature lacks the authority to authorize the MGC to enter into a contract that would limit its and the peoples ability to exercise that power. Accordingly, any such implied contract would be invalid. Second, for the MGC to have the authority to enter into a contract with the Applicants, the Gaming Law would need to show explicit legislative intent to that effect and to waive the Commonwealths sovereign immunity arising from any breach of such contract. The Gaming Law does neither. A. The Right to Limit Gambling Lies Within the Commonwealths Core Police and Regulatory Powers, and May Not be Contracted Away. 1. The power to limit gambling is at the core of the Commonwealths police power and extends to the people under Art. 48.

This Court has repeatedly concluded that property rights are held subject to the fair exercise of the police power, i.e., the power to make laws to secure the general welfare of the community. See, e.g., Paquette v. Fall River, 338 Mass. 368, 375 (1959); Opinion of the Justices, 261 Mass. 523, 553 (1927). The suppression of gambling lies within the domain of the police power of the Commonwealth, and the exercise of this power, which began nearly three centuries ago, has been governed by statutes of State wide

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application. Com. v. Wolbarst, 319 Mass. 291, 294 (1946).6 See Chase v. Proprietors of Revere House, 232 Mass. 88, 96 (1919) (the Commonwealths police power . . . embraces the suppression of nuisances whether injurious to the . . . public morals like gambling houses, and houses of prostitution and ill fame.). Because gambling lies at the core of the police power of the Commonwealth, this Court has repeatedly held that gambling which has been legalized by the Legislature . . . can be abolished at any time that the Legislature may deem proper for the safeguarding and protection of the public welfare. Selectmen of Topsfield v. State Racing Commn, 324 Mass. 309, 315 (1949) (emphasis added).7 Consistent with its holdings that the power of the people to enact legislation through the initiative

Wolbarst identifies numerous Massachusetts statutes regulating gambling and gambling devices going back to Colonial times. Id. at 294-95. See also, e.g., Carney II, 451 Mass. at 812 quoting Selectmen of Topsfield at 309(the authority to conduct races at which gambling occurs otherwise a crime at common law and by statute exists only by virtue of legislative authorization; . . . gambling allowed by the Legislature can be abolished at any time that the Legislature may deem proper for the safeguarding and protection of the public welfare.); Opinion of the Justices, 353 Mass. 779, 782 (1967) (The elimination of illegal gambling and legislative action to that end are a legitimate legislative aim and a proper subject for the exercise of the police power.)
7

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process is, except as to matters expressly excluded by Art. 48, coextensive with that of the Legislature,8 this Court recently observed that particular forms of gambling may be abolished by the people through the initiative process. Carney v. Attorney General, 447 Mass. 218, 232 n.22 (2006) (Carney I) ([w]e do not question the power of the . . . people through the initiative process to abolish animal racing involving betting or wagering).9 Similarly, here, the people, through the initiative process, have the constitutional right to limit or abolish other forms of gambling, provided the initiative does not fall within one of the exclusions in Art. 48. 2. Because the Legislature may not contract away the Commonwealths core police power, any implied contract that purports to do so is invalid.

Massachusetts adheres to the long-established rule that the police power of the State can neither be abdicated nor bargained away, and is inalienable [E]xcept as to matters expressly excluded, the scope of the power of the people to enact laws directly is as extensive as that of the General Court. Opinion of the Justices to the Senate, 375 Mass. 795, 817 (1978). See also, e.g., Paisner v. Attorney General, 390 Mass. 593, 603 (1983) (The people through the popular initiative do indeed, as we stated in the 1978 Opinion, have a power to enact legislation which is coextensive with the power of the General Court.)
9 8

After this Courts decision in Carney II, the people voted to ban pari-mutuel wagering on dog-racing. St. 2008, c. 388.

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even by express grant; and . . . all contract and property rights are held subject to its fair exercise. Boston Elevated Ry. v. Com., 310 Mass. 528, 552 (1942) (quoting Atlantic Coast Line R. Co. v. Goldsboro, 232 U.S. 548, 558 (1914)). See Opinion of the Justices to the Senate and House of Representatives, 341 Mass. 760, 784 (1960) (1960 Opinion) (The Legislature . . . has no power to make, or to delegate the power to make, a contract which in effect is a surrender . . . of the sovereign powers of the commonwealth.) Indeed, [t]he right to exercise the police power cannot be relinquished even by explicit stipulation. Id. The Justices in the 1960 Opinion acknowledged the difficulty in drawing precisely the line between (a) those contracts binding upon the Commonwealth which preclude future legislative change impairing their obligation without the payment of compensation, and (b) contracts which invalidly purport to bind the Commonwealth not to exercise its police power. Id. at 785 (emphasis added). They did, however, make clear that the latter category includes matters of general regulation of the community in a manner closely related to its health, morals, safety, and fundamental welfare. Id. at 786. Given this Courts consistent holdings and statements over the past century,

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especially its specific comments in Chase, Boston Elevated, Topsfield, Wolbarst, Carney I, and Carney II about the authority of the Legislature and the people to regulate or abolish gambling, there can be no doubt that the regulation of gambling falls squarely on the morals, safety, and fundamental welfare side of the line.10 As such, any contract that purports to limit the Legislatures or the peoples right to make illegal certain types of gambling is, as the Justices put it in the 1960 Opinion, invalid. 1960 Opinion, 341 Mass. at 785. See also, e.g., U.S. Trust of New York v. New Jersey, 431 U.S. 1, 23 n.20 (1977) ([A] State is without power to enter into binding contracts not to exercise its police power in the future.); Opinions of the Justices, 293 Mass. 589, 591, 606 (1935) (where certain provisions of proposed bill

In contrast, cases like Dimino v. Secretary of Com., 427 Mass. 704 (1998), Opinion of the Justices, 356 Mass. 775, 793-94 (1969)(the 1969 Opinion), and Boston Elevated, 310 Mass. at 554 upon which the Attorney General erroneously relied in denying certification - fall on the other side of the line established in the 1960 Opinion. The charters or contracts in those cases did not purport to bind the Commonwealth not to exercise its police powers, let alone core police powers. Specifically, Dimino and the 1969 Opinion arose from the Commonwealths power to issue bonds to raise revenue, while Boston Elevated involved the location and right of [a] company to construct, maintain, and operate an elevated railway structure thereon. 310 Mass. at 554. None of these cases were described as matters . . . closely related to its health, morals, safety, and fundamental welfare.

10

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stretch[ed] beyond the contract powers of the General Court and reach[ed] into the domain of powers which are inalienable, enactment of subsequent legislation by the General Court . . . otherwise than in accordance with [those] provisions would not violate the Contract Clause). The invalidity of a contract that purports to restrict the publics right to regulate public morals and fundamental welfare is perhaps best illustrated by the United States Supreme Courts decision in Stone v. Mississippi, 101 U.S. 814 (1879), a case with facts remarkably similar to those at bar. In Stone, the Mississippi legislature granted a 25-year charter to a lottery company in exchange for an initial $5,000 fee, an annual $1,000 tax, and a percentage of receipts from the sale of tickets. Id. at 817. A year later, however, the people adopted a new state Constitution outlawing lotteries. Id. at 815, 819. The holder of the lottery charter argued that it had contracted with the State to operate a lottery, and that the new Mississippi Constitution violated its contract and thus the Contract Clause of the U.S. Constitution. See id. at 819-20. The Supreme Court wrote, [w]hether the alleged contract exists . . . depends on the authority

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of the legislature to bind the State and the people of the State in that way. Id. at 817. The Court ruled that no contract existed. Id. at 819. It held, foreshadowing this Courts decision in Boston Elevated and the 1960 Opinion, [n]o legislature can bargain away the public health or the public morals.11 The Supreme Court concluded: [a]ll that one can get by such a charter is the suspension of certain governmental rights in his favor, subject to withdrawal at will. He has in legal effect nothing more than a license to enjoy the privilege on the terms named for the specified time, unless it be sooner abrogated by the sovereign power of the State. It is a permit, good as against existing laws, but subject to future legislative and constitutional control or withdrawal. Id. at 821. The same is true here. Just as the Mississippi legislature in Stone lacked the power to enter into a contract preventing the people from outlawing lotteries, the Massachusetts legislature lacked the power to authorize the MGC to enter into a contract

Stone, decided 125 years ago, remains good law as the classic example of the reserved powers doctrine. See U.S. v. Winstar Corp., 518 U.S. 839, 888 (1996) (opinion of Souter, J.); id. at 922-23 (Scalia, J., concurring in the judgment); U.S. Trust, 431 U.S. at 23 & n.20; American Auto. Mfrs. Assn v. Massachusetts Dept. of Envtl. Protection, 163 F.3d 74, 79 n.5 (1st Cir. 1998). That doctrine holds that a state government may not contract away an essential attribute of its sovereignty. U.S. Trust, 431 U.S. at 23.

11

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that would prevent the people from enacting a law that would bar the MGC from approving gaming license applications. That is because [t]here is no constitutional protection of charters or contracts against the valid exercise of the police power. Massachusetts Soc. for Prevention of Cruelty to Animals v. Commissioner of Public Health, 339 Mass. 216, 229 (1959). Accordingly, any contract that purported to bar the people from enacting a law that would prevent the MGC from approving applications for casino licenses after the laws effective date would be invalid. As it is axiomatic that an invalid contract cannot be impaired, the Attorney Generals denial of certification of the Petition based on impairment of an implied contract with Applicants is erroneous. B. Even if the Legislature Were Permitted To Contract Away its Core Police Powers, The Gaming Law Does Not Clearly Evince the Legislatures Intent To Do So. 1. The Gaming Law does not show clear legislative intent to bind the Commonwealth to the purported implied contract or to waive the Commonwealths sovereign immunity, both of which are requisites for a contract to arise from a statute such as the Gaming Law.

For a contract to arise from a statute there must be a clear intention of the Legislature that a statute be so interpreted. Town of Milton v. Com.,

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416 Mass. 471, 475 (1993) (emphasis added) citing Boston Elevated, 310 Mass. at 548. This intention must be explicit not only as to the creation of a contract, but it must be accompanied by an explicit waiver of the Commonwealths sovereign immunity. Boston Med. Center, 463 Mass. at 459 ([A] contractual claim does not arise under a statute unless the Legislature has explicitly expressed the intent to waive sovereign immunity and create a contractual remedy.) Absent such express legislative authorizations, the MGC, regardless of whether it solicited and accepted applications and the payment of fees therewith, lacked the authority to enter into the implied contract with the Applicants that the Attorney General has purported to detect. Boston v. Back Bay Cultural Assn., Inc., 418 Mass. 175, 184 (1994) (Officers of governmental agencies have authority to bind their governmental bodies only to the extent conferred by the controlling statute.) (citation omitted). Decisions of this Court demonstrate the specificity of language required for a contract to arise from a statute. In Boston Elevated, the statute provided that the legislative grant to a private company of the right to maintain a street railway at a certain location shall not be subject to revocation except in the manner and on the terms prescribed [by

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the statute]. 310 Mass. at 545. This explicit legislative expression of irrevocability persuaded this Court that the grant of the location with the statutory provisions herein referred to against revocation constituted a contract between the Commonwealth and the company . . . . Id. at 548. Even more straightforward was the statute at issue in Opinion of the Justices, 261 Mass. 523 (1927) (1927 Opinion). That statute stated simply that certain of its provisions shall constitute a contract binding upon the commonwealth. Id. at 540. In contrast, this Court held that the statutory language in Town of Milton was insufficient to show a legislative intent to contract, despite an apparently clear promise and inducement to act. The statute at issue stated, [a]ny city or town which accepts the provisions of this section . . . shall be reimbursed by the commonwealth for one half the cost of [certain] payments. Town of Milton, 416 Mass. at 472 (emphasis added). Despite the use of the word shall, this Court held, [t]he Legislatures enactment of [the statute] and the various municipalities acceptances of [it] did not create binding contracts to pay . . . in the absence of appropriation. Id. at 475. Citing Boston Elevated as authority for its clear intention rule, this Court held that a conclusion is not

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warranted that the Legislature clearly intended to bind itself to make payments according to the statutory scheme. Id. Here, there is no language in the Gaming Law authorizing the MGC to enter into any contract with the Applicants, let alone express language authorizing the MGC to enter into a contract that would limit the Commonwealths authority to enact legislation barring subsequent approval of applications and issuance of gambling licenses. Moreover, the Legislature clearly knew how to expressly authorize the MGC to enter into contracts, because it did so twice in the Gaming Law.12 It did not, however, make any reference whatsoever to the MGCs entering into contracts with Applicants. It is a settled rule of statutory construction that [w]here the Legislature has employed specific language in one paragraph, but not in another, the language should not be implied where it is not present. Com. v. Perella, 464 Mass. 274, 278 (2013).

12

G.L. c. 23K, 71 provides, the MGC shall contract with scientists and physicians to examine the current research as to the causes for problem gambling and the health effects of problem gambling and the treatment methods currently available in the commonwealth. And St. 2011, c. 194, 97, provides: [t]he MGC shall contract with an experienced nonprofit research entity to develop an anonymizing system that automatically removes [certain] data.

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Further, a contractual claim does not arise under a statute unless the Legislature has explicitly expressed the intent to waive sovereign immunity and create a contractual remedy. Boston Med. Ctr., 463 Mass. at 459. There is no suggestion in the Gaming Law that the Legislature expressly waived sovereign immunity if the MGC breached a purported implied contract. To the contrary, the Gaming Law expressly provides, [a]pplicants shall have no legal right or privilege to a gaming license and shall not be entitled to any further review if denied by the MGC. G.L. c. 23K, 17(g). Given that applicants for gaming licenses apparently spent significant sums of money preparing their multi-thousand page applications,13 and, as the Attorney General has acknowledged, spent money negotiating with host and surrounding communities and then working with host communities to obtain binding ballot votes approving the host community agreements,14 it would be remarkable if the Legislature intended to expose the Commonwealth to significant damages for breach of an implied contract sub silentio.15
13

R.A. 59-60, 43. Id. 162, n.8, citing G.L. c. 23K, 15 (8), (9), (13).

14

15

The foregoing assumes that the Applicants damages would, as in Paul Sardella Const. Co., Inc. v.

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2.

The cases decided under the public bidding statutes are inapposite.

The Attorney General relied heavily on what she declared was the analogous context of the Commonwealths public bidding laws for the conclusion that an implied contract arose between the MGC and Applicants. That reliance was misplaced. First, the implied contract found in Sardella afforded a remedy to a bidder who was injured by the awarding authoritys violation of the competitive bidding statute . . . . 3 Mass.App.Ct. at 332.16 Here, if the law proposed by the Petition passes, the MGC would be bound to apply it to any pending

Braintree Housing Authority, 3 Mass.App.Ct. 326, 33435 (1975), affd, 371 Mass. 235 (1976), be limited to bid preparation costs. If they were not so limited, as in Bradford & Bigelow, Inc. v. Com., 24 Mass.App.Ct. 349, 358-59 (1987), perhaps if there were a finding of bad faith, the applicants could presumably seek to recover lost profits. As each of the remaining applicants for a casino in Region A projects gaming revenue in the first five years of $44.5 billion (see R.A. 49-50, 28 and R.A. 53-54, 34), the licensee in just Region A presumably could claim many billions of dollars in lost profits over the fifteen-year life of the license. The purpose of the public bidding laws is to set up a process by which the government can fairly and economically enter into contracts with private parties to carry out construction projects. See Interstate Engineering Corp. v. Fitchburg, 367 Mass. 751, 757-58 (1975) (finding that the two ... legislative objectives underlying the competitive bidding statute are to obtain the lowest price for its work and to establish[] an honest and open procedure for competition for public contracts).
16

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applications. Selectmen of Topsfield, 324 Mass. at 314 ([a] change made in the law pending the application for a permit or a license rather than the law existing at the time of filing is to govern action on the application . . .). Accordingly, the MGCs implementation of the proposed law would not violate the statute, and thus would not violate any implied contract in effect at the time of the decision. Second, Town of Milton heightened the level of clarity with which the Legislature must express an intention to bind the Commonwealth to a contract. See Hollstein v. Contributory Retirement Appeal Bd., 47 Mass.App.Ct. 109, 114 (1999). Even assuming that Sardella apparently the first decision authorizing a suit for damages under the public bidding laws is still good law after Town of Milton,17 the Gaming Law and the public bidding statutes are readily distinguishable from each other on a basis the Attorney General has acknowledged18 and the Appeals Court found material just a few months ago in Mello Const., Inc. v. Division of Capital Asset Management,

This Court does not seem to have rendered any decisions since Town of Milton addressing whether Sardella remains good law.
18

17

R.A. 159 (The [MGC] enjoys a great deal more discretion in the award of licenses than does a public contracting authority in the award of a contract.)

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84 Mass.App.Ct. 625 (2013), rev. denied, 467 Mass. 1103 (2014). In Mello, the Appeals Court affirmed dismissal of a contractors complaint for monetary damages against the Division of Capital Asset Management and Maintenance arising from DCAMs denial of certification to bid on public construction projects. Id. at 629. It distinguished the Sardella line of cases allowing disappointed low bidders deprived of rights enumerated in the public bidding statutes to seek to recover bid preparation costs and lost profits on the basis that [n]one involved a discretionary certification decision . . . Id. at 629, n.10. The public bidding laws requirements are extensive and detailed; they afford issuers little or no discretion. See, e.g., G.L. c. 149, 44A(2)(D) and 44D. In contrast, the Gaming Law grants the MGC broad discretion in multiple key sections of the statute. See, e.g., G.L. c. 23K, 17(g) and 18. See also G.L. c. 23K, 3(l), 30(e) and 61(b). Perhaps most importantly, it specifically grants the MGC discretion in deciding both whether and, if so, to whom, to issue a license. G.L. c. 23K, 17(g) and 18. Finally, a disappointed applicant for a public construction contract is entitled to judicial review

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if its bid is not selected because of an alleged failure to comply strictly with the public bidding statutes. See, e.g., Phipps Products Corp. v. Massachusetts Bay Transp. Authority, 387 Mass. 687 (1982); Cataldo Ambulance Service, Inc. v. Chelsea, 43 Mass.App.Ct. 26 (1997). The Gaming Law does not permit such review. It states, [a]pplicants 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. G.L. c. 23K, 17(g). Query the existence or terms of a contract that affords a disappointed applicant no review. III. EVEN IF THERE IS AN IMPLIED CONTRACT BETWEEN THE MGC AND APPLICANTS, THE PROPOSED LAW WOULD NOT CAUSE AN IMPAIRMENT THEREOF. Having discerned an implied contract in which the MGC, in return for each Applicants submission of an application and payment of the application fee and possible surcharges, was obliged to consider and act upon the applications, the Attorney General reasoned: (1) that the proposed law, if enacted, would breach that contract; (2) that the MGC could successfully defend on the basis of impossibility, impracticability, or the law of unjust enrichment; and (3) the resulting denial of a damages remedy would mean that the proposed law would impair the implied contract. R.A. 160-61. This reasoning is erroneous.

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A.

The MGC Would Not Breach Any Implied Contract by Complying with the Law Proposed by the Petition.

The law proposed by the Petition would prohibit the MGC from approving any applications for gaming licenses on or after the laws effective date. R.A. 152, 2. Thus, in the very unlikely event that there are any applications on which MGC has not made its final determinations by December 4, 2014, the new law would prospectively impose a new substantive rule on the MGC. Assuming the MGC would obey the new law, the MGCs implementation of it to all license application determinations made after its effective date would not result in a breach of contract. As noted above, [a] change made in the law pending the application for a permit or a license rather than the law existing at the time of filing is to govern action on the application . . . . Selectmen of Topsfield, 324 Mass. at 314. This rule applies to gambling establishments, see id. at 310-12 (statute enacted after a company applied to the State Racing Commission for a license to conduct harness racing prevented the racing commission from acting on the application), and in other contexts as well.19 Thus, even if, as the See, e.g, Spector v. Building Inspector of Milton, 250 Mass. 63, 71 (1924) (The fact that the petitioner filed
19

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Attorney General posits, Applicants have an implied contractual right to Commission action on their applications in accordance with statutory and regulatory criteria,20 the rule of Selectmen of Topsfield would require the MGC to review the applications in accordance with the law in effect at the time of decision, not the law in effect at the time the applications were submitted. With respect to any applications pending when the law proposed by the Petition takes effect, the MGC would thus be complying with any contract by applying the new law and not approving any applications; it would thus not breach, and could not possibly impair, any implied contract.

his application for a [building] permit before the zoning by-law was enacted is no reason why it [the by-law] should not be held applicable to him from and after it became operative. The petitioner held his property subject at all times to every valid exercise of the police power. The filing of his application gave him no vested rights.); City of Salem v. Maynes, 123 Mass. 372, 374 (1877) (The facts that, before the passage of the ordinance, the defendants had begun work on the cellar upon the site of the proposed building, and had made a contract between themselves for the erection of the building, and had bought and prepared lumber to carry out that contract, does not exempt them from the operation of the ordinance.).
20

R.A. 160 (emphasis in original).

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B.

If the MGCs Application of the Proposed Law Did Constitute a Breach of an Implied Contract, the Applicants Would Have a Claim for Damages.

