Okay, I'll get it started. Okay, excellent. Good to go. Okay. Good morning, everyone. This is a convening of the Massachusetts gaming commission. We are holding this meeting virtually. So I do a roll call. Good morning, commissioner, Brian. Good morning. I'm here. Good morning, commissioner Hill. Good morning. Good morning, commissioner Skinner. Good morning. Good morning, commissioner Maynard. Good morning, commissioner Hill. Good morning, commissioner Skinner. Good morning. Good morning. Good morning. Good morning. Good morning. I was taking an extra set of copy because we're starting a little earlier than our normal 10. Convening at my name. Today is April 13th. And it is public meeting number 448. And we're going to get started with our minutes. Commissioner Hill. There was one moment. Sorry about that. No problem. So madam chair, I move that the commission approved the minutes from. The November 14, 2022 public meeting that are included in the commissioner's packet subject to any necessary corrections for typographical errors or other non-material matters. Second. And that's missions. Okay. Commissioner Brian. Hi. Hi. I'm just getting. Hi. Commissioner Maynard. Hi. And I vote yes. So five zero. Before we get started, I just want to let the public know that we will not be turning to item number four. Our agenda today regarding the executive director's annual review and the setting of her compensation has. Absolutely nothing to do with executive director Wells. We just had some logistical issues that we want to address. Before we turn to that. Okay. So we're going to turn to item number four. Okay. So we're going to turn to item number four. And I think. Race we might be. Able to turn. To that. Perhaps for the April 24th. And so if you could look to see if that timing might work. That would be excellent. Okay. Okay. Thank you so much. All right. So we're going to turn right to. Legal. And we have a few regs to address today. Good morning. Good morning. I'll tee it up. So this morning commissioners, we have three regs that we'd like to walk through with you to our new one is revised. They deal with. Sorry. The building facilities and the cat twos. And then they also deal with temporary licensing procedures. So the first drug we'd like to take up is 205 CMR 222. And for that, I'm going to ask Todd to do a brief intro before we turn it over to Paul. And I interrupt before you get started on this read, there is an update. I realized that we didn't really have a commission on update initiative update on today's agenda. And I did want. To bring. Provide an update on a regulation that we addressed earlier. I know there's a little bit of. Public interest in. In a deadline. So thank you. Absolutely. Good morning. Madam chair commissioners and all who are joining. Thank you. Thank you. Specifically, there was an inquiry, I believe, relative to the effective date. For the advertising regulations and the amendments there too, specifically the section that addresses. The CPA and revenue sharing section. And the answer is, and I'll ask. Caitlin to. Correct me if I'm getting this wrong at all, but they go into effect tomorrow. So we're going to go into that section. And we're going to go into that section. And we're going to go into that section. And we're going to go into that section. And that is the publication date for the register. Put out by the secretary of the commonwealth. So tomorrow is the effective date for that. The question was specific. The fact that we had. We had adopted a suspension of the reg through tomorrow. Which actually allowed for the rev share and a higher rate. If you recall that detail. I don't know if you just want to elaborate on just that piece. What does that mean for that issue? I think what that would mean is that when the new reg goes into effect tomorrow, the waiver that the commission had originally issued on the older version of the reg. We'll end. And so the, as of tomorrow, the new version of 256, the advertising reg will be fully in effect. And so. There's a question for that. In very short, without getting into all the details CPAs would be allowed and rev sharing would not be allowed. I am interested in one question commissioners. If I recall correctly, there were, I think, five. Companies that did. Seek to have a licensure. see it with that. I'm not sure what whether we have any standard procedure or reg that addresses would address that fee. So I can manager I can check with Kara Bryant on the status of the licensure and the fees and we could report back with some kind of proposal because I understand if someone has paid a large fee and then we have said not to go forward with that kind of licensure we should consider some kind of equitable resolution. That would be helpful. I don't I can't remember the amount but I don't think it was necessarily small dollars. So that would be helpful.  Anybody want to add anything? All right. Thank you. That would be helpful. Thanks, Todd. Thank you. Caitlin now I interrupted you. Thank you so much. Oh, thank you. So the first regulation before you this morning is 205 CMR section 222. And this pertains to the capital investment and monitoring of project construction. It specifically pertains to the category two facility to be constructed. And as you'll see and as described in the memo, it's largely the draft before you is largely modeled after the corresponding provisions in the 100 series of regulations which were employed for purposes of oversight and construction of the category one facility that applied to the three casinos, if you will. You may have had a chance to read the public comment that was submitted by Rainham Park relative to this section. And I just wanted to address some of the issues that were raised in that particular letter. There were concerns expressed relative to the scope of this particular regulation and a suggestion that it essentially would be an ultra virus regulation, meaning beyond the scope of the commission's authority to adopt regulations like this. And before we embark on walking through the regulation, I did want to address that particular issue. I think the best place to start in determining whether a regulation is within the scope of the commission's authority is by looking at the authority itself. And I don't necessarily subscribe to the rationale that is laid out in that particular letter. So I did want to just point out some of the areas that I think are important in evaluating. The place to start here is in section four, which is the provision, the section of chapter 23 and the talks about generally the regulation that will be adopted by the commission. And as you'll recall, there are some places that get very specific and others that are more general. And it starts with just the proclamation