The Attorney General asserts that no damages remedy would be available to Applicants because of the doctrines of impossibility and impracticability. R.A. 163-64. But those doctrines apply only if performance becomes impossible from the accidental perishing of the thing [the parties contemplated the continued existence of] without the fault of either party. Chase Precast Corp. v. John J. Paonessa Co., Inc., 409 Mass. 371, 373 (1991) (emphasis added). Here, if the Petition passes, and if the MGC breached any implied contract by applying the new law, the Commonwealth would be at fault for enacting the new law. It would thus be unable to assert impossibility or impracticability as a defense to a suit for breach of contract against the MGC. The Attorney General also errs in discounting an Applicants claim for restitution under a theory of unjust enrichment. To prevail on a claim of unjust enrichment, the Applicants must demonstrate (1) a benefit [of money or property of another] conferred upon the [MGC] by the[m]; (2) an appreciation or knowledge by the [MGC] of the benefit; and (3) acceptance or retention by the [MGC] of the

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benefit under such circumstances as to make it inequitable for the defendant to retain the benefit without payment of its value.21 The Attorney General does not maintain that the Applicants would not be able to satisfy the first two of these elements. Instead, she argues that the MGCs retention of monies it had already spent would not be unjust. R.A. 161-62. Contrary to the Attorney Generals view, determination of inequity or injustice does not turn on a judges sense of fairness; instead, it turns on the reasonable expectations of the parties.22 For example, in analyzing this third element in Salamon, 394 Mass. at 859-60, this Court considered whether either party should have reasonably expected that the defendant would pay for the value of partially completed houses on his land. Here, the monies paid by the Applicants to the MGC may be divided into two categories: monies already spent by the MGC in investigating the Applicants and Fort Point Commercial Co., Inc. v. Spiegel, 28 Mass.L.Rptr. 339, 2011 WL 1758950, *9 (Mass. Super. 2011) (quoting Mass. Eye and Ear Infirmary v. QLT Phototherapeutics, Inc., 552 F.3d 47, 57 (1st Cir. 2009). See Tyler v. Michaels Stores, Inc., 840 F.Supp.2d 438, 451 (D. Mass. 2012) (same). Community Builders, Inc. v. Indian Motorcycle Associates, Inc., 44 Mass.App.Ct. 537, 560 (1998) (The benefit must be unjust, a quality that turns on the reasonable expectations of the parties.) (citing Salamon v. Terra, 394 Mass. 857, 859 (1985)).
22 21

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their applications or distributed to potential host communities, and monies not yet spent. As to the former, the money was spent primarily on suitability determinations. The MGC has completed those determinations,23 and those Applicants the MGC found suitable have thereby received a benefit from them, regardless of whether they ultimately receive a license.24 As the money was spent and the Applicants received a benefit from it, they should not reasonably expect the MGC to pay it back. As to monies the MGC has not yet spent, neither party should reasonably expect the MGC to retain those funds if there were an implied contract requiring the MGC to review applications that the MGC breached. The
23

This is true except for KG in Region C, which did not submit its Phase 1 application until September 30, 2013. However, because the Commission has set a deadline of July 23, 2014 for the submission of Phase 2 applications for a casino license in Region C (R.A. 58-59, 42), and since a suitability finding is a prerequisite to making such an application, it is highly likely the MGC will complete its suitability determination for KG in advance presumably well in advance of that deadline. The rigorous nature of the MGCs suitability investigations, which include staff reports that typically are hundreds of pages long, and Commission determinations typically based upon adjudicatory hearings, make a MGC suitability determination a potentially very valuable reference and selling point to an applicant seeking to operate gaming establishments elsewhere. See G.L. c. 23K, 12; 205 C.M.R. Parts 111-117. See also, e.g., R.A. 45-48, 21-25; R.A. 49-52, 36-37, 42, and R.A. 343-75 and 384-411.
24

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parties would reasonably have expected the MGC to be required to pay such amounts back to the Applicants.25 Based on the foregoing, the Applicants would have a viable damages remedy. Accordingly, there would be no impairment. IV. THE PROPOSED LAW WILL NOT RESULT IN A TAKING OF PRIVATE PROPERTY OF GAMING LICENSE APPLICANTS. Even if an applicant could assert a claim for breach of an implied contract but not recover damages, there would still need to be a taking.26

The MGC has already signaled as much as to the license fees. Its regulations had said that license fees were non-refundable, but it recently filed an emergency amendment to those regulations deleting the word non-refundable. Compare Massachusetts Register Number 1256 dated March 14, 2014 amending 205 C.M.R. 121.01(1) and (2), effective February 24, 2014, with 205 C.M.R. 121.01 and (2) before February 24, 2014. The Attorney Generals conclusion that, if the applicants could not recover damages, the proposed law would impair the Obligation of Contracts in violation of the Contract Clause, U.S. Const., art. I, 10, cl. 1, is both erroneous and inapposite. The first question in Contract Clause analysis is whether there is a contractual obligation that the challenged law would affect, see U.S. Trust, 431 U.S. at 17-18, 23-25. Part II of this brief demonstrates that there is no contractual obligation here because the General Court, in enacting the Gaming Law, had neither the authority nor the intention to bind the Commonwealth not to exercise its police power in this manner in the future. Moreover, a violation of the Contract Clause would not, as a matter of law, constitute a taking of private property to public use under art. 10 of the Declaration of Rights so as to come within the scope of excluded matters as defined in Art. 48, Init., Pt. 2, 2. Bowe v. Secretary of the Com., 320 Mass. 230, 247 (1946); Horton v. Attorney General, 269 Mass. 503, 513 (1930).
26

25

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In Carney II, this Court rejected claims by the owner of a dog racing track, who had a long history of investment in the tracks operation and renewals of its licenses, that an initiative petition to ban dog racing would result in a taking of their reasonable expectation of the continued renewal of their licenses. 451 Mass. at 816. Here, mere applicants for a gaming license have no such status as licensee, no legal right to a license, and no reasonable expectation, in this very heavily regulated industry, to the maintenance of a statutory and regulatory status quo. They have no private property interest in the MGCs acting upon their application under superseded statutory standards, and none of the three prongs of the familiar test governing regulatory takings set forth in Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124 (1978), supports the Attorney Generals conclusion that prohibiting the MGC from approving new casino and slots parlor gaming licenses after the proposed law takes effect would somehow deprive license applicants of their private property. Courts have developed a two-step test to evaluate claims that a governmental regulation constitutes a taking of private property without just compensation. First, as a threshold matter, the court must determine

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whether the claimant has established a cognizable property interest.27 American Pelagic Fishing Co., L.P. v. U.S., 379 F.3d 1363, 1372 (Fed. Cir. 2004). If the claimant fails to demonstrate the existence of a legally cognizable property interest, the courts task is at an end. Id. Second, if the court finds that a property interest does exist, it must determine whether a compensable taking occurred. Maritrans Inc. v. U.S., 342 F.3d 1344, 1351 (Fed. Cir. 2003); Conti v. U.S., 291 F.3d 1334, 1339 (Fed. Cir. 2002). Neither step is satisfied here. A. Applicants Have No Compensable Property Interest In the MGCs Consideration Of and Action Upon Their Applications.

Applicants for a gaming license do not have a right to a license under c. 23K even if they meet the minimum statutory requirements. The Gaming Law permits the Commission to issue at most four licenses and it need not issue any at all. G.L. c. 23K, 17(g), 19(a), and 20(a). The Gaming Law also expressly provides: The Commission shall have full discretion as to whether to issue a license. Applicants shall

27

While the existence of a property interest may give the holder a right to a pre-deprivation hearing as a matter of procedural due process, that does not necessarily mean that the interest is of a kind that entitles the owner to compensation under the takings clause of the Fifth Amendment to the United States Constitution or art. 10 of the Massachusetts Declaration of Rights. Carney II, 451 Mass. at 815.

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have no legal right or privilege to a gaming license and shall not be entitled to any further review if denied by the Commission. G.L. c. 23K, 17(g) (emphasis added). The most that the Attorney General therefore has contended is that applicants have an implied contractual right to the Commissions consideration of and action on license applications in accordance with G.L. c. 23K. R.A. 155. As a matter of fact, the Commission has already given each application very substantial consideration, conducting investigations and examinations, preparing extensive reports, holding public and adjudicatory hearings and making detailed factual determinations as to the suitability of each applicant. This is the very process of review and determination to which the applicants application fees and surcharges were intended to, and have been, primarily devoted. See, e.g., R.A. 344-375, 385-400, 481-500. And, as indicated in n.24, supra, every applicant the MGC finds suitable after this rigorous and comprehensive process stands to benefit from those determinations as it seeks to operate gaming establishments elsewhere. That exchange of consideration does not amount to a taking.

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Moreover, any suggestion that such applicants have a contract-based entitlement to have the MGC take final action on their application based upon the law as it existed at the time of filing would be contrary to the rule, discussed above, that [a] change made in the law pending the application for a permit or a license rather than the law existing at the time of filing is to govern action on the application . . . Selectmen of Topsfield, 324 Mass. at 314. See also cases cited in n.19, supra, and Folden v. U.S., 56 Fed. Cl. 43, 61 (2003), affd, 379 F.3d 1344 (Fed. Cir. 2004), cert. denied, 545 U.S. 1127 (2005). The purported right to governmental review of and action upon an application for a gaming license lacks the traditional hallmarks of private property. The term property denotes the group of rights [including] the right to possess, use and dispose of the claimed interest. Conti v. U.S., 48 Fed. Cl. 532, 538 (Ct. Cl. 2001), quoting U.S. v. General Motors Corp., 323 U.S. 377-78 (1945), affd, 291 F.3d 1334. The rights to sell, assign, or otherwise transfer are traditional hallmarks of property. Conti, 291 F.3d at 1341. Here, although the Gaming Law does not appear to expressly address the point, applications for a license thereunder cannot possibly be transferable. The Gaming Law requires rigorous and comprehensive investigations

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into the suitability of each applicant and associated personnel. G.L. c. 23K, 12-13. It obviously would eviscerate that process for an applicant to have the right to transfer its application to a different entity that had not satisfied that suitability examination and determination. In Carney II, this Court held that the dog track owners had no compensable property interest in their racing licenses. 451 Mass. at 816. Moreover, the Court pointed out that even if those licenses had aspects of property, such a right is not subject to compensation where the government chooses to modify the program that created the benefit in the first place. Id. at 817.28

The chief and one of the most valuable characteristics of the bundle of rights commonly called property is the right to sole and exclusive possession the right to exclude strangers, or for that matter friends, but especially the Government. Mitchell Arms, Inc. v. U.S., 7 F.3d 212, 215 (Fed. Cir. 1993) (quoting Hendler v. U.S., 952 F.2d 1364, 1374 (Fed. Cir. 1991), cert. denied, 114 S. Ct. 2100 (1994)). In that case, the government prohibited the plaintiff from selling imported arms after issuing to it a license to import them. The court explained that enforceable rights sufficient to support a taking claim against the United States cannot arise in an area voluntarily entered into and one which, from the start, is subject to pervasive Government control. [W]hen a citizen voluntarily enters such an area, the citizen cannot be said to possess the right to exclude. 7 F.3d at 216 (citing Bowen v. Public Agencies Opposed to Social Sec. Entrapment, 477 U.S. 41 (1986)).

28

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Accordingly, applicants for a gaming license have no compensable private property right that will be affected if the proposed law is enacted, and no further inquiry is required to conclude that the proposed law would not constitute a taking. B. Even If There Were A Private Property Interest In The Commissions Consideration Of And Action Upon An Application, The Proposed Law Would Not Result In A Compensable Taking.

Even if an applicant could show a valid property interest here, it would still be required to show that the law proposed by the Petition amounts to a compensable taking of that property interest. American Pelagic, 379 F.3d at 1372; Maritrans, 342 F.3d at 1351; Conti, 291 F.3d at 1339. As a general matter,

in determining whether a regulation goes too far, Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922), and thus results in a compensable taking of private property, courts applying the Penn Central regulatory takings test consider: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action. Carney II, 451 Mass. at 813 (quoting Leonard v. Brimfield, 423 Mass. 152, 154 (1996), and Connolly v. Pension Ben. Guar.

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Corp., 475 U.S. 211, 225 (1986)).29 The determination of whether a particular law constitutes a taking requires an ad hoc factual inquiry into the circumstances of each particular case, but those three factors have particular significance. Connolly, 475 U.S. at 224-25.30 1. Economic Impact On The Claimant

The first factor in the regulatory takings analysis is the economic impact of the regulation on the claimant. Id. at 225. The Gaming Law requires each applicant to pay a $400,000 nonrefundable application fee, to be used to fund an unusually rigorous and comprehensive investigation and

The "categorical taking" framework of Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992), does not govern here because, among other reasons, it applies only when governmental action deprives the owner of "all economically beneficial use of land. Several U.S. Courts of Appeals have held that Lucas applies only in the case of real property. Hawkeye Commodity Promotions, Inc. v. Vilsack, 486 F.3d 430, 441 (8th Cir. 2007); Holliday Amusement Co. of Charleston, Inc. v. South Carolina, 493 F.3d 404, 411 (4th Cir. 2007); Unity Real Estate Co. v. Hudson, 178 F.3d 649, 674-75 (3rd Cir. 1999). Regulatory takings analysis is peculiarly fact dependent, involving essentially ad hoc, factual inquiries. Carney II, 451 Mass. at 813, quoting Yankee II, 403 Mass. at 209, and Penn Central, 438 U.S. at 124. If undetermined factual issues lead to reasonable, not frivolous, contentions that the petition [does] not necessarily effect a regulatory taking, Carney II at 814 (quoting Yankee II at 210), the petition should be certified for inclusion on the ballot.
30

29

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examination of the applicants suitability (and, to a much lesser extent, to enable potential host communities to conduct impact studies and negotiate prerequisite host community agreements). R.A. 59-60, 43-44. The statute also authorizes the MGC to impose surcharges to further defray its investigatory expenses. G.L. c. 23K, 15(11). As of January 21, 2014, eleven applicants had paid the MGC $7.75 million in such additional charges. R.A. 59-60, 43. Although in the abstract these amounts may appear to be substantial, in context, they are not. The Gaming Law requires successful applicants to pay a license fee of $85 million for a casino license, and $25 million for a slots parlor license (G.L. c. 23K, 10(d) and 11(b)),31 and to make a minimum capital investment of at least $500 million in a casino and $125 million in a slots parlor. G.L. c. 23K, 10(a), 11(a); R.A. 43, 19. Given the costs of doing business on that order of magnitude, it is not surprising to find that each of the remaining applicants has billions of dollars in assets.32
31

The MGC recently amended its regulations to delete the word non-refundable from the requirement that these fees be paid. See n.25, supra.
32

The three gaming companies with pending RFA-2 applications for a Casino License reported their assets as follows: Wynn, more than $7 billion, R.A. 50, 28; Mohegan Sun, more than $2 billion, R.A. 53, 34; and MGM, more than $25 billion. R.A. 54-55,

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2.

Reasonable Expectations

The second factor in the regulatory takings analysis is distinct investment-backed expectations, which must be reasonable. Leonard, 423 Mass. at 155 (citing Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984)). The applicants here could not reasonably have expected that opponents of the Gaming Law would not pursue an initiative petition to prohibit the MGC from issuing new casino or slots parlor licenses after the proposed laws effective date. First, gambling is a heavily regulated industry that, due to its nature, can be abolished at any time for the protection of the public welfare, which greatly reduce[s] the reasonableness of expectations and reliance on regulatory provisions. Carney II, 451 Mass. at 817, quoting Selectmen of Topsfield, 324 Mass. at 315.33 See also American Mfrs. Mut. Ins. Co. v. Commissioner of Ins., 374 Mass. 181, 194 (1978) (an intensely regulated company is on some notice

36. The successful Slots Parlor License applicant, Penn National, reported assets of more than $5.4 billion. R.A. 47-48, 25. As the Fourth Circuit in a case involving video gambling systems recently observed, [t]he pendulum of politics swings periodically between restriction and permission in such matters [as heavily regulated or contentious activity], and prudent investors understand that risk. Holliday Amusement Co., 493 F.3d at 411.
33

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that future legislation may adjust its position.); Folden, 56 Fed. Cl. at 61 (Plaintiffs in a highly regulated field such as FCC licensing can have no distinct investment-backed expectations that include a reliance upon a legislative and regulatory status quo.). Second, after the Gaming Law was passed, the petitioners immediately sought a referendum on the Gaming Law, and, when those efforts were thwarted, publicly announced their intention to pursue this initiative petition (long before any applications were submitted). R.A. 38-39, 4-6. Finally, as would be expected of sophisticated business entities, the applicants, before applying, made a risk assessment that took into account the potential for a change in the law. The Chief Executive Officer of Mohegan Sun said of the Petition: We knew that was out there when we went after this, we knew that was looming, but we feel that this is a project that is worth pursuing. R.A. 61, 46 and 645. Chairman of the MGC echoed this assessment that people in this business . . . sort of discount that [possibility of repeal] in their return-on-investment calculations. R.A. 60, 45. The

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3.

Character of the Legislation

The third factor in the regulatory takings analysis is the character of the legislation. A taking may more readily be found when the interference with property can be characterized as a physical invasion by government. Leonard, 423 Mass. at 156 (quoting Penn Central, 438 U.S. at 124). Here, obviously, there is no physical invasion of the Applicants property. With respect to its impact upon Applicants, the proposed law would simply prohibit the MGC from issuing any more gaming licenses. Thus, all three of the factors in the governing Penn Central regulatory takings framework support the conclusion that the proposed law would not result in a compensable taking of Applicants private property. CONCLUSION For the foregoing reasons, the Plaintiffs request that the Court enter an order declaring that the Petition does not contain an excluded matter and is eligible to be placed on the ballot for the State election in November 2014.

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ADDENDUM

ADDENDUM TABLE OF CONTENTS Page Decision of Attorney General Denying Certification of Petition.............ADDENDUM Massachusetts Constitution, Amend. Article 48.....................ADDENDUM G.L. c. 23K, 3(l) .......................ADDENDUM G.L. c. 23K, 10 .........................ADDENDUM G.L. c. 23K, 11 .........................ADDENDUM G.L. c. 23K, 12 .........................ADDENDUM G.L. c. 23K, 13 .........................ADDENDUM G.L. c. 23K, 15 .........................ADDENDUM G.L. c. 23K, 17(g) ......................ADDENDUM G.L. c. 23K, 18 .........................ADDENDUM G.L. c. 23K, 19 .........................ADDENDUM G.L. c. 23K, 20 .........................ADDENDUM G.L. c. 23K, 30(e) ......................ADDENDUM G.L. c. 23K, 61(b) ......................ADDENDUM G.L. c. 23K, 71 .........................ADDENDUM G.L. c. 149, 44A(2)(D) ..................ADDENDUM G.L. c. 149, 44D .......................ADDENDUM St. 2008, c. 388...........................ADDENDUM St. 2011, c. 194, 91 ....................ADDENDUM St. 2011, c. 194, 97 ....................ADDENDUM 205 C.M.R. 111-117 ........................ADDENDUM 205 C.M.R. 121.01(1) & (2) (pre-2-24-14)...ADDENDUM 205 C.M.R. 121.01(1) & (2) (eff. 2-24-14)..ADDENDUM

001 012 020 022 024 024 025 027 032 032 035 036 038 040 041 043 044 050 051 053 054 075 076

THE COMMONWEALTH OF MASSACHUSETTS

OFFICE OF THE ATTORNEY GENERAL

ONE ASHBURTON PLACE BOSTON, MASSACHUSETTS MARTHA COAKLEY
AnORNEY GENERAL

02108
(617) 727-2200
www.mass.gov/ago

September 4,2013
John F. Ribeiro 15 James Ave. Winthrop, MA 02152

Re:

Initiative Petition No. 13-09: Law to Prohibit Casino Gambling

Dear Mr. Ribeiro: In accordance with the provisions of Aliicle 48 of the Amendments to the Massachusetts Constitution, we have reviewed the above-referenced initiative petition, which was submitted to the Attorney General on or before the first Wednesday of August of this year. I regret that we are unable to certify that the proposed law complies with the requirements of Article 48, the Initiative, Part 2, Sections 2 and 3. Section 2 states in pertinent part: "No proposition inconsistent with anyone of the following rights of the individual, as at present declared in the declaration of rights, shall be the subject of an initiative or referendum petition: The right to receive compensation for private propeliy appropriated to public use[.]" As explained below, the law proposed by Petition No. 13-09 is inconsistent with this right as guaranteed in Article 10 of the Declaration of Rights, Mass. Const. Pt. 1. The proposed law, by prohibiting the Massachusetts Gaming Commission ("Commission") from issuing licenses for casinos or a slots parlor under the Commonwealth's expanded gaming law, G.L. c. 23K, would impair the implied contracts between the Commission and gaming license applicants that require consideration of and action on license applications in accordance with G.L. c. 23K. Contract rights are considered property and may not be "taken" by an initiative petition. li, Dimino v. Secretary of the Commonwealth, 427 Mass. 704 (1998) (initiative petition for law that would have invalidated bond covenants worked an uncompensated "taking" of bondholders' "property rights" and should not have been certified by Attorney General under ali. 48); see Boston Elevated Ry. Co. v. Commonwealth, 310 Mass. 528, 554 (1942) (contract between Commonwealth and corporation is property, protected by art. 10. of Declaration of Rights). Here, the proposed law would impair and thus "take" applicants' contract rights, without any provision for paying compensation. The proposed law is therefore inconsistent with the "right to receive compensation for private property appropriated to public use" and cannot be certified. Our decision, as with all decisions on certification of initiative petitions, is based solely

ADDENDUM 001

John F. Ribeiro September 4,2013 Page 2

on art. 48's legal standards; it does not reflect any policy views the Attorney General may have on the merits of the proposed law. Below, we set forth the provisions of the proposed law and ,then explain in more detail why it cannot be certified under art. 48. 1. Description of the Proposed Law

The proposed law, entitled "An Act Relative to Illegal Gaming," provides in pertinent part as follows: SECTION 1. Section 7 of chapter 4 of the General Laws, as appearing in the 2012 Official Edition, is hereby am~nded by striking out clause Tenth and inserting in place thereof the following clause: "Tenth, 'Illegal gaming,' a banking or percentage game played with cards, dice, tiles or dominoes, or an electronic, electrical or mechanical device or machine for money, property, checks, credit or any representative of value, but excluding: (i) a lottery game conducted by the state lottery commission, under sections 24, 24A and 27 of chapter 10; (ii) pari-mutuel wagering on horse races under chapters 128A and 128C; (iii) a game of bingo conducted under chapter 271; and (iv) charitable gaming under said chapter 271." SECTION 2. Chapter 13K of the General Laws, as appearing in the 2012 Official Edition, is hereby amended by adding the following section 72 following section 71: "Notwithstanding the provisions of this chapter or any general or special law to the contrary, no illegal gaming as defined in section 7 of chapter 4 shall be conducted or permitted in this commonwealth and the commission is hereby prohibited from accepting or approving any application or request therefor." The effect of Section 1 of the proposed law, which replaces the existing definition of "Illegal gaming" with a new, shorter definition, is two-fold. It removes (1) an existing exemption for "a game conducted under chapter 23K," and (2) an existing exemption for "parimutuel wagering on ... greyhound races under said chapter 128C[.]" Thus, games conducted under G.L. c. 23K -- that is, games conducted under Commission licenses for casinos and a slots parlor -- would now be illegal, and subject to existing state laws providing criminal penalties for, or otherwise regulating or prohibiting, activities involving illegal gaming. Similarly, pari-mutuel wagering on greyhound races under G.L. c. 128C, which is currently conducted under licenses issued by the Commission, would become "illegal gaming" and would be subject to the existing state laws just mentioned. The effect of Section 2 of the proposed law is to prohibit the Commission from accepting any license applications or issuing any licenses for what is newly defined as "illegal gaming," including casinos, a slots parlor, or pari-mutuel wagering on greyhound races. Section 2 would also prohibit any such "illegal gaming" from being conducted or permitted in the

ADDENDUM 002

John F. Ribeiro September 4,2013 Page 3

Commonwealth, a prohibition that would appear to extend to activities under any licenses that might already have been issued by the Commission when the proposed law took effect after the November 2014 election. It is not that effect on licenses already issued, but rather the proposed law's effect on the Commission's process for reviewing applications for licenses for casinos and a slots parlor, that is the focus of our analysis.' 2. Scope of Review

In determining whether a proposed law contains a matter that art. 48 excludes from the initiative process, the Attorney General may not confine herself to the face of the petition. Rather, "the Attorney General should consider the facts implied by a petition's language and officially noticeable facts when determining whether to certify that a submitted petition contains only subjects not cxcluded from the initiative petition's operation." Yankee Atomic Elec. Co. v. Secretary of the Commonwealth, 402 Mass. 750,759 (1988) (emphasis added); see id. at 758 ("the Attorney General should consider petitions' factual impact when certifying that they do not contain excluded subjects"). "Official notice includes matters subject to judicial notice, as well as additional items of which an agency official may take notice due to the agency's established familiarity with and expertise regarding a particular subject area." Id. at 759 n.7. Here, as set forth in the analysis that follows, we take official notice of certain matters set forth on the Commission's website concerning its application process for gaming establishment licenses (that is, licenses for casinos and a slots parlor), including the Commission's encouragement for numerous entities to apply, and the amounts paid by such applicants to the Commission in furtherance of the application process. 3. The Contracts at Issue

In G.L. c. 23K, the Legislature established a rigorous and detailed process for Commission review of applications for gaming establishment licenses. The Commission itself further specified many of the details of that process in its regulations, in particular 205 C.M.R. Parts 110-119, and in the Commission's application materials available at http://massgaming.com/licensing-regulations/applicationsf (last visited 9/3/2013). We take notice that the Commission actively encouraged the submission of gaming license applications, as indicated in the January 15,2013 statement of the Commission's Chairman, announcing that eleven entities had applied for the three casino licenses and one slots parlor license available. The Chairman stated, "The Massachusetts legislation drafted the Expanded Gaming Act prioritizing competition as key criteria. The gaming commission has vigorously carried that charge forward resulting in the achievement of a gaming competition that is robust and primed to
1 We take notice that under the Commission's current schedule, it expects, but has not bound itself, to have issued licenses by the time the proposed law could take effect in late 2014. See http://massgaming.com/wpcontent/uploads/Commissioners-Packet-7 .11.13 .pdf at p. 8 (last visited 9/4/2013). The Phase I application process for the Region C casino license has not yet closed; the currently-projected date for issuance of that license is November 20,2014. Id.

ADDENDUM 003

John F. Ribeiro

September 4,2013 Page 4

obtain that absolute maximum benefits in job creation and economic growth to the residents of the commonwealth." See http://massgaming.com/wp-content/uploads/Massachusetts-GamingCommission-Receives-Il-Pre-Qualifying-Applications-for- Expanded-Gaming-License-I-152013.pdf (last visited 9/3/2013). Under G.L. c. 23K, 15(11), applicants were required to pay a non-refundable $400,000 application fee, "provided, however, that if the costs of the investigation exceed the initial application fee, the applicant shall pay the additional amount to the commission within 30 days[.]" We take notice of Commission records indicating that as of June 8, 2013, the eleven applicants had paid the Commission $4.4 million in application fees, plus $4.2 million in charges for additional investigations related to the applicants. As of June 8, 2013, the Commission had spent $6.8 million of that amount. See http://massgaming.com/wpcontent/uploads/Commissioners-Packet-7.11.13.pdf, p. 7 (last visited 9/3/2013). The Legislature declared in G.L. c. 23K, 1(1) (with emphasis added), that "ensuring public confidence in the integrity of the gaming licensing process and in the strict oversight of all gaming establishments through a rigorous regulatory scheme is the paramount policy objective of this chapter[.]" The goals of the licensing process also may be said to include (1) obtaining the maximum possible benefit for the people of the Commonwealth, as well asthe Commonwealth itself and its political subdivisions, from the expansion of gaming in Massachusetts; and (2) establishing an honest and open procedure in the competition for licenses, and placing applicants on an equal footing in that process.

In the analogous context of the Commonwealth's public bidding laws, the Appeals Court has recognized the existence of an implied contract between bidders and the public contracting authority. Noting the rule that "in matters of substance there must be strict compliance with the requirements of [the public bidding laws,]" the Appeals Court held that "[t]he 'honest and open procedure for competition' among the various bidders that is one of the fundamental objectives of the competitive bidding statute must necessarily entail fair consideration of all the submitted bids in accordance with the applicable sections of the statute." Paul Sardella Const. Co., Inc. v. Braintree Housing Authority, 3 Mass. App. Ct. 326, 332, 333 (1975) (quoting Interstate Engineering Corp. v. City of Fitchburg, 367 Mass. 751, 758 (1975).2 "Many courts [in other jurisdictions] have held that it is an implied condition of every invitation for bids issued by a public contracting authority that each bid submitted pursuant to the invitation will be fairly considered in accordance with all applicable statutes. . .. Should the public contracting authority fail to give such consideration, the implied contract formed by the submission of such a bid is broken, and recovery of bid preparation costs is deemed a proper remedy." Sardella, 3 Mass.
2 The type of procedural violation and resulting prejudice at issue in Sardella is illustrative. Sardella was originally determined to be the lowest responsible and eligible general bidder, but when a selected sub-bidder failed to execute its subcontract, the public contracting authority did not follow the statutory requirement that it cooperate with Sardella to select another sub-bidder and adjust Sardella's total contract price as necessary. Instead, the contract was awarded not to Sardella, but to the bidder originally determined to be the third lowest bidder. Sardella, 3 Mass. App. et. at 327-28,330.

ADDENDUM 004

John F. Ribeiro September 4,2013 Page 5

App. Ct. at 333 (citations omitted; emphasis added). The Sardella court adopted this remedy as the appropriate result under Massachusetts law, id., as it "best effectuate[d] the legislative objectives underlying the statute[.]" Id. at 334.J. The Supreme Judicial Court endorsed this result in Paul Sardella Const. Co., Inc. v. Braintree Housing Authority, 371 Mass. 235,243 (1976). The rule has been applied numerous times since Sardella. li, E. Amanti & Sons, Inc. v. Town of Barnstable, 42 Mass. App. Ct. 773, 778 (1997).4 We conclude that a similar implied contract is created by the chapter 23K gaming establishment licensing process. In accordance with its statutory mission, the Commission actively sought applications, in order to maximize the benefits of expanded gaming in the Commonwealth, and received eleven applications. In recognition of each applicant's payment of an initial and very substantial $400,000 application fee, plus additional amounts for investigation of its application that in the aggregate total $4.2 million to date, the Commission is bound to consider such applications in accordance with statutory and regulatory licensing procedures and criteria, and to award licenses to such applicants, if any, as the Commission in its discretion determines best meets the licensing criteria. Were the Commission not to act in accordance with this process, a damages remedy, analogous to Sardella's bid-preparation-costs remedy, would appear to be available. Of course, the analogy to the public bidding process is not perfect. The Commission enjoys a great deal more discretion in the award of licenses than does a public contracting authority in the award of a contract. The Commission need not award any licenses at all if it does not find that any of the applicants meets the statutory and regulatory standards. No court has determined whether the Commission's licensing process under G.L. c. 23K is subject to the principle, applicable to the public bidding laws, that "in matters of substance there must be strict compliance[.]" Interstate Engineering Corp., 367 Mass. at 757 (citations and internal quotations omitted). The nature of the activities being licensed by the Commission is quite different, with potentially a much greater impact on the public welfare than the award of a typical public contract. In recognition of the unique nature of the Commission's task, the Legislature has provided: "The commission shall have full discretion as to whether to issue a license. 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." G.L. c. 23K, l7(g). And "any license awarded by the commission shall be a revocable privilege and may be conditioned, suspended or revoked" on a variety of grounds. G.L. c. 13K, 1(9). Nevertheless, although no applicant has a contractual or any other right to the issuance of a Commission license, we must conclude that, in furtherance of the purposes of G.L. c. 23K,
3 Of course, where another effective remedy, such as injunctive relief to ensure the statutes are followed, is available and is in the public interest in the circumstances, an award of damages on a contract theory might well be unnecessary to further the statutory purposes.

The Appeals Court has also held that to further the purposes of the public bidding laws, a bidder injured by a public contracting authority's bad faith violation of the bidding laws may recover that bidder's lost profits. Bradford & Bigelow, Inc. v. Commonwealth, 24 Mass. App. Ct. 349,359 (1987).

ADDENDUM 005

John F. Ribeiro

September 4,2013 Page 6

parties who accepted the Commission's invitation to apply, and paid substantial application and additional investigation fees, do have an implied contractual right to Commission action on their applications in accordance with statutory and regulatory criteria. This includes a right to have the Commission issue licenses to those applicants, if any, that the Commission in its discretion determines are appropriate. Recognition of this implied contract, enforceable in a manner analogous to Sardella, furthers the declared legislative purpose of "ensuring public confidence in the integrity of the gaming licensing process" as one of "the paramount policy objective[s]" of the Commonwealth's expanded gaming law. G.L. c. 23K, 1(1). Indeed, even in contexts other than the public bidding laws, the Supreme Judicial Court has recognized that it is sometimes necessary to recognize an implied contract, enforceable through monetary relief against a state agency, in order to further the purposes of a statute. See Bates v. Director of Office of Campaign and Political Finance, 436 Mass. 144, 169-72 (2002) (citing cases). In Bates, a private party had accepted a statutory invitation to participate in a program determined to be in the public interest, and did so in reliance on the statute obligating an agency to take action in return (in the form of payments benefiting that private party). The Supreme Judicial Court, calling the statute "a complex transactional scheme that establishe[ed] an ongoing regulatory framework" between the state and private pmiies seeking the benefits of the statute, recognized the existence of an implied contract or "bargain," the agency's breach of which allowed the private party to recover damages, in order to achieve the statutory objectives. Bates, 436 Mass. at 169, 172 (referring to "bargain" entitling candidates qualifying for payments under "clean elections" law to recover dalllages for agency's non-payment); id. at 178-79 (ordering money judgment for candidate). 4. The Proposed Law's Effect on the Contracts

The law proposed by Petition No. 13-09, by prohibiting the Commission from issuing casino and slots-parlor licenses, would prevent the Commission from performing part of its implied contractual obligation: specifically, its obligation to issue licenses to those applicants, if any, it deems appropriate. 5 The proposed law would directly make the Commission's performance of the implied contract illegal. For purposes of determining whether this would result in a "taking" of applicants' contract rights, which are property, it is necessary to determine whether this prohibition on Commission action would constitute an "impairment" of those contract rights, or would merely result in an ordinary breach of contract. That question, in turn, appears to depend on whether a dalllages remedy for breach would be available to the applicants. See,~, TM Park Ave. Associates v. Pataki, 214 F.3d 344, 348-49 (2 1ld Cir. 2000); University of Hawaii Professional Assembly v. Cayetano, 188 F.3d 1096, 1102-04 (9 th Cir. 1999); HorwitzMatthews, Inc. v. City of Chicago, 78 F.3d 1248,1250-52 (7tll Cir. 1996) (Posner, c.J.). This same test has recently been applied by a federal district court in Massachusetts. Single Source,
5

The proposed law would also prohibit further gaming under such Commission licenses as may already have issued at the time the proposed law became effective in late 2014. In light of our conclusion as to the proposed law's prohibition on the issuance of licenses, we need not now determine the significance, for alt. 48 purposes, of its prohibition on further gaming under licenses already issued.

ADDENDUM 006

John F. Ribeiro September 4,2013 Page 7

Inc. v. Central Regional Tourism Dist., Inc., No. 08-40176-FDS, 2011 WL 1877700, slip op. at 13 (D. Mass. May 17,2011). Here, we conclude that the proposed law would not leave open a damages remedy against the Commission, and therefore it constitutes an impairment of contract. The Commission, if sued for breach of the implied contract referred to above, could defend on the basis that performance of the contract had, without fault of the Commission, become impossible or impracticable due to the change in law, meaning that its duty to perform had been discharged and no damages were due. See Restatement (Second) of Contracts 261, 264 (1981).6 The Commission could also defend on the basis that, according to newly-declared public policy, the issuance of gaming licenses was now prohibited. Accordingly, it would be contrary to public policy, and would not further the policy of G.L. c. 23K or any other statute, to award damages against the Commission, in the form of application costs or otherwise, for refusing to do what the statute then forbade. Cf. Sardella, 3 Mass. App. Ct. at 332-34 (reviewing statutory purposes to determine appropriate remedy for governmental breach of implied contract formed under competitive bidding statute); Bradford & Bigelow, 24 Mass. App. Ct. at 357-59 (same). Nor would the remedy of restitution, on a theory of unjust enrichment, be available to the applicants. 7 "Restitution is an equitable remedy by which a person who has been unjustly enriched at the expense of another is required to repay the injured party.... [It] is appropriate only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for [one of them] to retain it." Santagate v. Tower, 64 Mass. App. Ct. 324, 329-30 (2005) (citations and internal quotations omitted). Unjust enrichment is the "retention of money or property of another against the fundamental principles ofjustice or equity and good conscience." Id. at 329 (citations and internal quotations omitted). Where the applicants have paid
Section 261 of the Restatement provides: "Where, after a contract is made, a party's performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary." Section 264 provides: "Ifthe performance of a duty is made impracticable by having to comply with a domestic or foreign governmental regulation or order, that regulation or order is an event the non-occurrence of which was a basic assumption on which the contract was made." The drafters explain that "It is "a basic assumption on which the contract was made" that the law will not directly intervene to make performance impracticable when it is due. Therefore, if supervening governmental action prohibits a performance or imposes requirements that make it impracticable, the duty to render that performance is discharged[.]" (d. 264, comment a. "Under the rule stated in this Section, the regulation or order ... may emanate from any level of government and may be, for example, a municipal ordinance or an order of an administrative agency. Any governmental action is included ...." Id. comment b.
6 7

Counsel for the proponents of Petition No. 13-09 has suggested that where a contract is unlawful, restitution of monies paid under the contract may be ordered where one party was more at fault than the other in the contracting process. White v. President of Frankl in Bank, 22 Pick. (39 Mass.) 181, 186 (1839); see Berman v. Coakley, 243 Mass. 348, 351 (1923) (citing White). White, however, involved a contract unlawful when made, 39 Mass. at 184-unlike here where the implied contract between applicants and the Commission is lawful and would only be rendered otherwise if the proposed law were approved by the voters. Moreover, there would be no basis here to ftnd the Commission "at fault" vis-a-vis the applicants.

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John F. Ribeiro September 4,2013 Page 8

application and investigation fees to the Commission, and the Commission has spent those amounts on the purposes for which they were paid, as pmi of the licensing process that both the applicants and the Commission have an interest in fmihering, it is difficult to see how the Commission's retention of such monies (which it has spent) would be unjust. 8 Thus there is, at a minimum, serious doubt that the applicants would have an effective remedy against the Commission for its inability, based on enactment of the proposed law, to perform its contractual duty to conduct the licensing process in accordance with G.L. c. 23K. The proposed law would therefore not merely cause a breach of the contract but instead would result in its impairment. We must therefore consider whether such an impairment would be lawful under the constitutional standards for evaluating impairments of contract. If the impairment would be unlawful, it would result in a "taking" of property, meaning that Petition No. 13-09 could not be certified. 5. Analysis of "Takings" and "Impairment" Issues

In Dimino v. Secretary of the Commonwealth, 427 Mass. 704 (1998), the court ruled that an initiative petition proposing a law that would have invalidated certain bond covenants worked an uncompensated "taking" of the bondholders' "property rights" and therefore should not have been certified by the Attorney General under art. 48. The covenants pledged certain Massachusetts Turnpike Authority toll revenues as security for the repayment of $1.7 billion in bonds issued by the Authority. Id. at 705-06, 707. The proposed law would have reduced and then eliminated tolls on the Turnpike. Id. at 706. "[T]he bondholders' rights to the authority's revenue under the trust agreements are 'property' protected by art. 10," and "[t]he petition's elimination of toll revenue constitutes a full-blown appropriation of the bondholders' right to that property." Id. at 709. Because the law proposed by the petition contained no sufficiently definite method of compensating the bondholders, it was inconsistent with art. 1O's right to compensation for private property taken for public use. Id. at 71 0-11. The Dimino court did not expressly and separately analyze whether the proposed law's interference with the bondholders' contract rights would have worked an impairment of contract in violation of the federal Contracts Clause. See U.S. Const. Art. I, 10, cl. 1 ("No State shall .. . pass any ... Law impairing the Obligation of Contracts"). However, Dimino relied heavily on Opinion of the Justices, 356 Mass. 775, 793-94 (1969), where the Justices did conclude that a proposed toll freeze would be such an unconstitutional impairment. See Dimino, 427 Mass. at 709 & n.4. Thus Dimino does not mean that any proposed initiative law that abrogates a contract right constitutes a per se taking of property. Indeed, it would be odd if a minor legislative
Moreover, if the applicants' damages remedy for the Commission's breach of the implied contract would be, as in Sardella, the costs of preparing the application, then restitution of their application and investigation fees would not be an adequate remedy, because many (if not all) of the costs required to prepare a complete application would not have been paid to the Commission. For example, as part of the application process, applicants must negotiate agreements with host and surrounding communities and then work with host communities to obtain binding ballot votes approving the host community agreements. G.L. c. 23K, 15 (8), (9), (13).

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John F. Ribeiro

September 4,2013 Page 9

interference with contract rights could pass muster under the Contracts Clause, yet constitute a "taking" of "property" requiring the payment of monetary compensation under art. 10. Instead, for a legislative interference with contract rights to constitute a "taking," it must rise to the level of an unconstitutional impairment of contract. We therefore proceed to analyze whether the proposed law survives Contracts Clause scrutiny. The Supreme Court has held that a law that works a substantial impairment of a contractual relationship may nevertheless be upheld "if it is reasonable and necessary to serve an important purpose." U. S. Trust Co. v. New Jersey, 431 U.S. 1,25 (1977); see Energy Reserves Group v. Kansas Power & Light, 459 U.S. 400, 411-12 (1983), Allied Structural Steel Co. v. Spannaus, 433 U.S. 234, 244 (1978); Massachusetts Community College Council v. Commonwealth, 420 Mass. 126, 133 (1995). "The extent of impairment is certainly a relevant factor in determining its reasonableness." U.S. Trust, 431 U.S. at 27; see Allied Structural Steel, 438 U.S. at 245 ("Minimal alteration of contractual obligations may end the inquiry at its first stage. Severe impairment, on the other hand, will push the inquiry to a careful examination of the nature and purpose of the state legislation"). Also, "[a]n impairment is not a reasonable one if the problem sought to be resolved by an impairment of a contract existed at the time the contractual obligation was incurred.... If the foreseen problem has changed between the time of the contracting and the time of the attempted impairment, but has changed only in degree and not in kind, the impairment is not reasonable." Massachusetts Community College Council, 420 Mass. at 133 (citing U.S. Trust, 431 U.S. at 32).
J

Here, the extent of the impairment is very substantial. The law proposed by Petition No. 13-09 would not merely regulate or impose limits on the implied contractual gaming licensing process, but would bring it entirely to a halt. That is a strong indication of the law's "unreasonableness" in the U.S. Trust sense. Moreover, the proposed law involves an issue--the social and economic problems that might result from allowing casinos and a slots parlor in the Commonwealth--that was not merely foreseeable, but was expressly considered at length, when the Legislature, after many years of vigorous debate both inside and outside of the State House, enacted the "Act Establishing Expanded Gaming in the Commonwealth" in 2011. The Legislature assessed the merits of expanded gaming and decided that the public interest was best served by allowing a limited number of casinos and one slots parlor. We are unable to discern how the problems that might result from such expanded gaming have changed since 2011, let alone changed in kind rather than in degree. We recognize the Supreme Judicial Court's recent reaffirmation that an initiative petition, like a law enacted by the Legislature, may prohibit gaming, and that gaming license holders do not necessarily have any property interest in their licenses. Carney v. Attorney General, 451 Mass. 803, 816-17 (2008) ("Carney II"). In Carney II, the court upheld the Attorney General's certification of an initiative petition to end greyhound racing, and after rejecting the claim that the petition worked a "taking," the court added the following observation: Finally, it is worth pointing out that gambling on dog races is a heavily regulated industry that only exists by virtue of legislatively created narrow exceptions to common-

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John F. Ribeiro

September 4, 2013 Page 10

law and statutory bans and that, "because of the nature of the business[, it] can be abolished at any time that the Legislature may deem proper for the safeguarding and protection of the public welfare." Selectmen of Topsfield v. State Racing Comm'n, 324 Mass. 309, 315 (1949). "Although mere 'participat[ion] in a heavily regulated industry' does not bar a plaintiff from ever prevailing on a takings claim, . .. it does greatly reduce the reasonableness of expectations and reliance on regulatory provisions." Carney II, 451 Mass. at 817. Of course, by the time Carney II was decided in 2008, participants in the dog racing industry had long been on notice that there were serious voter efforts to abolish dog racing. A proposal to do so appeared on the ballot in 2000 and was defeated by a margin of less than two percent. See 2000 Massachusetts Elections Statistics, Pub. Doc. No. 43, at 542. Another proposal to do so garnered enough signatures to appear on the 2006 ballot, but the petition was invalidated on grounds unrelated to any takings claim. See Carney v. Attorney General, 447 Mass. 218 (2008) ("Carney I"). The petition at issue in Carney II was thus the third, and ultimately successful, effort to prohibit dog racing involving wagering. The expectations of participants in that industry, as of2008, must be viewed in that context. Thus we do not read Carney II to hold that participants in the heavily regulated gaming industry can never have any reasonable expectations or any reasonable reliance on regulatory provisions. Here, to be sure, applicants for gaming licenses will have no property rights in any licenses they may receive at the end of the application process. But the Commission, properly acting pursuant to G.L. c. 23K as directed by the 2011 Legislature, has invited applicants to apply for licenses, and has accepted millions of dollars from applicants for the purpose of evaluating those applications. The applicants do have a reasonable expectation, and indeed an implied contractual right, that the application process itself will play out in accordance with G.L. c.23K. They have a reasonable expectation that the Commission will remain legally free to award licenses to such applicants as it deems appropriate, as the Legislature envisioned less than two years ago when it legalized casinos and a slots parlor. That the Legislature (or the voters) may abolish legalized gaming at any time does not necessarily imply that the Legislature (or the voters), after inducing private parties to act, can suddenly reverse course without any adverse legal consequences for the Commonwealth. The Legislature could indeed abolish gaming, if it determined that the benefits of doing so outweighed the legal and other costs, but art. 48 does not allow the voters to do so at this time. 9 For the foregoing reasons, the law proposed by Petition No. 13-09 would impair applicants' implied contractual rights in violation of the Contracts Clause, and because it makes

If the Legislature were to pass a law such as is proposed by Petition No. 13-09, our conclusion here necessarily implies that such a law could be challenged in court and invalidated as an unconstitutional impairment of contract. That would leave the way open for applicants to sue for damages if the Commission did not follow through with the licensing process. Alternatively, the Legislature could pass a law that telminated the licensing process but allowed for payment of appropriate amounts to applicants. Under art. 48, however, these options are unavailable to the people via an initiative petition--the first because it would result in a taking of property, as discussed above, and the second because it would almost certainly require making a "specific appropriation of money from the treasury of the commonwealth," which an initiative petition may not do. See art. 48, Init., Pt, 2, 2.

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John F. Ribeiro

September 4,2013 Page 11

no provision for compensation, it would violate art. 10's right "to receive compensation for private property appropriated to public use." We are therefore unable to certify the petition under art. 48. Very truly yours,

~~
Peter Sacks State Solicitor 617-963-2064 cc: William Francis Galvin, Secretary of the Commonwealth

ADDENDUM 011

CONSTITUTION OF MASSACHUSETTS - UNINTEGRATED.

ART. XLVIII. Initiative and referendum.

I.

Definition.

Legislative power shall continue to be vested in the general court; but the people reserve to themselves the popular initiative, which is the power of a specified number of voters to submit constitutional amendments and laws to the people for approval or rejection; and the popular referendum, which is the power of a specified number of voters to submit laws, enacted by the general court, to the people for their ratification or rejection.
THE INITIATIVE.

II.

Initiative Petitions.

SECTION 1. Contents. - An initiative petition shall set forth the full text of the constitutional amendment or law, hereinafter designated as the measure, which is proposed by the petition. SECTION 2. Excluded Matters. - No measure that relates to religion, religious practices or religious institutions; or to the appointment, qualification, tenure, removal, recall or compensation of judges; or to the reversal of a judicial decision; or to the powers, creation or abolition of courts; or the operation of which is restricted to a particular town, city or other political division or to particular districts or localities of the commonwealth; or that makes a specific appropriation of money from the treasury of the commonwealth, shall be proposed by an initiative petition; but if a law approved by the people is not repealed, the general court shall raise by taxation or otherwise and shall appropriate such money as may be necessary to carry such law into effect.

Neither the eighteenth amendment of the constitution, as approved and ratified to take effect on the first day of October in the year nineteen hundred and eighteen, nor this provision for its protection, shall be the subject of an initiative amendment. No proposition inconsistent with any one of the following rights of the individual, as at present declared in the declaration of rights, shall be the subject of an initiative or referendum petition: The right to receive compensation for private property appropriated to public use; the right of access to and protection in courts of justice; the right of trial by jury; protection from unreasonable search, unreasonable bail and the law martial; freedom of the press; freedom of speech; freedom of elections; and the right of peaceable assembly. No part of the constitution specifically excluding any matter from the operation of the popular initiative and referendum shall be the subject of an initiative petition; nor shall this section be the subject of such a petition.

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CONSTITUTION OF MASSACHUSETTS - UNINTEGRATED. Amend. Art. 48

The limitations on the legislative power of the general court in the constitution shall extend to the legislative power of the people as exercised hereunder. [SECTION 3. Mode of Originating. - Such petition shall first be signed by ten qualified voters of the commonwealth and shall then be submitted to the attorneygeneral, and if he shall certify that the measure is in proper form for submission to the people, and that it is not, either affirmatively or negatively, substantially the same as any measure which has been qualified for submission or submitted to the people within three years of the succeeding first Wednesday in December and that it contains only subjects not excluded from the popular initiative and which are related or which are mutually dependent, it may then be filed with the secretary of the commonwealth. The secretary of the commonwealth shall provide blanks for the use of subsequent signers, and shall print at the top of each blank a description of the proposed measure as such description will appear on the ballot together with the names and residences of the first ten signers. All initiative petitions, with the fir:lt ten signatures attached, shall be filed with the secretary of the commonwealth not earlier than the first Wednesday of the September before the assembling of the general court into which they are to be introduced, and the remainder of the required signatures shall be filed not later than the first Wednesday of the following December.]
Annulled and superseded by Amendments, Art. LXXIV, Sec.
1.

SECTION 4. Transmission to the General Court. - If an initiative petition, signed by the required number of qualified voters, has been filed as aforesaid, the secretary of the commonwealth shall, upon the assembling of the general court, transmit it to the clerk of the house of representatives, and the proposed measure shall then be deemed to be introduced and pending.

III.

Legislative Action. General Provisions.

SECTION 1. Reference to Committee. - If a measure is introduced into the general court by initiative petition, it shall be referred to a committee thereof, and the petitioners and all parties in interest shall be heard, and the measure shall be considered and reported upon to the general court with the committee's recommendations, and the reasons therefor, in writing. Majority and minority reports shall be signed by the members. of said committee. SECTION 2. Legislative Substitutes. - The general court may, by resolution passed by yea and nay vote, either by the two houses separately, or in the case. of a constitutional amendment by a majority of those voting thereon in joint session in each of two years as hereinafter provided, submit to the people a substitute for any measure introduced by initiative petition, such substitute to be designated on the ballot as the legislative substitute for such an initiative measure and to be grouped with it as an alternative therefor.

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CONSTITUTION OF MASSACHUSETTS - UNINTEGRATED. Amend. Art. 48

IV. Legislative Action on Proposed Constitutional Amendments.

SECTION 1. Definition. - A proposal for amendment to the constitution introduced into the general court by initiative petition shall be designated an initiative amendment, and an amendment introduced by a member of either house shall be designated a legislative substitute or a legislative amendment. [SECTION 2. Joint Session. - If a proposal for a specific amendment of the constitution is introduced into the general court by initiative petition signed by not less than twenty-five thousand qualified voters, or if in case of a proposal for amendment introduced into the general court by a member of either house, consideration thereof in joint session is called for by vote of either house, such proposal shall, not later than the second Wednesday in June, be laid before a joint session of the two houses, at which the president of the senate shall preside; and if the two houses fail to agree upon a time for holding any joint session hereby required, or fail to continue the same from time to time until final action has been taken upon all amendments pending, the governor shall call such joint session or continuance thereof.]
Annulled and superseded by Amendments, Art. LXXXI, Sec. 1.

SECTION 3. Amendment of Proposed Amendments. - A proposal for an amendment to the constitution introduced by initiative petition shall be voted upon in the form in which it was introduced, unless such amendment is amended by vote of three-fourths of the members voting thereon in joint session, which vote shall be taken by call of the yeas and nays if called for by any member. SECTION 4. Legislative Action. - Final legislative action in the joint session upon any amendment shall be taken only by call of the yeas and nays, which shall be entered upon the journals of the two houses; and an unfavorable vote at any stage preceding final action shall be verified by call of the yeas and nays, to be entered in like manner. At such joint session a legislative amendment receiving the affirmative votes of a majority of all the members elected, or an initiative amendment receiving the affirmative votes of not less than one-fourth of all the members elected, shall be referred to the next general court. SECTION 5. Submission to the People. - If in the next general court a legislative amendment shall again be agreed to in joint session by a majority of all the members elected, or if an initiative amendment or a legislative substitute shall again receive the affirmative votes of at least one-fourth of all the members elected, such fact shall be certified by the clerk of such joint session to the secretary of the commonwealth, who shall submit the amendment to the people at the next state election. Such amendment shall become part of the constitution if approved, in the case of a legislative amendment, by a majority of the voters voting thereon, or if approved, in the case of an initiative amendment or a legislative substitute, by voters in number to at least thirty per cent of the total number of ballots cast at state election and also by a majority of the voters voting on such amendment.

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CONSTITUTION OF MASSACHUSETTS - UNINTEGRATED. Amend. Art. 48

V. Legislative Action on Proposed Laws.

[SECTION 1. Legislative Procedure. - If an initiative petition for a law is introduced into the general court, signed by not less than twenty thousand qualified voters, a vote shall be taken by yeas and nays in both houses before the first Wednesday of June upon the enactment of such law in the form in which it stands in such petition. If the general court fails to enact such law before the first Wednesday of June, and if such petition is completed by filing with the secretary of the commonwealth, not earlier than the first Wednesday of the following July nor later than the first Wednesday of the following August, not less than five thousand signatures of qualified voters, in addition to those signing such initiative petition, which signatures must have been obtained after the first Wednesday of June aforesaid, then the secretary of the commonwealth shall submit such proposed law to the people at the next state election. If it shall be approved by voters equal in number to at least thirty per cent of the total number of ballots cast at such state election and also by ll majority of the voters voting on such law, it shall become law, and shall take effect in thirty days after such state election or at such time after such election as may be provided in such law.)

Annulled and superseded by Amendments, Art. LXXXI, Sec. 2.

[SECTION 2. Amendment by Petitioners. - If the general court fails to pass a proposed law before the first Wednesday of June, a majority of the first ten signers of the initiative petition therefor shall have the right, subject to certification by the attorney-general filed as hereinafter provided, to amend the measure which is the subject of such petition. An amendment so made shall not invalidate any signature attached to the petition. If the measure so amended, signed by a majority of the first ten signers, is filed with the secretary of the commonwealth before the first Wednesday of the following July, together with a certificate signed by the attorneygeneral to the effect that the amendment made by such proposers is in his opinion perfecting in its nature and does not materially change the substance of the measure, and if such petition is completed by filing with the secretary of the commonwealth, not earlier than the first Wednesday of the following July nor later than the first Wednesday of the following August, not less than five thousand signatures of qualified voters, in addition to those signing such initiative petition, which signatures must have been obtained after the first Wednesday of June aforesaid, then the secretary of the commonwealth shall submit the measure to the people in its amended form.)

Annulled and superseded by Amendments, Art. LXXXI, Sec. 3.

VI.

Conflicting and Alternative Measures.

If in any judicial proceeding, provisions of constitutional amendments or of laws approved by the people at the same election are held to be in conflict, then the provisions contained in the measure that received the largest number of affirmative votes at such election shall govern.

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CONSTITUTION OF MASSACHUSETTS - UNINTEGRATED. Amend. Art. 48

A constitutional amendment approved at any election shall govern any .Jaw approved at the same election. The general court, by resolution passed as hereinbefore set forth, may provide for grouping and designating upon the ballot as conflicting measures or as alternative measures, only one of which is to be adopted, any two or more proposed constitutional amendments or laws which have been or may be passed or qualified for submission to the people at any one election: provided, that a proposed constitutional amendment and a proposed law shall not be so grouped, and that the ballot shall afford an opportunity to the voter to vote for each of the measures or for only one of the measures, as may be provided in said resolution, or against each of the measures so grouped as conflicting or as alternative. In case more than one of the measures so grouped shall receive the vote required for its approval as herein provided, only that one for which the largest affirmative vote was cast shall be deemed to be approved.
THE REFERENDUM.

I.

When Statutes shall take Effect.

No law passed by the general court shall take effect earlier than ninety days after it has become a law, excepting laws declared to be emergency laws and laws which may not be made the subject of a referendum petition, as herein provided.

II.

Emergency Measures.

A law declared to be an emergency law shall contain a preamble setting forth the facts constituting the emergency, and shall contain the statement that such law is necessary for the immediate preservation of the public peace, health, safety or convenience. [A separate vote shall be taken on the preamble by call of the yeas and nays, which shall be recorded, and unless the preamble is adopted by two-thirds of the members of each house voting thereon, the law shall not be an emergency ,law; but] if the governor, at any time before the election at which it is to be submitted to the people on referendum, files with the secretary of the commonwealth a statement declaring that in his opinion the immediate preservation of the public peace, health, safety or convenience requires that such law should take effect forthwith and that it is an emergency law and setting forth the facts constituting the emergency, then such law, if not previously suspended as hereinafter provided, shall take effect without suspension, or if such law has been so suspended such suspension shall thereupon terminate and such law. shall thereupon take effect: but no grant of any franchise or amendment thereof, or renewal or extension thereof for more than one year shall be declared to be an emergency law.
Provision as to yea and nay vote on emergency preamble annulled and superseded by Amendments, Art. LXVII.

III. Refe1endum Petitions.

. SECTION 1. Contents. - A referendum petition may ask for a referendum to the : pople upon any law enacted by the general court which is not herein expressly ex. 1:uded, ADDENDUM 016

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CONSTITUTION OF MASSACHUSETTS - UNINTEGRATED.

Amend. Art.48

SECTION 2. Excluded Matters. - No law that relates to religion, religious practices or religious institutions; or to the appointment, qualification, tenure, removal or compensation of judges; or to the powers, creation or abolition of courts; or the operation of which is restricted to a particular town, city or other political division or to particular districts or localities of the commonwealth; or that appropriates money for the current or ordinary expenses of the commonwealth or for any of its departments, boards, commissions or institutions shall be the subject of a referendum petition. SECTION 3. Mode of Petitioning for the Suspension of a Law and a Referendum thereon. - A petition asking for a referendum on a law, and requesting that the operation of such law be suspended, shall first be signed by ten qualified voters and shall then be filed with the secretary of the commonwealth not later than thirty days after the law that is the subject of the petition has become law. [The secretary of the commonwealth shall provide blanks for the use of subsequent signers, and shall print at the top of each blank a description of the proposed law as such description will appear on the ballot together with the names and residences of the first ten signers.) [If such petition is completed by filing with the secretary of the commonwealth not later than ninety days after the law which is the subject of the petition has become law the signatures of not less than fifteen thousand qualified voters of the commonwealth, then the operation of such law shall be suspended, and the secretary of the commonwealth shall submit such law to the people at the next state election, if thirty days intervene between the date when such petition is filed with the secretary of the commonwealth and the date for holding such state election; if thirty days do not so intervene, then such law shall be submitted to the people at the next following state election, unless in the meantime it shall have been repealed; and if it shall be approved by a majority of the qualified voters voting thereon, such law shall, subject to the provisions of the constitution, take effect in thirty days after such election, or at such time after such election as may be provided in such law; if not so approved such law shall be null and void; but no such law shall be held to be disapproved if the negative vote is less than thirty per cent of the total number of ballots cast at such state election.)
Annulled and superseded by Amendments, Arts. LXXIY, Sec. 2 and LX:XXI, Sec. 4.

SECTION 4. Petitions for Referendum on an Emergency Law or a Law the Suspension of which is not asked for. - A referendum petition may ask for the repeal of an emergency law or of a law which takes effect because the referendum petition does not contain a request for suspension, as aforesaid. Such petition shall first be signed by ten qualified voters of the commonwealth, and shall then be filed with the secretary of the commonwealth not later than thirty days after the law which is the subject of the petition has become law. [The secretary of the commonwealth shall provide blanks for the use of subsequent signers, and shall print at the top of each blank a description of the proposed law as such description will appear on the ballot together with the names and residences of the first ten signers.] [If such petition filed as aforesaid is completed by filing with the secretary of the commonwealth not later than .ninety days after the law which is the subject of the petition has become
177

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CONSTITUTION OF MASSACHUSETTS - UNINTEGRATED.

Amend. Art. 48

law the signatures of not less than ten thousand qualified voters of the commonwealth protesting against such law and asking for a referendum thereon, then the secretary of the commonwealth shall submit such law to the people at the next state election, If thirty days intervene between the date when such petition is filed with the. secretary of the commonwealth and the date for holding such state election. If thil.'ty days do not so intervene, then it shall be submitted to the people at the next foHoW:ifig state election, unless in the meantime it shall have been repealed; and if it shall not be approved by a majority of the qualified voters voting thereon, it shall, at the expiration of thirty days after such election, be thereby repealed; but no such law shall be held to be disapproved if the negative vote is less than thirty per cent of the total number of ballots cast at such state election.]
Annulled and superseded by Amendments, Arts. LXXIY, Sec. 3 and LXX:XI, Sec. 5.
GENERAL PROVISIONS.

I.

I dentijication and Certification of Signatures.

Provision shall be made by law for the proper identification and certification of signatures to the petitions hereinbefore referred to, and for penalties for signing any such petition, or refusing to sign it, for money or other valuable consideration, and for the forgery of signatures thereto. Pending the passage of such legislation all provisions of law relating to the identification and certification of signatures to petitions for the nomination of candidates for state offices or to penalties for the forgery of such signatures shall apply to the signatures to the petitions herein referred to. The general court may provide by law that no co-partnership or corporation shall undertake for hire or reward to circulate petitions, may require individuals who circulate petitions for hire or reward to be licensed, and may make other reasonable regulations to prevent abuses arising from the circulation of petitions for hire or reward. II. Limitation on Signatures. Not more than one-fourth of the certified signatures on any petition shall be those of registered voters of any one county.
[III. Form of Ballot.

Each proposed amendment to the constitution, and each law submitted to the people, shall be described on the ballots by a description to be determined by the attorney-general, subject to such provision as may be made by law, and the secretary of the commonwealth shall give each question a number and cause such question, except as otherwise authorized herein, to be printed on the ballot in the following form:In the case of an amendment to the constitution: Shall an amendment to the constitution (here insert description, and state, in distinctive type, whether approved or disapproved by the general court, and by what vote thereon) be approved?

[YESTl
~
ADDENDUM 018

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CONSTITUTION OF MASSACHUSETTS - UNINTEGRATED.

Amend.Ait.49

In the case of a law: Shall a law (here insert description, and state, in distinctive type, whether approved or disapproved by the general court, and by what vote thereon) be approved?
Anulled and superseded by Amendments, Ai:t. LXXIV, Sec. 4.

fYE8.[J

[IV. Information for Voters.

The secretary of the commonwealth shall cause to be printed and sent to each registered voter in the commonwealth the full text of every measure to be submitted to the people, together with a copy of the legislative committee's majority and minority reports, if there be such, with the names of the majority and minority members thereon, a statement of the votes of the general court on the measure, and a description of the measure as such description will appear on the ballot; and shall, in such manner as may be provided by law, cause to be prepared and sent to the vpters otber information and arguments for and against the measure.)
Annulled and superseded by Amendments, Art. CVIII.

V. The veto Power of the Governor.

The veto power of the governor shall not extend to measures approved by the people.
For further provisions as to veto power of governo1; see Patt the Second, Chap. I, Sec. I, Art. II and Amendments, Art.XC.

VI.

The General Court's Power of Repeal.

Subject to the veto power of the governor and to the right of referendum by petition as herein provided, the general court may amend or repeal a law approved by the people.

VII. Amendment Declared to be Self-executing.

This article of amendment to the constitution is self-executing, but legislation not inconsistent with anything herein contained may be enacted to facilitate the operation of its provisions.

VIII.

Articles IX and XLII of Amendments of the Constitution Annulled.

Article IX and Article XLII of the amendments of the constitution are hereby annulled.

179

ADDENDUM 019

23K:3

GAMING COMMISSION

[Chap. 23K]

(l) The commission shall require a prospective employee to: (i) submit an application and a personal disclosure on a form prescribed by the commission which shall include a complete criminal history, including convictions and current charges for all felonies and misdemeanors; (ii) undergo testing which detects the presence of illegal substances in the body; (iii) provide fingerprints and a photograph consistent with standards adopted by the state police; and (iv) provide authorization for the commission to conduct a credit and background check. The commission shall verify the identification, employment and education of each prospective employee, including: (i) legal name, including any alias; (ii) all secondary and post secondary educational institutions attended regardless of graduation status; (iii) place of residence; and (iv) employment history. The commission shall not hire a prospective employee if the prospective employee has: (i) been convicted of a felony; (ii) been convicted of a misdemeanor more than 10 years prior to the prospective employee's ap1008

135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150

ADDENDUM 020

[Chap. 23Kl

GAMING COMMISSION

23K:3

plication that, in the discretion of the commission, bears a close relationship to the duties and responsibilities of the position for which employment is sought; (iii) been dismissed from prior employment for gross misconduct or incompetence; or (iv) intentionally made a false statement concerning a material fact in connection with the prospective employee's application to the commission. If an employee of tbe commission is charged with a felony while employed by the commission, the commission shall suspend the employee, with or without pay, and terminate employment with the commission upon conviction. If an employee of the commission is charged with a misdemeanor while employed by the commission, the commission shall suspend the employee, with or without pay, and may terminate employment with the commission upon conviction if, in the discretion of the commission, the offense for which the employee has been convicted bears a close relationship to the duties and responsibilities of the position held with the commission.

151 152 153 154 155 156 157 158 159 160 161 162 163 164 165

.;.

-_;

i-

. 1009

ADDENDUM 021

[Chap. 23KJ

GAMING COMMISSION

23K:10

23K:10. Minimum capital investment for category 1 license; penalty for failure to timely begin gaming operations; determination of date for opening for business; licensing and renewal fees; continuing assessment of capitalization of licensee Section 10. (a) The commission shall set the minimum capital investment for a category 1 license; provided, however, that a gaming licensee shall make a capital investment of not less than $500,000,000 into the gaming establishment which shall include, but not be limited to, a gaming area, at least 1 hotel and other amenities as proposed in the application for a category 1 license; and provided further, that the commission shall determine whether it will include the purchase or lease price of the land where the gaming establishment will be located or any infrastructure designed to support the site including, but not limited to, drainage, utility support, roadways, interchanges, fill and soil or groundwater or surface water contamination issues, whether or not the applicant is an eligible owner or operator under chapter 21E and has suitable capital to finance its operations and the proposed capital investment. Upon award of a gaming license by the commission, the applicant shall be required to deposit 10 per cent of the total investment proposed in the application into an interest-bearing account. Monies received from the applicant shall be held in escrow until the final stage of construction, as detailed in the timeline of construction submitted with the licensee's application and approved by the commission, at which time the deposit shall be returned to the applicant to be applied for the final stage. Should the applicant be 1021 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

ADDENDUM 022

231{:10

GAMING COMMISSION

[Chap. 23K] 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64

unable to complete the gaming establishment, the deposit shall be forfeited to the commonwealth. In place of a cash deposit, the commission may allow for an applicant to secure a deposit bond insuring that 10 per cent of the proposed capital investment shall be forfeited to the commonwealth if the applicant is unable to complete the gaming establishment. (b) A licensee who fails to begin gaming operations within 1 year after the date specified in its construction timeline, as approved by the commission, shall be subject to suspension or revocation of the gaming Iicense by the commission and may, after being found by the commission after a hearing to have acted in bad faith in its application, be assessed a fine of up to $50,000,000. (c) An applicant for a category 1 license shall submit its proposed capita! investment with its application to the commission which shall include stages of construction of the gaming establishment and the deadline by which the stages and overall construction and any infrastructure improvements will be completed. In awarding a category 1 license, the commission shall determine at what stage of construction a licensee shall be approved to open for business; provided, however, that a licensee shall not be approved to open for business until the commission has determined that at least the gaming area and other ancillary entertainment services and non-gaming amenities, as required by tbe commission, have been built and are of a superior quality as set forth in the conditions of licensure; and provided further, that total infrastructure improvements onsite and around the vicinity of the gaming establishment, including projects to account for traffic mitigation as determined by the commission, shall be completed before the gaming establishment shall be approved for opening by the commission. The commission shall not_ approve a gaming establishment to open for business before the completion of the permanent gaming area. (d) The commission shall determine the minimum licensing fee for each region, which shall not be less than $85,000,000, to be paid by a category 1 licensee within 30 days after the award of the license. The Jicense shall set forth the conditions to be satisfied by the licensee before the gaming establishment shall be opened to the public. The commission shall set any renewal fee for such license based on the cost of fees associated with the evaluation of a category 1 licensee under this chapter which shall be deposited into the Gaming Revenue Fund. Such renewal fee shall be exclusive of any subsequent licensing fees under this section. (e) The commission shall determine the sources and total amount of an applicant's proposed capitalization to develop, construct, maintain and operate a proposed gaming establishment under this chapter. Upon award of a gaming license, the commission shall continue to assess the capitalization of a licensee for the duration of construction of the proposed gaming establishment and the term of the license. 1022

ADDENDUM 023

[Chap. 23KJ

GAMING COMMISSION

23K:12

23K:11. Minimum capital investment for category 2 license; licensing fee; continuing assessment of capitalization of licensee Section 11. (a) The commission shall set the minimum capital investment for a category 2 license; provided, however, that the gaming lieensee shall make a capital investment of not less than $125,000,000 into the gaming establishment, which shall include, but not be limited to, a gaming area or other amenities as proposed in the application for a category 2 license; and provided further, that the commission shall determine whether it will include the purchase or lease price of the land where the gaming establishment will be located or any infrastructure designed to support the site, including, but not limited to, drainage, utility support, roadways, interchanges, fill and soil or groundwater or surface water contamination issues, whether or not the applicant is an eligible owner or operator under chapter 21E and has suitable capital to finance its operations and the proposed capital investment. The investment required under this section shall be made within 2 years after receiving a gaming license; provided, however, that any infrastructure improvements necessary to increase visitor capacity and account for traffic mitigation shall not be considered part of the required capital investment and, as determined by the commission, shall be completed before the category 2 lieensee shall be authorized to operate a slot machine at the gaming establishment. (b) The commission shall determine the minimum licensing fee for a category 2 licensee, which shall not be less than $25,000,000 to be paid within 30 days after the award of the license. (c) Upon award of a category 2 license, the commission shall continue to assess the capitalization of a licensee for the duration of construction of the proposed gaming establishment and the term of the gaming Iicense. 23K:12. Investigation into suitability of applicant for gaming license Section 12. (a) Upon receipt of an application for a gaming license, the commission shall instruct the bureau to commence an investigation into the suitability of the applicant. In evaluating the suitability of the applicant, the commission shall consider the overall reputation of the applicant including, without limitation: (1) the integrity, honesty, good character and reputation of the applicant; (2) the financial stability, integrity and background of the applicant; (3) the business practices and the business ability of the applicant to establish and maintain a successful gaming establishment; (4) whether the applicant has a history of compliance with gaming Iicensing requirements in other jurisdictions; 1023 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

ADDENDUM 024

23K:12

GAMING COMMISSION

[Chap. 23K] 13 14

(5) whether the applicant, at the time of application, is a defendant in litigation involving its business practices; (6) the suitability of all parties in interest to the gaming license, including affiliates and close associates and the financial resources of the applicant; and (7) whether the applicant is disqualified from receiving a license under section 16; provided, however, that in considering the rehabilitation of an applicant for a gaming license, the commission shall not automatically disqualify an applicant if the applicant affirmatively demonstrates, by clear and convincing evidence, that the applicant has financial responsibility, character, reputation, integrity and general fitness as such to warrant belief by the commission that the applicant will act honestly, fairly, soundly and efficiently as a gaming licensee. (b) If the bureau determines during its investigation that an applicant has failed to: (i) establish the applicant's integrity or the integrity of any affiliate, close associate, financial source or any person required to be qualified by the commission; (ii) demonstrate responsible business practices in any jurisdiction; or (iii) overcome any other reason, as determined by the commission, as to why it would be injurious to the interests of the commonwealth in awarding the applicant a gaming license, the bureau shall cease any further review and recommend that the commission deny the application. (c) If the bureau has determined that an applicant is suitable to receive a gaming license, the bureau shall recommend that the commission commence a review of the applicant's entire application.

15
16 17

18 19

20
21 22 23
24

25 26
27

28 29 30
31 32 33 34 35 36 37

23K:13. Establishment of qualification for licensure by clear and convincing evidence; duty to cooperate in inquiry or investigation; willful provision of false or misleading information Section 13. (a) An applicant for a gaming license, and any person required by the commission to be qualified for licensure, shall establish its individual qualifications for licensure to the commission by clear and convincing evidence. (b) An applicant, licensee, registrant or any other person who shall be qualified under this chapter shall have the continuing duty to provide any assistance or information required by the commission and to cooperate in any inquiry or investigation conducted by the commission. Refusal to answer or produce information, evidence or testimony by an applicant, licensee, registrant or other person required to be qualified under this chapter may result in denial of the application or suspension or revocation of the license or registration by the commission. (c) No applicant, licensee, registrant or person required to be qualified under this chapter shall willfully withhold information from, or knowingly
1024

1 2 3 4 5 6 7 8 9 10 11 12 13 14

ADDENDUM 025

[Chap. 23K]

GAMING COMMISSION

23K:14 15 16 17 18 19 20 21

give false or misleading information to, the commission. If the commission determines that an applicant, or a close associate of an applicant, has willfully provided false or misleading information, such applicant shall not be eligible to receive a license under this chapter. Any licensee or other person required to be qualified for licensure under this chapter who willfully provides false or misleading information shall have its Iicense conditioned, suspended or revoked by the commission.

1025

ADDENDUM 026

23K:14

GAMING COMMISSION

[Chap. 23K)

23K:l5. Criteria for eligibility to receive gaming license

Section 15. No applicant shall be eligible to receive a gaming license unless the applicant meets the following criteria and clearly states as part of an application that the applicant shall: 1026

1 2 3

ADDENDUM 027

[Chap. 23K]

GAMING COMMISSION

23K:15

(1) agree to be a licensed state lottery sales agent under chapter 10 to sell or operate the lottery, multi-jurisdictional and keno games; demonstrate that the lottery and keno games shall be readily accessible to the guests of the gamiug establishment and agree that, as a condition of its license to operate a gaming establishment, it will not create, promote, operate or sell games that are similar to or in direct competition, as determined by the commission, with games offered by the state lottery commission, including the lottery instant games or its lotto style games such as keno or its multi-jurisdictional games; (2) in accordance with the design plans submitted with the licensee's application to the commission, invest not less than the required capital under this chapter iuto the gaming establishment; (3) own or acquire, within 60 days after a license has been awarded, the land where the gaming establishment is proposed to be constructed; provided, however, that ownership of the land shall include a tenancy for a term of years under a lease that extends not less than 60 years beyond the term of the gaming license issued under this chapter; (4) meet the licensee deposit requirement; (5) demonstrate that it is able to pay and shall commit to paying the gaming licensing fee; (6) demonstrate to the commission how the applicant proposes to address lottery mitigation, compulsive gambling problems, workforce development and community development and host and surrounding community impact and mitigation issues as set forth in the memoranda of understanding required under this chapter; (7) identify the infrastructure costs of the host and surrounding communities incurred in direct relation to the construction and operation of a gaming establishment and commit to a community mitigation plan for those communities; (8) provide to the commission a signed agreement between the host community and the applicant setting forth the conditions to have a gaming establishment located within the host community; provided, however, that the agreement shall include a community impact fee for the host community and all stipulations of responsibilities between the host community and the applicant, including stipulations of known impacts from the development and operation of a gaming establishment; (9) provide to the commission signed agreements between the surrounding communities and the applicant setting forth the conditions to have a gaming establishment located in proximity to the suJTounding communities and documentation of public outreach to those surrounding communities; provided, however, that the agreement shall include a community impact fee for each surrounding community and all stipulations of responsibilities between each surrounding community and the applicant, 1027

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

ADDENDUM 028

23K:15

GAMING COMMISSION

[Chap. 23K] 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74
%

including stipulations of known impacts from the development and operation of a gaming establishment; (10) provide to the commission signed agreements between the impacted live entertainment venues and the applicant setting forth the conditions to have a gaming establishment located in proximity to the impacted live entertainment venues; provided, however, that the agreement shall include, but not be limited to, terms relating to cross marketing, coordination of performance schedules, promotions and ticket prices; (11) pay to the commission a nonrefundable application fee of $400,000 to defray the costs associated with the processing of the application and investigation of the applicant; provided, however, that if the costs of the investigation exceed the initial application fee, the applicant shall pay the additional amount to the commission within 30 days after notification of insufficient fees or the application shall be rejected; and provided further, that not less than $50,000 of the application fee shall be used to reimburse the host and surrounding municipalities for the cost of determining the impact of a proposed gaming establishment and for negotiating community mitigation impact agreements; (12) comply with state and local building codes and local ordinances and bylaws, including sections 61 to 62H, inclusive, of chapter 30; (13) have received a certified and binding vote on a ballot question at an election in the host community in favor of such license; provided, however that a request for an election shall take place after the signing of an agreement between the host community and the applicant; provided further, that upon receipt of a request for an election, the governing body of the municipality shall call for the election to be held not less than 60 days but not more than 90 days from the date that the request was received; provided further, that the signed agreement between the host community and the applicant shall be made public with a concise summary, approved by the city solicitor or town counsel, in a periodical of general circulation and on the official website of the municipality not later than 7 days after the agreement was signed by the parties; provided further, that the agreement and summary shall remain on the website until the election has been certified; provided further, that the municipality that holds an election shall be reimbursed for its expenses related to the election by the applicant within 30 days after the election; provided further, that the commission shall deny an application for a gaming license if the applicant has not fully reimbursed the community; provided further, that, for the purposes of this clause, unless a city opts out of this provision by a vote of the local governing body, if the gaming establishment is proposed to be located in a city with a population of at least 125,000 residents as enumerated by the most recent enumerated federal census, "host community" shall mean the ward in which the gaming establishment is to be located for the purpose of receiving a certified 1028

76 77 78 79 80 81 82 83 84 85 86 87 88 89 90

ADDENDUM 029

[Chap. 23K]

GAMING COMMISSION

23K:l5 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109
110 111 112 113 114 115

and binding vote on a ballot question at an election; provided further, that, upon the signing of an agreement between the host community and the applicant and upon the request of the applicant, the city or town clerk shall set a date certain for an election on the ballot question in the host community; provided further, that at such election, the question submitted to the voters shall be worded as follows: "Shall the (city/ town) of permit the operation of a gaming establishment licensed by the Massachusetts Gaming Commission to be located at __ [description of site]_ _ ? YES _ _ NO _ _ " ; provided further, that the ballot question shall be accompanied by a concise summary, as determined by the city solicitor or town counsel; provided further, that if a majority of the votes cast in a host community in answer to the ballot question is in the affirmative, the host community shall be taken to have voted in .favor of the applicant's license; provided further, that, if the ballot question is voted in the negative, the applicant shall not submit a new request to the governing body within 180 days of the last election; and provided further, that a new request shall be accompanied by an agreement between the applicant and host community signed after the previous election; provided further, that if a proposed gaming establishment is situated in 2 or more cities or towns, the applicant shall execute an agreement with each host community, or a joint agreement with both communities, and receive a certified and binding vote on a ballot question at an election held in each host community in favor of such a license; (14) provide a community impact fee to the host community; (15) formulate for commission approval and abide by a marketing program by which the applicant shall identify specific goals, expressed as an overall program goal applicable to the total dollar amount of contracts, for utilization of: (i) minority business enterprises, women business enterprises and veteran business enterprises to participate as contractors in the design of the gaming establishment; (ii) minority business enterprises, women business enterprises and veteran business enterprises. to participate as contractors in the construction of the gaming establishment; and (iii) minority business enterprises, women business enterprises and veteran business enterprises to participate as vendors in the provision of goods and services procured by the gaming establishment and any businesses operated as part of the gaming establishment; and (16) formulate for commission approval and abide by an affirmative action program of equal opportunity whereby the applicant establishes specific goals for the utilization of minorities, women and veterans on construction jobs; provided, however, that such goals shall be equal to or greater than the goals contained in the executive office for administration and finance Administration Bulletin Number 14. In furtherance of specific goals for the utilization of minorities, women and veterans on construction jobs, the licensee shall send to each labor unio.n or repr?s~n tative of workers with which the applicant has a collective bargammg 1029

116
117 118 119

120 121 122 123 124

125

126
127 128 129

130
131

132
133 134

135

ADDENDUM 030

23K:15

GAMING COMMISSION

[Chap. 23K]
136 137

agreement or other contract or understanding, a notice advising the labor union or workers' representative of the applicant's commitments.

1030

ADDENDUM 031

23K:17

GAMING COMMISSION

[Chap. 23K]

(g) The commission shall have full discretion as to whether to issue a license. Applicants shall have no legal right or privilege to a gaming Iicense and shall not be entitled to any further review if denied by the commission. 23K:18. Objectives to be advanced in determining granting of license; ment of findings Section 18. In determining whether an applicant shall receive a gaming license, the commission shall evaluate and issue a statement of findings of how each applicant proposes to advance the following objectives: (1) protecting the lottery from any adverse impacts due to expanded gaming including, but not limited to, developing cross-marketing strategies with the lottery and increasing ticket sales to out-of-state residents; (2) promoting local businesses in host and surrounding communities, including developing cross-marketing strategies with local restaurants, small businesses, hotels, retail outlets and impacted live entertainment venues; (3) realizing maximum capital investment exclusive of land acquisition and infrastructure improvements; (4) implementing a workforce development plan that utilizes the existing labor force, including the estimated number of construction jobs a 1032

76 77 78 79 state 1 2 3 4 5 6 7 8 9 10 11 12 13 14

ADDENDUM 032

[Chap. 23K]

GAMING COMMISSION

23K:18
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

proposed gaming establishment will generate, the development of workforce training programs that serve the unemployed and methods for accessing employment at the gaming establishment; (5) building a gaming establishment of high caliber with a variety of quality amenities to be included as part of the gaming establishment and operated in partnership with local hotels and dining, retail and entertainment facilities so that patrons experience the diversified regional tourism industry; (6) taking additional measures to address problem gambling including, but not limited to, training of gaming employees to identify patrons exhibiting problems with gambling and prevention programs targeted toward vulnerable populations; (7) providing a market analysis detailing the benefits of the site location of the gaming establishment and the estimated recapture rate of gaming-related spending by residents travelling to out-of-state gaming establishments; (8) utilizing sustainable development principles including, but not limited to: (i) being certified as gold or higher under the appropriate certification category in the Leadership in Environmental and Energy Design program created by the United States Green Building Council; (ii) meeting or exceeding the stretch energy code requirements contained in Appendix 120AA of the Massachusetts building energy code or equivalent commitment to advanced energy efficiency as determined by the secretary of energy and environmental affairs; (iii) efforts to mitigate vehicle trips; (iv) efforts to conserve water and manage storm water; (v) demonstrating that electrical and HVAC equipment and appliances will be EnergyStar labeled where available; (vi) procuring or generating on-site 10 per cent of its annual electricity consumption from renewable sources qualified by the department of energy resources under section llF of chapter 25A; and (vii) developing an ongoing plan to submeter and monitor all major sources of energy consumption and undertake regular efforts to maintain and improve energy efficiency of buildings in their systems; (9) establishing, funding and maintaining human resource hiring and training practices that promote the development of a skilled and diverse workforce and access to promotion opportunities through a workforce training program that: (i) establishes transparent career paths with measurable criteria within the gaming establishment that lead to increased responsibility and higher pay grades that are designed to allow employees to pursue career advancement and promotion; (ii) provides employee access to additional resources, such as tuition reimbursement or stipend policies, to enable employees to acquire the education or job 1033

ADDENDUM 033

23K:18

GAMING COMMISSION

[Chap. 23K]
57

training needed to advance career paths based on increased responsibility and pay grades; and (iii) establishes an on-site child day-care progr=; (10) contracting with local business owners for the provision of goods and services to the gaming establishment, including developing plans designed to assist businesses in the commonwealth in identifying the needs for goods and services to the establishment; (11) maximizing revenues received by the commonwealth; (12) providing a high number of quality jobs in the gaming establishment; (13) offering the highest and best value to create a secure and robust gaming market in the region and the commonwealth; (14) mitigating potential impacts on host and surrounding communities which might result from the development or operation of the gaming establishment; (15) purchasing, whenever possible, domestically manufactured slot machines for installation in the gaming establishment; (16) implementing a marketing program that identifies specific goals, expressed as an overall program goal applicable to the total dollar amount of contracts, for the utilization of: (i) minority business enterprises, women business enterprises and veteran business enterprises to participate as contractors in the design of the gaming establishment; (ii) minority business enterprises, women business enterprises and veteran business enterprises to participate as contractors in the construction of the gaming establishment; and (iii) minority business enterprises, women business enterprises and veteran business enterprises to participate as vendors in the provision of goods and services procured by the gaming establishment and any businesses operated as part of the gaming establishment; ' (17) implementing a workforce development plan that: (i) incorporates an affirmative action program of equal opportunity by which the applicant guarantees to provide equal employment opportunities to all employees qualified for licensure in all employment categories, including persons with disabilities; (ii) utilizes the existing labor force in the commonwealth; (iii) estimates the number of construction jobs a gaming establishment will generate and provides for equal employment opportunities and which includes specific goals for the utilization of minorities, women and veterans on those construction jobs; (iv) identifies workforce training programs offered by the gaming establishment; and (v) identifies the methods for accessing employment at the gaming establishment; (18) whether the applicant has a contract with organized labor, including hospitality services, and has the support of organized labor for its ap1034

58 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99

ADDENDUM 034

[Chap. 23K]

GAMING COMMISSION

23K:19 100 101 102 103 104 105 106 107 108 109 110 111 112 113

plication, which specifies: (i) the number of employees to be employed at the gaming establishment, including detailed information on the pay rate and benefits for employees and contractors; (ii) the total amount of investment by the applicant in the gaming establishment and all infrastructure improvements related to the project; (iii) completed studies and reports as required by the commission, which shall include, but need not be limited to, an economic benefit study, both for the commonwealth and the region; and (iv) whether the applicant has included detailed plans for assuring labor harmony during all phases of the construction, rec-0nstruction, renovation, development and operation of the gaming establishment; and (19) gaining public support in the host and surrounding communities which may be demonstrated through public comment received by the commission or gaming applicant. 23K:19,. Issuance of category 1 licenses Section 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. Regions shall be established as follows: (1) region A: suffolk, middlesex, essex, norfolk and worcester counties; (2) region B: hampshire, hampden, franklin and berkshire counties; and (3) region C: bristol, plymouth, nantucket, dukes and barnstable counties. Gaming licenses shall only be issued to applicants who are qualified under the criteria set forth in this chapter, as determined by the commission. Within any 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. (b) A category 1 license issued by the commission in any region shall be valid for an initial period of 15 years; provided, however, that no other gaming license shall be issued by the commission in any region during that 15-year period. The commission shall establish procedures for the renewal of a category 1 license, including a renewal fee, and submit to the clerks of the senate and house of representatives any legislative recommendations that may be necessary to implement those procedures, not less than 180 days before the expiration of the first Iicense granted pursuant to this chapter. (c) No gaming licensee shall transfer a gaming license or any direct or indirect interest in the gaming license or a gaming establishment without 1035

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

ADDENDUM 035

23K:l9

GAMING COMMISSION

[Chap. 23K] 28 29 30 31 32 33. 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

the majority approval of the commission. A person seeking to acquire a gaming license through a transfer shall qualify for licensure under this chapter. The commission shall reject a gaming license transfer or a transfer of interest in the gaming establishment to an unsuitable person and may reject a proposed transfer that, in the opinion of the commission, would be disadvantageous to the interests of the commonwealth. (d) The commission shall take into consideration the physical distance in selecting the locations of the gaming establishments as they relate to each other and how they maximize benefits to the commonwealth; provided, however, that in determining which gaming applicant shall receive a gaming license in each region, the commission shall also consider the support or opposition to each gaming applicant from the public in the host and surrounding communities as demonstrated by public comment provided by the gaming applicant or directly to the commission pursuant to section 15 and through oral and written testimony received during the public hearing conducted pursuant to section 17. (e) If a category 1 license is awarded to an applicant with a live racing license under chapter 128A as of July 1, 2011, a condition of the gaming license shall be to maintain and complete the annual live racing season under said chapter 128A. Upon failure to conduct live racing, the commission shall suspend the category 1 license.
(f) If a category 1 license is .awarded to an applicant with a simulcasting license under chapter 128C as of July 1, 2011, a condition of the gaming license shall be to maintain the simulcasting license under said chapter 128C. Upon failure to conduct simulcast wagering, the commission shall suspend the category 1 license.

(g) For the purposes of subsections (e) and (f), an applicant for a gaming license shall be considered to be the holder of a license under chapter 128A or chapter 128C if the applicant: (i) owns 50.1 or more per cent of the common stock of the company which obtained a license under said chapter 128A or 128C; and (ii) is a person who owns more than 5 per cent of the common stock of the applicant company, directly or indirectly, or is an institutional investor in the gaming license. 23K:20. Issuance of category 2 license Section 20. (a) The commission may issue not more than 1 category 2 license; provided, however, that the category 2 license shall only be issued to an applicant who is qualified under the criteria set forth in this chapter as determined by the commission. 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 commonwealth, no category 2 license shall be awarded. (b) If a category 2 license is awarded to an applicant with a simulcasting license under chapter 128C as of July 1, 2011, a condition of the gam1036

1 2 3 4 5 6 7 8
9

ADDENDUM 036

[Chap. 23K]

GAMING COMMISSION

23K:21 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

ing license shall be to maintain the simulcasting license pursuant to said chapter 128C. Upon failure to conduct simulcast wagering the commission shall suspend the category 2 license. (c) If a category 2 license is awarded to an applicant with a Jive racing license pursuant to chapter 128A as of July 1, 2011 a condition of the gaming license shall be to maintain and complete the annual Jive racing season pursuant to said chapter 128A. Upon failure to conduct Jive racing, the commission shall suspend the category 2 license. (d) For the purposes of subsections (b) and (c), an applicant for a gaming license shall be considered to be the holder of a license under chapter 128A or chapter 128C if the applicant: (i) owns 50.1 or more per cent of the common stock of the company which obtained a license under chapter l28A or 128C; and (ii) includes a person who owns more than 5 per cent of the common stock of the applicant company, directly or indirectly, or is an institutional investor in the gaming license. (e) A category 2 license issued pursuant to this chapter shall not be transferrable or assignable without the approval of the commission; provided, however, that for 5 years after the initial issuance of a category 2 license, the commission shall only approve such a transfer if: (i) the lieensee experiences a change in ownership; or (ii) the licensee fails to maintain suitability or other circumstances which the commission may consider, which, in the opinion of a majority of members of the commission, impacts a licensee's ability to successfully operate a gaming establishment.
(f) A category 2 license issued pursuant to this chapter shall be for a period of 5 years. The commission shall establish procedures for renewal and set the renewal fee based on the cost of fees associated with the evaluation of a licensee; provided, however, that the cost of renewal shall not be less than $100,000. Any renewal fees shall be deposited into the Gaming Revenue Fund.

1037

ADDENDUM 037

23K:29

GAMING COMMISSION

[Chap. 23K]

23K:30. Licensing or registration of persons employed by a gaming licensee

(e) Upon petition by a gaming licensee, the commission may issue a temporary license to an applicant for a key gaming employee license or a 1050

31 32

ADDENDUM 038

[Chap. 23Kl

GAMING COMMISSION

23K:30

gaming employee license if: (i) the applicant for a key gaming employee license or gaming employee license has filed a completed application with the commission; and (ii) the gaming licensee certifies, and the commission finds, that the issuance of a temporary license is necessary for the operation of the gaming establishment and is not designed to circumvent the normal licensing procedures. Unless otherwise stated by the commission; a temporary license issued under this section shall expire 6 months from the date of its issuance and may be renewed, at the discretion of the commission, for an additional 6-month period.

ADDENDUM 039

23K:60

GAMING COMMISSION

[Chap. 23K]

23K:61. Community Mitigation Fund

(b) The commission shall administer the fund and, without further appropriation, shall expend monies in the fund to assist the host community and surrounding communities in offsetting costs related to the construetion and operation of a gaming establishment including, but not limited to, communities and water and sewer districts in the vicinity of a gaming establishment, local and regional education, transportation, infrastructure, housing, environmental issues and public safety, including the office of the county district attorney, police, fire and emergency services. The commission may, at its discretion, distribute funds to a governmental entity or district other than a single municipality in order to implement a mitigation measure that affects more than 1 municipality; provided, however, that such entity or district shall submit a written request for funding in the same manner as a municipality would be required to submit such a request under subsection (c).

6 7 8 9 10 11 12 13 14 15 16 17 18 19

1076

ADDENDUM 040

23K:70

GAMING COMMISSION

[Chap. 23K]

23K:71. Development of annual research agenda in furtherance of undetstanding the social and economic effects of expanding gaming in the commonwealth Section 71. The commission, with the advice of the gaming policy advisory committee, shall develop an annual research agenda in order to understand the social and economic effects of expanding gaming in the commonwealth and to obtain scientific information relative to the neuroscience, psychology, sociology, epidemiology and etiology of gambling. The secretary of health and human services, with the advice and consent of the commission, may expend funds from the Public Health Trust Tund established in section 58 to implement the objectives of the research agenda which shall include, but not be limited to:
(1) a baseline study of the existing occurrence of problem gambling in the commonwealth; provided, however, that the study shall examine and describe the existing levels of problem gambling and the existing programs available that prevent and address the harmful consequences of problem gambling; provided further, that the commission shall contract with scientists and physicians to examine the current research as to the causes for problem gambling and the health effects of problem gambling and the treatment methods currently available in the commonwealth; provided further, that the commission shall report on the findings of the baseline study and provide recommendations to the house and senate committees on ways and means, the joint committee on economic <levelopment and emerging technologies, the joint committee on mental health and substance abuse and the joint committee on public health relative to methods to supplement or improve problem gambling prevention and treatment services;
1

2 3 4 5 6 7 8 9
10

11 12 13 14 15
16

17 18 19 20 21 22 23 24 25 26 27 28 29 30
31 32 33

(2) comprehensive legal and factual studies of the social and economic impacts of gambling in the commonwealth on: (a) state, local and Indian tribal governments; and (b) communities and social institutions generally, including individuals, families and businesses within such communities and institutions; provided, however, that the matters to be examined in such studies shall include, but not be limited to: (i) a review of existing federal, state, local and Indian tribal government policies and practices with respect to the legalization or prohibition of gambling, including a review of the costs of such policies and practices; 1082

ADDENDUM 041

[Chap. 23K]

GAMING COMMISSION

23K:71
34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65

(ij) an assessment of the r.elationship between gambling and levels of crime and of existing enforcement and regulatory practices intended to address any such relationship;
(iii) an assessment of pathological or problem gambling, including its impact on individuals, families, businesses, social institutions and the economy;

(iv) an assessment of the impact of gambling on individuals, families, businesses, social institutions and the economy generally, including the role of advertising in promoting gambling and the impact of gambling on depressed economic areas; (v) an assessment of the extent to which gaming has provided revenues to other state, local and Indian tribal governments; (vi) an assessment of the costs of added infrastructure, police force, increased unemployment, increased health care and dependency on public assistance; (vii) an assessment of the impact of the development and operation of the gaming establishment on small businesses in host communities and surrounding communities, including a review of any economic harm experienced and potential solutions to mitigate associated economic harm; and (viii) the costs of implementing this chapter. (3) individual studies conducted by academic institutions and individual researchers in the commonwealth to study topics which shall include, but not be limited to: (i) reward and aversion, neuroimaging and neuroscience in humans, addiction phenotype genotype research, gambling-based experimental psychology and mathematical modeling of reward-based decision making; (ii) the sociology and psychology of gambling behavior, gambling technology and marketing; and (iii) the epidemiology and etiology of gambling and problem gambling in the general population; provided, however, that when contracting with researchers to study such issues, the commission shall encourage the collaboration among researchers in the commonwealth and other states and jurisdic~m.

M
67 68 69 70 71 72 73 74

The commission and the committee shall annually make scientificallybased recommendations which reflect the results of this research to the house and senate committees on ways and means, the joint committee on economic development and emerging technologies, the joint committee on mental health and substance abuse and the joint committee on public health. The commission shall consider any such recommendations, research and findings in all decisions related to enhancing responsible gambling and mitigating problem gambling. 1083

ADDENDUM 042

149:44A

LABOR AND INDUSTRIES

[Chap. 149]

(D) Every contract for the construction, reconstruction, installation, demolition, maintenance or repair of any building by a public agency estimated to cost more than $100,000, except for a pumping station to be constructed as an integral part of a sewer construction or water construction project bid under the provisions of section 39M of chapter 30, shall be awarded to the lowest responsible and eligible general bidder on the basis of competitive bids in accordance with the procedure set forth in section 44A to 44H, inclusive.

81 82 83 84 85 86 87 88

324

ADDENDUM 043

[Chap. 149]

LABOR AND INDUSTRIES

149:44D'h

149:44D'h. General contractor bids; prequalification procedures Section 44D'h. (a) Notwithstanding section 44E, an awarding authority on contracts subject to section 44A and which are estimated to cost not less than $10,000,000 shall prequalify general contractors to submit general bids in accordance with the provisions of subsections (a) to G), inclusive; provided, that on such contracts subject to section 44A and which are estimated to cost not less than $100,000 but not more than $10,000,000, an awarding authority may elect to prequalify general contractors to submit general bids in accordance with subsections (a) to G), inclusive. When prequalifying general contractors, the awarding authority shall initiate said prequalification through the solicitation of responses to a request for qualifications pursuant to subsection (d) of this section. (b)(l) Notwithstanding subsection (a), the division of capital asset management and maintenance, the Massachusetts Port Authority, the Massa1 2

3 4 5
6 7 8 9
10 11

12
13

337

ADDENDUM 044

149:44Dl/z

LABOR AND INDUSTRIES

[Chap. 149] 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 . 44 45 46.

chusetts Water Resources Authority, the Massachusetts State Colleges Building Authority, and the University of Massachusetts Building Authority, hereinafter referred to as "exempt agencies", shall not be subject to said subsection (a), but may elect to prequalify general contractors to submit general bids in accordance with the subsections (c) to (j), inclusive. (2) For cases involving security sensitive information as defined by subclause (n) of clause Twenty-sixth of section 7 of chapter 4 and in order to maintain the confidentiality of security sensitive information, the awarding authority may, with prior approval of the commissioner, implement a prequalification process whereby the awarding authority selects a final list of a minimum of 3 general contractors who are eligible to snbmit bids and the awarding authority may award a contract to the lowest bidder amongst the final list of bidders. The commissioner of the division of capital asset management and maintenance shall promulgate regulations to implement this paragraph. (c) Before issuing a request for qualifications, hereinafter referred to as RFQ, the awarding authority shall establish a prequalification committee for the purpose of reviewing and evaluating responses submitted in response to the RFQ issued pursuant to subsection (d). The prequalification committee shall be comprised of 1 representative of the designer and 3 representatives of the awarding authority. One of the representatives of the awarding authority shall be the owner's project manager if an owner's project manager is required on the buildiug project pursuant to this section. (d) Wheu prequalifyiug general coutractors, the awarding autho11ty shall initiate the prequalification process through public notice of the building project and the solicitation of responses to the RFQ from genera] contractors. The public notice and solicitation shall include: (1) the time and date for receipt of responses to the RFQ, the address of the office to which the responses are to be delivered, and the timeframe in which the public agency will respond to said responses; (2) a general description of the project; (3) the evaluation procedure and the criteria for the prequalification of general contractors, including the point rating system, and the schedule for the evaluation process; (4) the anticipated schedule and estimated construction cost for the building project; (5) a listing of the project team including the awarding authority, the designer, and awarding authority's owner's project manager, if applicable; 338

ADDENDUM 045

[Chap. 149]

LABOR AND INDUSTRIES

149:44DVz

(6) a.statement indicating that the RFQ will be used to prequalify genera] contractors who will be invited to submit a bid pursuant to section
~;

55 56 58 59 60 61 62 63 64 65 66 67 68 69 70
71

(7) a prohibition against any unauthorized communication or contact with the public agency outside of official pre-bid meetings; and if desired, (8) any limitation on the size and number of pages to be included in the response to the RFQ desired by the public agency. (e) The awarding authority shall require interested general contractors to submit a statement of qualifications in response to the RFQ issued pursuant to subsection (d). The RFQ shall require only the information contained in paragraphs (1) to (4), inclusive, of this subsection, and shall identify the specific point allocation for each category and sub-category of information. Within each category of information, public agencies may use discretion in allocating points among tbe subcategories, consistent with the total points for the category.
(1) Management Experience (50 points; minimum of 25 required for
'

approval):-

72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95

(i) Business owners, The name, title, years with firm of the owner(s) of the business. (ii) Management personnel, The names, title, education and construetion ex,11erience, years with firm, and list of projects completed by all management personnel.
(iii) Similar project experience, The project name(s), description, original contract sum, final contract sum with explanation, and date completed of similar projects.

(iv) Terminations, A list of any projects on which the firm was terminated or failed to complete the work. (v) Legal proceedings, A list of all \egal or administrative proceedings currently pending against the general contractor or concluded adversely to the general contractor within the past 5 years which relate to the procurement or performance of any public or private construction contract. (vi) Safety record, The 3-year history of the firm's workers' compensation experience modifier. (vii) Compliance Record, Information on and evidence of evidence of the firm's compliance record with respect to minority business enterprise and women business enterprise inclusion goals and workforce inclusion goals, if applicable. (2) References (30 points; minimum of 15 required for approval): (i) project references, References from owners and architects for all projects listed in clause (iii) of paragraph (1), including project names 339

ADDENDUM 046

149:44DY,

LABOR AND INDUSTRIES

[Chap. 149] 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110

and the names of the owners and architects, with address, telephone and fax number, and contact person for each. (ii) Credit references, A minimum of 5 credit references, including the telephone and fax number of contact person from key suppliers, vendors and banks. (iii) Public project record, A list of all completed public building construction project or projects as defined in section 44A during the past 3 years with owner's name, address, telephone and fax number and contact person.
(3) Capacity w Complete Projects (20 points; minimum of 10 requi?ed for approval):

(i) Audited financial statement for the most recent fiscal year, provided that financial information submitted shall remain confidential and shall not be a public record under section 7 of chapter 4.
(ii) Revenue under contract for the next 3 fiscal years.

(4) Mandatory requirements, for which no points are assigned: (i) A commitment letter for payment and performance bonds at 100 per cent of the estimated contract value from a surety company licensed to do business in the commonwealth and whose name appears on United States Treasury Department Circular 570.
(ii) A certificate of eligibility issued by the division of capital asset management and maintenance pursuant to section 44D, showing a capacity rating sufficient for the project, and an update statement.

The statement of qualifications shall be signed under pains and penalties of perjury.
[Subsection (j) applicable as provided by 2009, 30, Secs. 19 and 46.]
(f) The public notice and solicitation required in subsection (d) shall be advertised in a newspaper of general circulation in the area in which the building project is located, in the central register pursuant to section 20A of chapter 9, and within the COMPASS system, so-called. The public notice and solicitation shall be given not less than 2 weeks before the deadline for submitting responses to the RFQ.

119 120

(g) The awarding authority shall not open the statement of qualifications publicly, but shall open them in the presence of 1 or more witnesses at the time specified in the RFQ. At the opening of responses, the awarding authority shall prepare a register of responders which shall include the name of each responder who submitted a statement of qualifications to said request for qualifications. The register of responders shall be open for public inspection. Upon completion of the evaluations, the contents of the statements of qualifications shall be open to the public. The 340

ADDENDUM 047

[Chap. 149]

LABOR AND INDUSTRIES

149:44Dl/z

financial information contained in the statements of qualifications shall not be a public record as defined in section 7 of chapter 4. (h) The prequalification committee established pursuant to subsection (c) shall evaluate each statement of qualifications using solely the criteria provided in the RFQ. Only general contractors achieving a minimum score of 70 shall be prequalified and invited to submit bids consistent with the section 44E. The prequalification committee shall select a minimum of 3 qualified general contractors to submit bids pursuant to said section 44E. Any general contractor invited to submit a bid pursuant to this subsection shall be subject to sections 44B and 44D. A general contractor's score shall be made available to the general contractor upon request. The decision of the prequalification committee shall be final and shall not be subject to appeal except on grounds of arbitrariness, capriciousness, fraud or collusion. (i) Notwithstanding subsections (a) to (h), inclusive, if the awarding authority qualifies Jess than 3 general contractors to submit bids pursuant to said subsection (h) and the prequalification process was required pursuant to said subsection (a), the awarding authority shall reject all respouses and issue at least 1 new request for qualifications and, if the awarding authority still prequalifies less than 3 general contractors to submit bids pursuant to said section (h), then the awarding authority may reject all responses and issue a new request for qualifications, invite general bids pursuant to sections 44B to 44E, inclusive, or, if the awarding authority prequalifies at least 2 general contractors, then the awarding authority may invite bids from the 2 prequalified general contractors. If the awarding authority qualifies less than 3 general contractors to submit bids pursuant to said . subsection (h) and the prequalification process was initiated at the option of the awarding authority pursuant to said subsection (a), the awarding authority may reject all responses and issue a new request for qualifications, invite general bids pursuant to said sections 44B to 44E, inclusive, without further prequalification, or, if the awarding authority prequalifies at least 2 general contractors, then the awarding authority may invite bids from the 2 prequalified general contractors. An awarding authority re-issuing a request for qualifications under this subsection may stipulate that a general contractor prequalified for a particular project during the first prequalification review by the awarding authority will remain prequalified for that particular project without further submission by the general contractor or review by the awarding authority, for not more than 120 days from the due date of the responses from the first request for qualifications issued to general contractors for the project.
(j) Regulations and procedures shall be promulgated by the commissioner of the division of capital asset management and maintenance to

135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177

341

ADDENDUM 048

149:44D'h

LABOR AND INDUSTRIES

[Chap. 149] 178 179

implement this section and to ensure that the prequalification process set forth in subsections (a) to (i), inclusive, is sufficient, fair and consistent.

342

ADDENDUM 049

Chapter. 388. AN ACT TO PROTECT GREYHOUNDS. SECTION 1. Declaration of pwpose. The citizens of Massachusetts find that commercial dog racing is cruel and inhumane, and as recommended by the Humane Society of the United States, the Animal Rescue League of Boston, GREY2K USA, and the Massachusetts Society for the Prevention of Cruelty to Animals, declare that -it should be prohibited in the commonwealth. SECTION 2. Chapter l28A of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by inserting after Section 14D the following section:Section 14E. Notwithstanding the provisions of this chapter or any general or special law to the contrary, no dog racing or racing meeting where any form of betting or wagering on the speed or ability of dogs occurs shall be conducted or pennitted in this commonwealth and the commission is hereby prohibited from accepting or approving any application or request for racing dates for dog racing. Any person violating any provision of this section relative to dog racing shall be subject to a civil penalty of not less than twenty thousand dollars which shall be payable to the commission and used for administrative purposes of the commission subject to appropriation. All other provisions ofthis Chapter shall be construed as ifthey contain no references to dogs, dog racing or dog races. Notwithstanding any general or special law to the contrary, the effective date of this section shall be January 1, 2010. SECTION 3. The several provisions of this Act are independent and severable and the invalidity, if any, of any part or feature thereof shall not affect or render the remainder of the Act invalid or inoperative. Adopted by the People at the November 4, 2008 state election.

1574

ADDENDUM 050

Chap. 194

SECTION 91. (a) Notwithstanding any general or special law or mle or regulation to the contrary, the governor may enter into a compact with a federally recognized Indian tribe in the commonwealth. (b) The Massachusetts gaming commission shall, upon request of the governor, provide assistance to the governor in negotiating such compact. (c) The governor shall 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. The governing body in the host community shall coordinate with the tribe to schedule a vote for approval of the proposed gaming establishment upon receipt of a request from the tribe. The governing body of the host conununity shall call for the election to be held not less than 60 days but not more than 90 days from the date the request was received. (d) A compact negotiated and agreed to by the governor and tribe shall be submitted to the general court for approval. The compact shall include a statement of the financial investment rights of any individual or entity which has mad~ an investinent to the tribe, its affiliates or predecessor applicants of the tribe for the purpose of securing a gaming license for that tribe under its name or any subsidiary or affiliate since 2005.

857

ADDENDUM 051

Chap.194 (e) 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 I license in Region C under said chapter 23K.

858

ADDENDUM 052

Chap.194

SECTION 97. Notwithstanding any general or special law or rule or regulation to the contrary, a gaming establishment shall supply the Massachusetts gaming commission with customer tracking data collected or generated by loyalty programs, player tracking software, player card systems, online gambling transactions or any other information system. The commission shall contract with an experienced nonprofit research entity to develop an anonymizing system that automatically removes from the data: (a) personally identifying information, including player name, street address, bank or credit information and the last 4 digits of a player's zip code, in compliance with section 2 of chapter 93H of the General Laws; and (b) game identifying infonnation, including game name and device manufacturing company, in protection of corporate intellectual property. The data shall retain information on player characteristics including, but not limited to. gender, age and region of residence, player behavior including, but not limited to, frequency of play, length ofplay, speed ofplay, denomination of play, amounts wagered and, if applicable, nwnber of lines or hands played and characteristics of games played including, but not limited to, reel configuration, return-to-player or RTP, volatility index and denomination. The commission shall convey the anonymized data to a research facility which shall make the data available to qualified researchers for the purposes of: (1) conducting analyses that improve understanding of how gambling addiction develops and progresses; (2) developing evidence-based harm minimization strategies; and (3) developing evidence-based systems to monitor, detect and intervene in high-risk gambling. The commission shall request reports on researcher analyses of the behavioral data, which could provided infonned recommendation to the general court relative to more effective regulation of gambling operations. The cojrunission may directly initiate studies assessing the effectiveness of any specific measures, programs or interventions which the commonwealth has implemented in gaming operations and which might be illuminated through the behavioral data in question.

860

ADDENDUM 053

205 CMR: MASSACHUSETTS GAMING COMMISSION 205 CMR 111.00: Section 111.01: Phase 1 Application Requirements 111.02: Business Entity Disclosure Form - Category 1 and Category 2 Entity Applicants and Holding/ Intermediary Companies 111.03: Multi-jurisdictional Personal History Disclosure Form 111.04: Massachusetts Supplemental Form 111.05: Withdrawal of Application 111.01: Phase 1 Application Requirements (1) The requirements set forth in 205 CMR 111.00 apply to the Phase 1 determination of suitability issued by the commission unless otherwise noted. (2) Commission Consultation. The commission or its designees may conduct one or more consultation meetings to provide guidance on Phase 1 standards and procedures and answer any appropriate inquiries. (3) Applicants must use the appropriate application forms issued or adopted by the commission. Each application shall be prepared and submitted in accordance with the applicable provisions of M.G.L. c. 23K and 205 CMR 101.00 through 117.00 and the instructions on the commission's forms. Applicants for a category 1 license or a category 2 license shall, at a minimum, submit the following completed forms to initiate RFA-1 review under 205 CMR 111.02: Business Entity Disclosure Form - Category 1 and Category 2 Entity Applicants and Holding/ Intermediary Companies; 205 CMR 111.03: Multi-jurisdictional Personal History Form; and 205 CMR 111.04: Massachusetts Supplemental Form. (4) At a minimum, the application must contain: (a) all the relevant information required in 205 CMR 111.00; (b) the license fee pursuant to 205 CMR 114.00: Fees; and (c) disclosure of payments or contributions to local governments pursuant to 205 CMR 108.02: Mandatory Disclosure of Political Contributions and Community Contributions. (5) Applicants have an affirmative responsibility to submit a complete Phase 1 application in the forms specified under 205 CMR 111.01(3) by the deadline established by the commission. The commission shall have no obligation to accept or review an incomplete application submitted by the established deadline. (6) The commission may, in its discretion, extend the time for filing a complete application to enable an applicant to cure a deficiency in its application, provided that the application was submitted and the applicable fee was paid before the established deadline, or to provide reasonable additional time for filing in cases in which extraordinary circumstances prevented a timely filing. 111.02: Business Entity Disclosure Form - Category 1 and Category 2 Entity Applicants and Holding/ Intermediary Companies (1) A BED shall be in the format prescribed by the commission and may require the applicant to provide the following information and such additional information as the commission may, in its discretion, determine: (a) The name, title, phone number and e-mail address of a person to be contacted in reference to the application; (b) The current or former official trade names used by the business entity, and the dates of use; (c) The name of the license applicant and, if the applicant is other than the applicant business entity, the nature of the applicant's business entity's relationship to the license applicant; (d) The date of incorporation or formation; (e) The current or former business addresses and website of the business entity with relevant time frames; PHASE 1 APPLICATION REQUIREMENTS

ADDENDUM 054

205 CMR: MASSACHUSETTS GAMING COMMISSION 111.02: continued (f) A description of the present and former businesses engaged in by the business entity and its holding companies, subsidiaries and intermediary companies, including, but not limited to: 1. Competitive conditions in the industry; 2. The principal products produced, services rendered and methods of distribution; 3. Information about raw materials essential to the business entity's operation; 4. Information relating to intellectual property rights; 5. A description of any material changes to the business entity's mode of conducting business; 6. A description of any former business the business entity was engaged in during the last ten years and the reasons for the cessation of such business, including relevant time frames; 7. The name, last known address, occupation and date of birth of each incorporator or founding member; 8. The name, home address, business address, date of birth, occupation, race, gender, ethnicity and title of current and former directors, and trustees and the dates such position was held during the ten years and reason for leaving; 9. The name, home address, business address, date of birth, race, gender, ethnicity and title of current officers of the business entity, and the dates of office; 10. The name, last known home address, current business address, date of birth and occupation of former officers for the business entity for the last ten years, and the dates of office; 11. The annual compensation of officers; 12. The name, business address, date of birth and position of each person, other than an officer, who receives annual compensation of more than $250,000.00 and the length of time employed and amount of compensation; 13. A description of all bonus, profit sharing, pension, retirement, deferred compensation or similar plans; 14. A description of the nature, type, number of shares, terms, conditions, rights and privileges of all classes of securities or other ownership interest issued or to be issued including the number of shares of each class authorized or to be authorized and the number of shares of each class outstanding; 15. The name, home address and date of birth of each shareholder, the class held, number of shares held and the percentage of outstanding voting or non-voting securities or other ownership interest held; 16. A description of the nature, type, terms, covenants, conditions and priorities of all outstanding debt and security devices utilized by the business entity; 17. Other than for a publicly traded corporation unless specifically required by the commission on the bureau, the name, address and date of birth of each person holding the debt or security devices in 205 CMR 111.02(1)(f)16., the type of debt instrument held, the original debt amount and current balance; 18. A description of the nature, type, terms and conditions of all securities options, including the title and amount of securities subject to option, the name and address of each option holder and the market value at the time of issuance; 19. The following information for each account or the last ten years held in the name of the business entity or its nominee, or otherwise under the direct or indirect control of the business entity: a. The name and address of the bank, savings and loan or other financial institution; b. The type of account; c. The account number; and d. The dates held; 20. Other than for a publicly traded corporation unless specifically required by the commission on the bureau, the name and address of all persons with whom the business entity has contracts or agreements of $250,000.00 or more in value, including employment contracts of more than one-year duration or who have supplied goods and services within the past six months, and the nature of such contract or the goods and services provided; 21. The name and address of each company in which the business entity holds securities or other ownership interest, type of securities or other ownership interest held, purchase price per share or interest, number of shares held, and percentage of ownership, if more than 5%;

ADDENDUM 055

205 CMR: MASSACHUSETTS GAMING COMMISSION 111.02: continued 22. Information regarding any transaction within the last five years involving a change in the beneficial ownership of the business entity's equity securities on the part of any current or former director, officer or beneficial owner of more than 10% of any class of equity security; 23. A description of any civil, criminal, administrative and investigatory proceedings in any jurisdiction, for the business entity and each director, trustee or officer as follows: a. Any arrest, indictment, charge or conviction for any criminal or disorderly persons offense; b. Any criminal proceeding in which such person has been a party or has been named as an unindicted co-conspirator; c. Existing civil litigation to which the business entity is a party, if damages are reasonably expected to exceed $250,000.00; d. Any judgment, order, consent decree or consent order entered against the business entity pertaining to a violation or alleged violation of the Federal antitrust, trade regulation or securities laws or similar laws of any jurisdiction; and e. Any judgment, order, consent decree or consent order entered against the business entity pertaining to a violation or alleged violation of any other state or Federal statute, regulation or code which resulted in the imposition of a fine or penalty of $50,000.00 or more within the past ten years; 24. For the business entity and any holding or intermediary company, information regarding any judgments or petitions for bankruptcy or insolvency and any relief sought under any provision of the Federal Bankruptcy Act or any state insolvency law; and any receiver, fiscal agent, trustee or similar officer appointed for the property or business of the business entity or any holding or intermediary company within the last ten years; 25. During the last ten years, whether the business entity has had any license or certificate denied, suspended or revoked by any government agency in Massachusetts or any other jurisdiction, the nature of such license or certificate, the agency and its location, the date of such action, the reasons therefore and the facts related thereto; 26. During the last ten years, whether the business entity or any director, officer, employee or any person acting for or on behalf of the business entity has made any payments, bribes or kickbacks to any employee, company, organization or government official, foreign or domestic, and regardless of whether such incident or incidents was lawful in the jurisdiction of its occurrence, to obtain favorable treatment or to obtain a competitive advantage; 27. During the last ten years, whether the business entity, its parent, any subsidiary or related entity or individual has: a. Donated or loaned the business entity's funds or property for the use or benefit of or in opposing any government, political party, candidate or committee either foreign or domestic; b. Made any loans, donations or disbursements to its directors, officers or employees for the purpose of making political contributions or reimbursing such individuals for political contributions, either foreign or domestic; or c. Maintained a bank account or other account, either foreign or domestic, not reflected on the books or records of the business entity, or maintained any account in the name of a nominee of the business entity; 28. The names and addresses of any current of former directors, officers, employees or third parties who would have knowledge or information concerning 205 CMR 111.02(1)(f)27.c.; 29. A copy of the following: a. Annual reports to shareholder for the last five years; b. Any annual reports prepared within the last five years on Form 10K pursuant to the Securities Exchange Act of 1934, 13 or 15d; c. An audited financial statement for the last fiscal year, including, without limitation, an income statement, balance sheet and statement of sources and application of funds, and all notes to such statements and related financial schedules; d. Copies of all annual financial statements prepared in the last five fiscal years, any exceptions taken to such statements by an independent auditor retained by the business entity and the management response thereto;

ADDENDUM 056

205 CMR: MASSACHUSETTS GAMING COMMISSION 111.02: continued e. The most recent quarterly unaudited financial statement prepared by or for the business entity which, if the business entity is registered with the Securities Exchange Commission (SEC) may be satisfied by providing a copy of the most recently filed Form 10Q; f. Any current report prepared due to a change in control of the business entity, acquisition or disposition of assets, bankruptcy or receivership proceedings, changes in the business entity's certifying accountant, or other material events, which, if the business entity is registered with the SEC, may be satisfied by providing a copy of the most recent filed Form 8K; g. The most recent Proxy or Information Statement filed pursuant to the Securities Exchange Act of 1934, 14; h. Registration Statements filed in the last five years pursuant to the Securities Act of 1933; i. All reports and correspondence not otherwise submitted in the last five years by independent auditors for the business entity which pertain to the issuance of financial statements, managerial advisory services or internal control recommendations; j. The name, address and telephone number of the current outside auditor(s); 30. A certified copy of the articles of incorporation, charter and bylaws, and all amendments and proposed amendments thereto; 31. If a business entity: a. A current ownership organization chart of the business entity, its parent company and each subsidiary of the business entity; b. A functional table of organization for the business entity, including position descriptions and the names of persons holding such positions; 32. If a corporation: copies of Internal Revenue Service Forms 1120 (Corporate Income Tax Return) and 941 (Employer's Quarterly Federal Tax Return) filed for the last five years; 33. If a partnership, copies of Internal Revenue Service Forms 1065 (Partnership Return Form) and 941 (Employer's Quarterly Federal Tax Return) filed for the last five years; 34. If a limited liability company, copies of its Federal returns for the last five years; and 35. A listing of any records, documents or other information submitted as appendices to the BED (2) In addition to the information in 205 CMR 111.02(1), a completed BED shall include the following documents, which shall be dated and signed by the president, chief executive officer, partner, general partner or sole proprietor, and notarized: (a) A release authorization directing all courts, probation departments, selective service boards, employers, educational institutions, banks, financial and other institutions and all governmental agencies, Federal, state, and local, both foreign and domestic, to release any and all information pertaining to the business entity as requested by the commission, the bureau, and their agents and employees; (b) A waiver of liability as to the Commonwealth of Massachusetts and its instrumentalities and agents for any damages resulting from any disclosure and publication of information acquired during the license or investigation process; (c) Consent to inspection, searches and seizures and the supplying of handwriting exemplars; and (d) A signed, dated and notarized affidavit. 111.03: Multi-jurisdictional Personal History Disclosure Form (1) A PHD-MA shall be submitted by each category 1 and category 2 qualifier and shall be in a format prescribed by the commission and may require the qualifier to provide the following information and such additional information as the commission may, in its discretion, determine: (a) Name, including maiden name and any aliases or nicknames and applicable dates of use; (b) Date of birth; (c) Physical description; (d) Current address and residence history; (e) Social Security Number, which information is voluntarily provided in accordance with 5 U.S.C. 552a;

ADDENDUM 057

205 CMR: MASSACHUSETTS GAMING COMMISSION 111.03: continued (f) Citizenship and, if applicable, information regarding resident alien status, including information regarding passports; (g) Marital history, spouse, dependents and other family data; (h) The gaming licensee or qualifier, gaming vendor licensee or qualifier or holding company, as applicable, with which the qualifier is affiliated, and the nature of the qualifier's position with or interest in such entity; (i) Telephone number at the current place of employment; (j) Employment history of the qualifier and qualifier's immediate family; (k) Education and training; (l) Record of military service; (m) Government positions and offices presently or previously held, and the offices, trusteeships, directorships or fiduciary positions presently or previously held with any business entity; (n) Trusteeships or other fiduciary positions held by the qualifier and the qualifier's spouse, and any denial or suspension of, or removal from, such positions; (o) Current memberships in any social, labor or fraternal union, club or organization; (p) Licenses and other approvals held by or applied for by the qualifier or, where specified, the qualifier's spouse, in the Commonwealth of Massachusetts or any other jurisdiction, as follows: 1. Any professional or occupational license held by or applied for the by the qualifier or the qualifier's spouse; 2. Motor vehicle registrations and operator licenses held by or applied for the by the qualifier or the qualifier's spouse, and any revocation or suspension thereof; 3. Possession or ownership of any pistol or firearm, or any application for any firearm permit, firearm dealer's license, or permit to carry a pistol or firearm; 4. Any license, permit, approval or registration required to participate in any lawful gambling operation in the Commonwealth of Massachusetts or any jurisdiction held by or applied for by the qualifier; and 5. Any denial, suspension or revocation by a government agency of a license, permit or certification held by or applied for by the qualifier or the qualifier's spouse, or any entity in which the qualifier or the qualifier's spouse was a director, officer, partner or any owner of a 5% or greater interest; (q) Any interest in or employment presently or previously held by the qualifier with any entity which has applied for a permit, license, certificate or qualification in connection with any lawful gambling or alcoholic beverage operation in the Commonwealth of Massachusetts or any other jurisdiction; and any current employment or other association by the qualifier's family with the gambling or alcoholic beverage industries in the Commonwealth of Massachusetts or any other jurisdiction; (r) Civil, criminal and investigatory proceedings in any jurisdiction, as follows: 1. Arrests, charges or offenses committed by the qualifier or any member of the qualifier's immediate family; 2. Any instance where the qualifier has been named as an unindicted party or co-conspirator in a criminal proceeding or held as a material witness; 3. Any appearance before, investigation by or request to take a polygraph examination by any governmental agency, court, committee, grand jury or investigatory body, and any refusal to comply with a request to do so; 4. Any pardons, dismissals, suspensions or deferrals of any criminal investigation, prosecution, or conviction; 5. Lawsuits to which the qualifier was or is a party; 6. Any citation or charge for a violation of a statute, regulation or code of any jurisdiction, other than a criminal disorderly persons, petty disorderly persons or motor vehicle violation; and 7. Any use, distribution, or possession of any narcotic, hallucinogenic, drug, barbiturate, amphetamine or other substance listed in M.G.L. c. 94C other than pursuant to a valid prescription issued by a licensed physician; (s) Any exclusion or barring from any casino, gaming establishment or gambling/gaming related entity in any jurisdiction; and

ADDENDUM 058

205 CMR: MASSACHUSETTS GAMING COMMISSION 111.03: continued (t) Financial data, as follows: 1. All assets and liability of the qualifier, and the qualifier's spouse and dependent children as indicated on the net worth statement and supporting schedules in a format prescribed by the commission, including cash, bank accounts, notes payable and receivable, real estate and income taxes payable, loans, accounts payable and any other indebtedness, contingent liabilities, securities, real estate interests, real estate mortgages and liens, life insurance, pension funds, vehicles and other assets; 2. Bank accounts, including any right of ownership in, control over or interest in any foreign bank account, and safe deposit boxes; 3. Real estate interests held by the qualifier or the qualifier's spouse or dependent children; 4. Businesses owned; 5. Copies of Federal tax returns and related information; 6. Judgments or petitions for bankruptcy, insolvency or liquidation concerning the qualifier or any business entity in which the qualifier held a 5% or greater interest, other than a publicly traded corporation, or in which the qualifier served as an officer or director; 7. Any business entity in which the qualifier was an owner, director or officer which has been placed under some form of governmental administration or monitoring; 8. Any garnishment or attachment of wages, charging order or voluntary wage execution, including the amount, court, nature of the obligation and the holder of the obligation; 9. Any repossessions of real or personal property; 10. Any guarantees, co-signatures or insuring of payments of financial obligations of any persons or business entities; 11. Status as executor, administrator or fiduciary of any estate; 12. Life insurance policies on the qualifier's life which name someone other than the qualifier's family as a beneficiary; 13. Positions held, assets held, or interest received in any estate or trust; 14. Whether the qualifier has ever been bonded for any purpose or been denied any type of bond, including the nature of the bond and if applicable, the reason for denial; 15. Insurance claims in excess of $100,000.00 by the qualifier or the qualifier's spouse or dependent children; 16. Referral or finder's fees in excess of $10,000.00; 17. Loans in excess of $10,000.00 made or received by the qualifier, the qualifier's spouse or dependent children; 18. Gifts in excess of $10,000.00 given or received by the qualifier or the qualifier's immediate family; 19. Brokerage or margin accounts with any securities or commodities dealer; 20. Currency exchanges in an amount greater than $10,000.00; 21. Information regarding any instance where the qualifier or any entity in which the qualifier was a director, officer or holder of a five percent or greater interest has traded in foreign currencies or in a foreign commodities exchange, sold or purchased discounted promissory notes or other commercial paper, or been a party to any leasing arrangements in excess of $50,000.00; and 22. Information regarding any ownership interest or financial investment by the qualifier in any entity which holds or is an applicant for a license issued by the commission, or in any gambling venture which does not require licensure by the commission, including persons providing or reasonably anticipated to provide the qualifier with support in the financing of such investment or interest; the extent and nature of the qualifier's involvement in the management and operation of the entity; whether the qualifier has or has agreed to assign, pledge or hypothecate such interest or investment, the nature and terms of any such transaction and a copy of any such agreement. (2) In addition to the information in 205 CMR 111.03(1), a completed PHD-MA shall include the following: (a) The name, address, occupation and phone number of persons who can attest to the qualifier's good character and reputation;

ADDENDUM 059

205 CMR: MASSACHUSETTS GAMING COMMISSION 111.03: continued (b) A waiver of liability as to the Commonwealth of Massachusetts and its instrumentalities and agents for any damages resulting from any disclosure and publication of information acquired during the license or investigation process; (c) Consent to inspection, searches and seizures and the supplying of handwriting exemplars; and (d) A signed, dated and notarized affidavit. 111.04: Massachusetts Supplemental Form A PHD-MA-SUPP shall be submitted by each category 1 and category 2 license qualifier in a format prescribed by the commission and may require the qualifier to provide the following information and such additional information as the commission may, in its discretion, determine: (a) Name, including maiden name and any aliases or nicknames and applicable dates of use; (b) Date of birth; (c) Physical description, including a color photograph taken within the past six months; (d) Current address, mailing and home, if different; (e) Home and work telephone numbers; (f) Social Security Number, which information is voluntarily provided in accordance with 5 U.S.C. 552a; (g) The gaming license applicant or holding company, as applicable, with which the qualifier is affiliated, and the nature of the qualifier's position with or interest in such entity; (h) Citizenship and, if applicable, resident alien status, including any employment authorization with expiration date; country of which the qualifier is a citizen, place of birth, port of entry to the United States, and name and addresses of sponsor(s) upon the qualifier's arrival; (i) Whether during the last ten years any entity in which the qualifier has been a director, officer, principal employee or a holder of 5% or more interest has: 1. Made or been charged with (either itself or through third parties acting for it) bribes or kickbacks to any government official, domestic or foreign, to obtain favorable treatment or to any company, employee or organization to obtain a competitive advantage; 2. Held a foreign bank account or has had authority to control disbursements from a foreign bank account; 3. Maintained a bank account or other account, whether domestic or foreign, which is not reflected on the books or records of the business or which is in a name other than the name of the business; 4. Donated, loaned or used funds or property for the use or benefit of or in opposing any government, political party, candidate or committee either domestic or foreign; 5. Compensated any of its directors, officers or employees for time and expenses incurred in performing services for the benefit of or in opposing any government or political party domestic or foreign; or 6. Made any loans, donations or other disbursement to its directors, officers or employees for the purpose of making political contributions or reimbursing such individuals for political contributions whether domestic or foreign; (j) Copies of Federal and foreign tax returns and related information for the last five years; and (k) A signed, dated and notarized release authorization which shall direct all courts, probation departments, military organizations, selective service boards, employers, education institutions, banks, financial and other institutions and all governmental agencies, Federal, state and local, both foreign and domestic, to release any and all information pertaining to the qualifier as requested by the commission, the bureau or a contractor investigator. (l) A completed PHD-MA-SUPP shall include the following: 1. The name, address, occupation and phone number of persons who can attest to the qualifier's good character and reputation; 2. a waiver of liability as to the Commonwealth of Massachusetts and its instrumentalities and agents for any damages resulting from any disclosure and publication of information acquired during the license or investigation process; and 3. a signed, dated and notarized affidavit.

ADDENDUM 060

205 CMR: MASSACHUSETTS GAMING COMMISSION 111.05: Withdrawal of Application (1) Except as provided in 205 CMR 111.05(2), a written notice of withdrawal of an application or renewal papers may be filed by an applicant, qualifier, licensee or registrant at any time prior to final commission action thereon. (2) A withdrawal request submitted in accordance with 205 CMR 111.05(1) shall be permitted without the need for commission approval except under the following conditions, in which cases no withdrawal will be allowed without express commission approval upon a finding of good cause: (a) If a hearing on an initial application or renewal has been requested by a party or directed by the bureau or commission; (b) If the application or renewal matter has been transmitted to a bureau presiding officer; (c) If the application or renewal matter has been assigned to any other hearing examiner authorized by law to hear such matter; or (d) If the commission has made a determination to hear the application or renewal matter directly. (3) If the commission agrees to grant withdrawal under any of the circumstances in 205 CMR 111.05(2), the commission may condition that withdrawal with appropriate terms it deems necessary, including, but not limited to, a period of time within which the applicant may not re-apply. (4) Any person or entity holding a credential issued by the commission, including, without limitation, a license or registration as a key gaming employee, a gaming employee, a gaming vendor, gaming service employee, or a non-gaming vendor may offer to surrender such credential by written request signed by the credential holder or a person authorized to sign on behalf of an entity. Surrender shall be for a term of five years from the date the request is granted by the commission. No refund of any kind shall be authorized or granted in connection with the surrender of a credential. Surrender shall be granted at the sole discretion of the commission.

REGULATORY AUTHORITY 205 CMR 111.00: M.G.L. c. 23K, 4(37), 5, 9, and 12.

ADDENDUM 061

205 CMR: MASSACHUSETTS GAMING COMMISSION 205 CMR 112.00: Section 112.01: Additional Information 112.02: Obligation to Cooperate 112.03: Obligation to Provide Truthful Information 112.01: Additional information (1) The commission, the bureau or their agents and employees may request additional information and documents from an applicant for a gaming license including all qualifiers, key gaming employee license, gaming employee license, gaming service employee registration, any vendor license or registration, or any other license or registration required in accordance with M.G.L. c. 23K or 205 CMR throughout the application review process including after the application has been deemed administratively complete under 205 CMR 111.00: Phase 1 Application Requirements and 205 CMR 118.03: RFA-2 Administrative Completeness Review. Failure by the applicant to timely submit the additional information as requested by the commission, the bureau or their agents and employees may be grounds, in the discretion of the commission, for denial of the application. (2) All applicants, licensees, registrants and qualifiers under M.G.L. c. 23K and 205 CMR shall comply with all requests of the commission, the bureau and their agents and employees for information and documents as authorized by M.G.L. c. 23K and 205 CMR. 112.02: Obligation to Cooperate (1) Applicants, licensees, registrants and qualifiers shall respond within ten days or within the time specified in an information request by the commission, the bureau and their agents and employees under 205 CMR 112.01 to said information request. (2) All applicants, licensees, registrants and qualifiers under M.G.L. c. 23K shall have a continuing duty to provide all information and documents requested by the commission, bureau, and their agents and employees and to cooperate in any investigation or hearing conducted by the commission, bureau, and their agents and employees, as authorized by M.G.L. c. 23K. Without limitation, an applicant, licensee, registrant and qualifier shall have a continuing duty to provide updated information to the commission, the bureau and their agents and employees in connection with the Phase 1 investigation by the bureau pursuant to 205 CMR 115.03: Phase 1 Investigation and Recommendations by the Bureau, the Phase 2 application review conducted in accordance with 205 CMR 118.00: Phase 2 Administrative Proceedings, an investigation commenced after submission of an application for licensure or registration in accordance with 205 CMR 134.00: Licensing and Registration of Employees, Vendors, Junket Enterprises and Representatives, and Labor Organizations and any hearing by the commission or the bureau pursuant to 205 CMR 101.00: M.G.L. c. 23K Adjudicatory Proceedings. (3) If the commission determines that an applicant, licensee, registrant, or qualifier has knowingly withheld information, knowingly failed to provide information or documents requested by the commission, bureau, or their agents and employees, or knowingly failed to cooperate with any investigation or hearing conducted by the commission, bureau, or their agents and employees, the commission may, with respect to such person: (a) Find that person ineligible to hold a license or registration or be qualified in connection with a license; (b) Suspend the relevant license, registration or qualification; or (c) Revoke the relevant license, registration or qualification. 112.03: Obligation to Provide Truthful Information (1) No applicant, licensee, registrant or qualifier shall knowingly provide materially false or misleading information to the commission, the bureau, or their agents and employees. REQUIRED INFORMATION AND APPLICANT COOPERATION

ADDENDUM 062

205 CMR: MASSACHUSETTS GAMING COMMISSION 112.03: continued (2) If the commission determines that an applicant, licensee, registrant, or qualifier has knowingly provided materially false or misleading information to the commission, the bureau, or their agents and employees, the commission shall, with respect to such person: (a) Find that person ineligible to hold a license or registration or be qualified in connection with a license; (b) Suspend, condition or revoke the relevant license, registration or qualification.

REGULATORY AUTHORITY 205 CMR 112.00: M.G.L. c. 23K, 4(37), 5, and 13.

ADDENDUM 063

205 CMR: MASSACHUSETTS GAMING COMMISSION 205 CMR 114.00: Section 114.01: 114.02: 114.03: 114.04: 114.05: Application Fees Payment of Application Fees Community Disbursements Additional Fees for Investigations Non-refundable Application Fees FEES

114.01: Application Fees Pursuant to M.G.L. c. 23K, 15(11), each applicant for a gaming license shall pay to the commission a nonrefundable application fee of $400,000 to defray the costs associated with the processing of the application and investigation of the applicant; provided, however, that if the costs of the investigation exceed the initial application fee, the applicant shall pay the additional amount to the commission within 30 days after notification of insufficient fees or the application shall be rejected. 114.02: Payment of Application Fees For a gaming license, the applicant shall pay the initial non-refundable application fee of $400,000 by certified check or secure electronic funds transfer made payable to the "Massachusetts Gaming Commission." The applicant shall submit this initial non-refundable application fee with its initial application and response to the RFA-1 process set forth in 205 CMR 110:00: Issuance of Request for Category 1 and Category 2 License Applications; provided, however, that an applicant for a gaming license may submit the initial non-refundable application fee before the submission of the initial application and response to the RFA-1 process provided that such early submission shall be accompanied by a certification in a form required by the commission confirming the applicant's intention to apply for a gaming license pursuant to M.G.L. c. 23K and the applicant's acknowledgement that the fee is non-refundable. 114.03: Community Disbursements (1) Pursuant to M.G.L. c. 23K, 15(11), not less than $50,000 of the initial application fee for a gaming license shall be used to reimburse the host and surrounding municipalities in accordance with 205 CMR 114.03 for the cost of determining the impact of a proposed gaming establishment and for negotiating community impact mitigation agreements. (2) (a) Based on a letter of authorization to the commission signed by authorized representatives of an applicant and a host or surrounding municipality or by an applicant and a regional planning agency, the commission may, at any time and from time to time, make community disbursements to that host or surrounding municipality or regional planning agency from available amounts paid by that applicant to the commission for community disbursements. If the total amount of payments authorized by an applicant exceeds the initial $50,000 amount, the applicant shall immediately pay to the commission all such additional amounts authorized by such letters of authorization for community disbursements. If the applicant fails to pay any such additional amount to the commission within 30 days after notification from the commission of insufficient funds, the application shall be rejected. (b) 1. In addition to the process provided in 205 CMR 114.03(2)(a), 21 days after the execution of the host community agreement, or, in the case of a prospective surrounding community to a Category 1 gaming establishment, at any time within 90 days prior to the deadline for submission by an applicant of an RFA-2 application for a Category 1 gaming license, or, in the case of a prospective surrounding community to a Category 2 gaming establishment, at any time within 60 days prior to the deadline for submission by an applicant of an RFA-2 application for a Category 2 license, any community that believes it may be a surrounding community to the gaming establishment that is the subject of the host community agreement may apply to the Commission for community disbursements without a letter of authorization signed by the applicant. To do so, the community must submit an application on a form provided by the Commission and shall identify all legal,

ADDENDUM 064

205 CMR: MASSACHUSETTS GAMING COMMISSION 114.03: continued financial and other professional services deemed necessary by the community for the cost of determining the impact of the proposed gaming establishment and for the negotiation and execution of a host or surrounding community agreement and the attendant costs. Further, the application shall include a statement from the community attesting that a request for the subject funds was made directly to the applicant and denied, and that a copy of the application was served upon the applicant prior to being filed with the Commission. An applicant may file a response to the request for funds no later than seven days after service of the application by the community. The Commission may take action on the application either upon administrative review of the filings or it may convene a hearing on the application at which it may allow presentations from the community and applicant. 2. The Commission may approve the application upon a finding that there is a reasonable likelihood that the community will be designated a surrounding community pursuant to 205 CMR 125.01, that the request is reasonable in scope and that the risk that the community will not be able to properly determine the impacts of a proposed gaming establishment without the requested funds outweighs the burden of the actual financial cost that will be borne by the applicant. 3. If the application is approved, the community shall be designated a surrounding community for the limited purpose of receiving funding to pay for the cost of determining the impacts of a proposed gaming establishment and for potentially negotiating a surrounding community agreement. Such determination, however, shall not be considered evidence that the community receiving disbursements is or should be designated as a surrounding community pursuant to 205 CMR 125.01. 4. The Commission shall make the approved community disbursements from available amounts paid by the applicant to the Commission for community disbursements. If the total amount of payments authorized by the Commission exceeds the initial $50,000 amount, the applicant shall immediately pay to the Commission all such additional authorized amounts for community disbursements. If the applicant fails to pay any such additional amount to the Commission within 30 days after notification from the Commission of insufficient funds, the application shall be rejected. (3) If 30 days have elapsed after the final issuance, denial or withdrawal of an application for a gaming license and there remains a balance of funds previously paid by the applicant for community disbursements and not previously encumbered or disbursed pursuant to 205 CMR 114.03(2), the funds shall be distributed as follows: (a) If the funds represent a remaining balance of the initial $50,000 portion of the $400,000 application fee filed in accordance with M.G.L. c. 23K, 15(11), the funds shall be deposited in the Community Mitigation Fund established in accordance with M.G.L. c. 23K, 61; or (b) If the funds represent monies paid to the Commission by the applicant in accordance with 205 CMR 114.03(2)(a) or (b)4., the monies shall be refunded to the applicant. (4) The provisions of 205 CMR 114.03 do not prohibit community contributions permitted and reported in accordance with M.G.L. c. 23K, 47, and 205 CMR 108.02: Mandatory Disclosure of Political Contributions and Community Contributions. 114.04: Additional Fees for Investigations (1) Pursuant to 205 CMR 114.00, the applicant shall be responsible for paying to the Commission all costs incurred by the commission, directly or indirectly, for conducting any investigation into an applicant. As required by the procedure established pursuant to 205 CMR 114.04(5), the applicant shall pay to or reimburse the commission for all such investigation costs that exceed the initial application fee. (2) For purposes of 205 CMR 114.00, the costs for conducting any investigation into an applicant shall include, without limitation: (a) All costs for conducting an investigation into an applicant and its qualifiers, the applicant's affiliates and close associates, and any other person subject to the jurisdiction of the commission under M.G.L. c. 23K relating to the application in question; and

ADDENDUM 065

205 CMR: MASSACHUSETTS GAMING COMMISSION 114.04: continued (b) All fees for services, disbursements, out of pocket costs, allocated overhead, processing charges, administrative expenses, professional fees, and other costs directly or indirectly incurred by the commission, including without limitation all such amounts incurred by the commission to and through the bureau, the division, the gaming enforcement unit, the gaming liquor enforcement unit, and any contractor investigator. (3) The commission in its discretion shall establish, and, post on its website, a schedule of hourly fees, wages, applicable fringe benefits, payroll taxes, overhead rates and other charges to be assessed by the commission to applicants for in-house personnel, services and work of the commission, the bureau, the division, the gaming enforcement unit, and the gaming liquor enforcement unit for conducting investigations into an applicant pursuant to 205 CMR 114.00. (4) The commission shall assess to the applicant all other costs paid by or for the commission, directly or indirectly, to any other person for conducting an investigation into an applicant plus an appropriate percent for overhead, processing and administrative expenses. (5) The commission in its discretion shall establish, and post on its website, a procedure by which it will calculate, assess, invoice, collect, require payment for, account for and reconcile payments by applicants to the commission for the costs for conducting any investigation pursuant to 205 CMR 114.00. In the case of a gaming license applicant, this procedure may include, without limitation, the requirement for the applicant to fund in advance a force account held by the commission and to maintain therein and replenish a minimum required balance of at least $100,000 against which the commission may charge, with interest at 1% per month and late payment penalties, any costs for conducting the investigation not timely paid by the applicant in response to an invoice from the commission. 114.05: Non-refundable Application Fees (1) All required application fees and community disbursements pursuant to 205 CMR 114.00 shall be non-refundable, due and payable notwithstanding the withdrawal or abandonment of any application. (2) In connection with an application for a gaming license, the applicant, its affiliates, and each party to any agreement to purchase or lease the land for a gaming establishment, to own the gaming establishment, or to manage the gaming establishment shall be jointly and severally liable for any amounts chargeable to the applicant pursuant to 205 CMR 114.00.

REGULATORY AUTHORITY 205 CMR 114.00: M.G.L. c. 23K, 4(26), (37), 5, 10(d), 15(11), 19(b), 20(f), 21(b), 22, 26, 30, 31, and 47.

ADDENDUM 066

205 CMR: MASSACHUSETTS GAMING COMMISSION 205 CMR 115.00: PHASE 1 SUITABILITY PROCEDURES DETERMINATION, STANDARDS AND

Section 115.01: 115.02: 115.03: 115.04: 115.05: Phase 1 Determination Standards Phase 1 Procedures Phase 1 Investigation and Recommendations by the Bureau Phase 1 Proceedings by the Commission Phase 1 Determination by the Commission

115.01: Phase 1 Determination Standards (1) Phase 1 Determination Standards. The commission shall not issue an affirmative determination of suitability for any Category 1 or Category 2 applicants unless: (a) The applicant meets the standards in M.G.L. c. 23K, 12, 16, 46 and 47. (b) The applicant complies with the provisions of 205 CMR 111.00: Phase 1 Application Requirements and 205 CMR 115.00. (c) The commission has determined that the applicant has demonstrated financial stability pursuant to 205 CMR 117.00: Phase 1 Determination of Financial Stability. (d) All qualifiers under 205 CMR 116.02: Persons Required to be Qualified have been determined to be suitable by the commission or received a waiver under 205 CMR 116.03: Waivers. (2) Burden of Proof. All applicants for a Phase 1 suitability determination must establish their qualifications by clear and convincing evidence. 115:02: Phase 1 Procedures (1) When a completed RFA-1 application is filed, the application shall be referred by the commission to the bureau for a determination of completeness and investigation. (2) Determination of Administrative Completeness. After receiving the application containing the information required by 205 CMR 111.02: Business Entity Disclosure Form - Category 1 and Category 2 Entity Applicants and Holding/Intermediary Companies the bureau will either determine that the application is sufficiently complete for purposes of initiating substantive review or request additional information from the applicant. (3) Notice. After the bureau has determined the application to be administratively complete pursuant to 205 CMR 111.02(2): Business Entity Disclosure Form - Category 1 and Category 2 Entity Applicants and Holding/Intermediary Companies, the commission shall notify the applicant of the determination and notify the public that an application has been filed. 115.03: Phase 1 Investigation and Recommendations by the Bureau (1) The bureau shall conduct an investigation into the qualifications and suitability of all applicants and qualifiers, as provided for in M.G.L. c. 23K, 12 and 16. The bureau may conduct the investigation, in whole or in part, with the assistance of one or more contractor investigators pursuant to 205 CMR 105.10: Authority to Retain and Utilize Contractor Investigators. (2) At the completion of the bureau's investigation, it shall submit a written report to the commission. At a minimum, this report will include: recommendations pursuant to M.G.L. c. 23K, 12, 14(i) and 16 and findings of fact pursuant to M.G.L. c. 23K, 17(f) relative to the suitability of the applicant for a gaming license. 115.04: Phase 1 Proceedings by the Commission (1) After the commission has received the bureau's report under 205 CMR 115.03(2) it shall provide a copy to the applicant and shall initiate a process for a public hearing or adjudicatory proceeding.

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205 CMR: MASSACHUSETTS GAMING COMMISSION 115.04: continued (2) Applicant's Notice of Claim. If the applicant contests any of the bureau's recommendations or findings of fact it shall file a notice of claim with the commission within 30 days of receipt of the bureau's report. (3) Adjudicatory Proceeding. If the applicant files a Notice of Claim pursuant to 205 CMR 115.04(2) or on the commission's own initiative, the commission shall conduct an adjudicatory proceeding pursuant to 205 CMR 101.03: Special Procedures for Hearings before the Commission on the Phase 1 report by the bureau concerning the applicant pursuant to 205 CMR 115.03(2). The commission will issue a public notice in advance of the adjudicatory proceeding stating the date, time and place of the hearing. (4) Public Hearing. If the bureau's suitability report under 205 CMR 115.03(2) recommends an unconditional positive determination of suitability for the applicant, without findings of fact that are contested by the applicant, then the applicant may request and the commission may waive the need for an adjudicatory hearing concerning the bureau's report, in which case the commission shall review the bureau's suitability report in a public hearing, subject to redaction of confidential and exempt information described in 205 CMR 103.02(1) through (5). The commission will issue a notice in advance of the public hearing stating the date, time and place of the hearing and the form (oral or written) and conditions pursuant to which the commission will receive public comments. 115.05: Phase 1 Determination by the Commission (1) After the proceedings under 205 CMR 115.04, the commission shall issue a written determination of suitability pursuant to M.G.L. c. 23K, 4(15), 12 and 17. (2) Negative Determination. If the commission finds that an applicant failed to meet its burden of demonstrating compliance with the suitability standards in M.G.L. c. 23K and 205 CMR 115.00, the commission shall issue a negative determination of suitability. (3) Positive Determination. If the commission finds that an applicant has met its burden of demonstrating compliance with the suitability in M.G.L. c. 23K and 205 CMR 115.00, the commission shall issue a positive determination of suitability which may include conditions and restrictions. (4) The commission shall not entertain a Phase 2 application for any applicant unless and until the commission has issued a positive suitability determination on that applicant. (5) No Appeal from Commission's Determination of Suitability. Pursuant to M.L.G. c. 23K, 17(g) the applicant shall not be entitled to any further review. (6) A host community may not hold an election in accordance with M.G.L. c. 23, 15(13) until the commission has issued a positive determination of suitability to the applicant in accordance with 205 CMR 115.05(3) unless the following conditions are satisfied: (a) Prior to the request by the applicant for an election in accordance with 205 CMR 124.02(1), the governing body of the community formally approves of holding the election prior to a positive determination of suitability having been issued to the applicant by the commission; and (b) at the expense of the applicant, prior to the election the community has conducted a process for informing the community about the commission's determination of suitability standards and procedures, which shall include, but not be limited to, the provision of a notice designed to be received by voting households within the community informing such households that an election is to be held for which the applicant has yet to be issued a positive determination of suitability, that the commission will make its determination of suitability after completing a thorough background investigation of the applicant, its principal operating officers and investors, and that the commission will not permit the applicant or its principal operating officers or investors to proceed with the application unless it determines that they are suitable to operate a gaming facility in Massachusetts. The content of the notice

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205 CMR: MASSACHUSETTS GAMING COMMISSION 115.05: continued shall be forwarded to the commission for approval prior to dissemination. A description of other methods to so inform the community about the commission's determination of suitability standards and procedures shall also be forwarded to the commission prior to holding of the election. Any failure to issue the notice to one or more voting households shall not be deemed by the commission to be a failure to meet the requirements of 205 CMR 115.05(6), provided that a community demonstrates reasonable efforts to comply with the requirements of 205 CMR 115.05(6).

REGULATORY AUTHORITY 205 CMR 115.00: M.G.L. c. 23K, 4(37), 5, 12, 13, 14(i), 16, 17, 46 and 47.

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205 CMR: MASSACHUSETTS GAMING COMMISSION 205 CMR 116.00: Section 116.01: 116.02: 116.03: 116.04: 116.05: 116.06: Persons Required to be Licensed Persons Required to be Qualified Waivers Notification of Anticipated or Actual Changes in Directors, Officers or Equivalent Qualifiers Notification of New Financial Sources Notification Concerning Certain New Qualifiers of Holding, Intermediary or Subsidiary Companies and New Qualifying Entities 116.07: Qualification of New Qualifiers 116.01: Persons Required to be Licensed No Category 1 or Category 2 license shall be issued by the commission or shall remain in effect unless and until the applicant and all qualifiers identified in 205 CMR 116.00 have been found by the commission to meet all standards necessary for a Phase 1 determination of suitability under 205 CMR 115.00: Phase 1 Suitability Determination, Standards and Procedures. 116.02: Persons Required to be Qualified (1) The following persons shall be required to qualify as part of the Phase 1 determination for a Category 1 or Category 2 license: (a) If the applicant is a corporation: 1. Each officer 2. Each director 3. In the judgment of the commission in accordance with this M.G.L. c. 23K: a. each shareholder holding 5% or more of the common stock of the company b. each lender c. each holder of evidence of indebtedness d. each underwriter e. each close associate f. each executive g. each agent h. each employee (b) If the applicant is a limited liability corporation: 1. Each Member 2. Each transferee of a Member's interest 3. Each Director 4. Each Manager 5. In the judgment of the commission in accordance with M.G.L. c. 23K: a. each lender b. each holder of evidence of indebtedness c. each underwriter d. each close associate e. each executive f. each agent (c) If the applicant is a limited partnership: 1. Each General Partner 2. Each Limited Partner 3. In the judgment of the commission in accordance with this M.G.L. c. 23K: a. each lender b. each holder of evidence of indebtedness c. each underwriter d. each close associate e. each executive f. each agent PERSONS REQUIRED TO BE LICENSED OR QUALIFIED

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205 CMR: MASSACHUSETTS GAMING COMMISSION 116.02: continued (d) If the applicant is a partnership: 1. Each Partner 2. In the judgment of the commission in accordance with this M.G.L. c. 23K: a. each lender b. each holder of evidence of indebtedness c. each underwriter d. each close associate e. each executive f. each agent e. In all cases, any person who, in the opinion of the commission, can exercise control or provide direction to a gaming licensee or applicant for a gaming license or holding, intermediary or subsidiary companies thereof. (2) Other Qualifiers. The commission may, at its sole discretion, require other persons or companies that have a business association of any kind with the applicant to undergo a Phase 1 review and determination process under 205 CMR 115.00: Phase 1 Suitability Determination, Standards and Procedures. These affiliated companies or persons include, but are not limited to, holding, intermediary or subsidiary companies of the applicant. 116.03: Waivers (1) The commission may in its discretion waive qualification requirements for the following persons under the following conditions: (a) In the case of applicant corporations and holding, intermediary and subsidiary corporations, those persons holding less than 5% of the common stock of the company; (b) In the case of institutional investors, if the institutional investor holds less than 15% of the stock of the applicant, holding, intermediary or subsidiary company; (c) In the case of persons involved in the financing of the gaming establishment provided: 1. A lender to an applicant or licensee that is obtaining financing for the construction or operation of a Category 1 or Category 2 facility shall be required to be licensed unless the following apply: a. The lender is in the business of providing debt or equity capital to individuals or entities; b. The loan is in the ordinary course of the lender's business; and c. The lender does not have the ability to control or otherwise influence the affairs of the applicant or licensee. 2. A lender that is required to be licensed may lend to an applicant or licensee if the lender has filed a completed application in accordance with 205 CMR 101.00 to 117.00 and has received lender authorization from the commission or bureau. 3. A person that acquires a debt instrument issued by an applicant or licensee in a public or exempt private offering shall not be required to be licensed if: a. The person does not have any right or ability to control or influence the affairs of the licensee; and b. The person's acquisition of the debt instrument is in the ordinary course of business and is not part of a plan or scheme to avoid the requirements of this section. 4. Notwithstanding any provision to the contrary in 205 CMR 116.00, the commission may require the licensure of any person that holds a debt instrument issued by an applicant or licensee if the commission has reason to believe that the person would not satisfy the requirements of 205 CMR 101.00 through 117.00 or M.G.L. c. 23K; or (d) In the case of any person that, in the opinion of the commission cannot exercise control or provide direction to a gaming licensee or applicant for a gaming licensee or a holding, intermediary or subsidiary company thereof. (2) In determining whether to waive qualification requirements under 205 CMR 116.03(l) , the commission shall consider whether the person seeking the waiver obtained its interest for investment purposes only and does not have any intention to influence or affect the affairs of the applicant or any affiliated companies thereof.

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205 CMR: MASSACHUSETTS GAMING COMMISSION 116.03: continued (3) Any person may seek a waiver under 205 CMR 116.03(l) by filing a petition with the Commission pursuant to 205 CMR 102.03(4); provided, however, that the commission or the bureau may require the submission of any such information deemed necessary to act on the request for a waiver or, at any time, if the commission or the bureau has reason to believe that the person would not satisfy any of the requirements of 205 CMR 101.00 through 117.00 or M.G.L. c. 23K. (4) Any party granted a waiver under 205 CMR 116.03 which subsequently anticipates engaging in any activity that will or could influence or affect the affairs or operations of the applicant or the holding, intermediary or subsidiary company thereof, shall provide not less than 30 days' notice to the commission of such intent and the party shall not exercise any influence or effect on the affairs or operations of the applicant or the holding, intermediary or subsidiary company thereof unless and until the commission issues a determination of suitability under 205 CMR 115.00: Phase 1 Suitability Determination, Standards and Procedures for said party. 116.04: Notification of Anticipated or Actual Changes in Directors, Officers or Equivalent Qualifiers (1) Each Category 1 and Category 2 applicant or licensee shall notify the commission, in writing, as soon as it becomes aware, of the proposed appointment, appointment, proposed nomination, nomination, election, intended resignation, resignation, incapacitation or death of any qualifier. (2) Upon receipt of a notice under 205 CMR 116.04(1), the commission shall refer the matter to the bureau for appropriate handling including, but not limited to, a notice to the new qualifier requiring the filing of an appropriate application and the subsequent investigation of that application. 116.05: Notification of New Financial Sources (1) Each Category 1 and Category 2 applicant or licensee shall immediately notify the commission, in writing, as soon as it becomes aware that it intends to enter into a transaction bearing any relation to its gaming establishment project that may result in new persons involved in the financing of the gaming establishment. (2) Upon receipt of a notice under 205 CMR 116.05(1), the commission shall refer the matter to the bureau for appropriate handling, including, but not limited to, a notice to the new financial source requiring the filing of an appropriate application and the subsequent investigation of that application. 116.06: Notification Concerning Certain New Qualifiers of Holding, Intermediary or Subsidiary Companies and New Qualifying Entities (1) Each Category 1 and Category 2 applicant or licensee shall immediately notify the commission, in writing, as soon as it becomes aware of any new persons required to be qualified in connection with the holding, intermediary or subsidiary company of that Category 1 or Category 2 applicant or licensee in accordance with M.G.L. c. 23K. (2) Upon receipt of a notice under 205 CMR 116.06(1), the commission shall refer the matter to the bureau for appropriate handling, including, but not limited to, a notice to the new person requiring the filing of an appropriate application and the subsequent investigation of that application.

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205 CMR: MASSACHUSETTS GAMING COMMISSION 116.07: Qualification of New Qualifiers No new qualifiers may perform any duties or exercise any powers relating to the position that said qualifier is seeking to assume until qualified by the commission.

REGULATORY AUTHORITY 205 CMR 116.00: M.G.L. c. 23K, 4(37), 5, 12, 14, and 16.

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205 CMR: MASSACHUSETTS GAMING COMMISSION 205 CMR 117.00: Section 117.01: Phase 1 Determination of Financial Stability 117.01: Phase 1 Determination of Financial Stability (1) General. An applicant for a Category 1 or Category 2 license must demonstrate that it has the financial stability to construct and operate a gaming establishment. (2) Phase 1 Financial Stability Standards. In determining whether an applicant is financially stable at the time of the Phase 1 determination, the bureau and the commission shall review the Phase 1 application in accordance with the following standards: (a) The ability to maintain a typical gaming establishment payroll and equivalent provisions adequate to pay winning wagers to gaming establishment patrons when due. (b) The ability to meet ongoing operational expenses which are essential to the maintenance of continuous and stable gaming establishment operations. (c) The ability to pay, as and when due, all local, state and Federal taxes, including the taxes and other fund payments imposed by M.G.L. c. 23K. (d) The ability to make necessary capital and maintenance expenditures in a timely manner which are adequate to ensure maintenance of a superior, first-class facility of exceptional quality. (e) To the extent known at the time, the ability to pay, exchange, refinance, or extend debts, including long-term and short-term principal and interest and capital lease obligations, which are expected to mature or otherwise come due and payable during the license term, or to otherwise manage such debts and any default with respect to such debts. (f) Any other relevant matters that the commission may deem appropriate for evaluation. (g) The bureau and commission may also evaluate the applicant's historic gaming industry or commercial performance, if any, that are relevant to the criteria set forth in 205 CMR 117.01(2). (3) Any finding of financial stability for purposes of the Phase 1 determination of suitability, shall not be binding on any finding of financial stability for purposes of any Phase 2 determination of suitability by the bureau or the commission. REGULATORY AUTHORITY 205 CMR 117.00: M.G.L. c. 23K 4(37), 5, 9 and 12. PHASE 1 DETERMINATION OF FINANCIAL STABILITY

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205 CMR: MASSACHUSETTS GAMING COMMISSION 205 CMR 121.00: Section 121.01: Licensing Fee 121.02: Payment of the Fee 121.01: Licensing Fee (1) Within 30 days after the award of a Category 1 license by the commission, the licensee shall pay a non-refundable license fee of $85,000,000 to the Commission. (2) Within 30 days after the award of a Category 2 license by the commission, the licensee shall pay a non-refundable license fee of $25,000,000 to the commission. (3) Within 30 days after the award of a Category 1 or Category 2 license by the commission, the licensee shall remit: (a) a license fee, as provided by M.G.L. c. 23K, 56(a), of $600 for each slot machine referenced in 205 CMR 119.01(45) and approved by the commission for use by a gaming licensee at a gaming establishment; and (b) a license fee, as provided by M.G.L. c. 23K, 56(c), to be determined by the commission upon issuance of the license, to cover costs of the commission necessary to maintain control over gaming establishments, in proportion to the number of gaming positions projected for the gaming establishment; provided, however, that such assessment may be adjusted by the commission at any time after payment is made where required to reflect a licensee's actual share, and accordingly, the license may be required to remit additional funds or a credit may be issued towards the payment the following year; and (c) a license fee, as provided by M.G.L. c. 23K, 56(e), to be determined by the commission upon issuance of the license, reflecting the applicant's share of $5,000,000 to be deposited into the Public Health Trust Fund in proportion to the number of gaming positions projected for the gaming establishment; provided, however, that such assessment may be adjusted by the commission at any time after payment is made where required to reflect a licensee's actual share, and accordingly, the license may be required to remit additional funds or a credit may be issued towards the payment the following year. 121.02: Payment of the Fee (1) All fees shall be submitted in the form of a certified check or secure electronic funds transfer payable to the "Massachusetts Gaming Commission." (2) In the event that a licensee fails to pay the fee as provided in 205 CMR 121.01, the commission may take any remedial action it deems necessary up to and including revocation of the gaming license. LICENSING FEE

REGULATORY AUTHORITY 205 CMR 121.00: M.G.L. c. 23K, 4(26); 4(37); 5; 10(d); 11(b); and 56.

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