in subsection A that the commission shall regulate the conduct of sports wagering under this chapter. And that's where we begin. I don't know if it's just me on my end, but you're like freezing on me a few times. I'm sorry. I wasn't sure if it was mine. She's there, so I'll double click. Thank you. I can always tell when everybody's sort of looking like it, but it takes us all about the same number of times before we realize it's not us and it's something else. So thanks, Todd. Probably if you just start back right where you paragraph you were just starting with. Absolutely. Can you am I okay now? Yeah, we'll let you know if we'll let you know if there's a problem again. Thank you on your end. Yeah, working from the home office here. The Internet's not quite as strong as the headquarters, but anyway, so we were looking at section four of chapter 23 and the first provision there little A says that the commission shall regulate the conduct of sports wagering under this chapter. And that is the core directive that the law gives the commission to regulate the conduct of sports wagering paragraph B and there on gets into the manner in which the regulations are to be adopted and some of the content of that is required or maybe included in the regulations and paragraph B begins by saying that the commission shall promulgate rules and regulations necessary for the implementation, administration and enforcement of this chapter. And that's important because as as we've seen over the past number of months, not every single regulation that has been adopted and reviewed by the commission has been specifically enumerated and identified in this section. There are some provisions of the regulations that are necessary to ensure that the law can be properly implemented and that the commission can properly administer the law that have to be adopted that aren't specifically set out here in section four. And one of the areas just by way of background and refresher that is set out, for example, are identified in section C where the law says that the commission shall promulgate regulations that prohibit and then it goes into a number of things include including the use of personal biometric data and certain types of advertising. So there are certain things that the commission absolutely had to include in its regulations. There are other things that are discretionary. And in determining whether a regulation is comfortably within the bounds of your discretion, the question ultimately is, is it necessary for the implementation, administration and enforcement of this chapter? And in order to answer that question, you have to apply a measure of discretion to determine what's necessary and what isn't. And when it comes to section 222, the regulations you have before you, it is absolutely true that section four of 23 and does not discuss the oversight of the construction of the facility being constructed for the category two operator. However, the issue is addressed in the definition section, which is section three of 23 and where the category two license is defined and provides that the licensee shall make a capital investment of not less than $7.5 million within three years after receiving a sports wagering license. So certainly it's appropriate to have regulations in place that clarify and outline how that will come to be. And that is what section 222 is aimed at. I think it's also important to recognize that over the course of the past number of months since the commission has endeavored to stand sports wagering up and promulgated a series of regulations that we've looked at, then there has been certainly an interest expressed that the law be implemented with a similar rigor that the gaming law was, meaning that there will be a mechanism so that we can ensure there be strict oversight and a rigorous regulatory scheme in place. And that is what we have done. And so again, the fact that a particular issue is not specifically outlined in section four is not the end all be all when it comes to the scope of the commission's authority. In fact, it's just a consideration to look at here. So I think the import for today's purposes, while we look at section 222, is to understand that this draft is being brought to you so that you can understand the full scope of your options. And it's our position that if you are so inclined that it would be within your authority to adopt regulations of the sort that you have before you here today. That being said, with this particular regulation and all in general, when you're looking at the draft, you should consider whether you think that a particular provision is necessary in order to ensure that we implement and can administer the law properly. And we can go through each one and you can draw certain conclusions. I think there is one section in particular that we could look at and say, well, it's yes, it is absolutely necessary. And that's the section where we outline how one will go about calculating the seven and a half million dollar capital investment. That is in there. That is I think unquestionably important. And something that should absolutely be included. The rest of the provisions are important as well. But you may decide that this particular facility is different in character and in scope than the category one gaming establishments that were constructed. And the Commission may have a different interest in the oversight than it did in that case. And if that that is true, then some of the provisions in the draft before you may not be absolutely necessary, in which case we should remove them. And so that's I just wanted to offer that general backdrop to those comments. I think it does make sense to look at the draft here today. See whether the Commission is has a general consensus as to whether there are certain pieces of language that should be included or shouldn't be included. And we can take it from there. Of course, we can always step back if there are large swaths that the Commission is uncertain about. And we can do a deeper dive on some of them. But again, I think it would be helpful to at least start to go through them here today. So that's that's just a little bit of background. We can circle back to this as we go through different provisions. But that's I think the delay of the land as it pertains to the Commission's authority to adopt regulations and this one in particular. I'd be happy to try to address any overarching questions or concerns before we jump in to the actual language. Second Director Wells, did you end up receiving additional comments on this matter? Yes. So the one thing I wanted to bring to your attention and thank you to Mills for finding the comment that I had been in touch with a woman. Her name is Carol Derringer. She had a very much of an interest in the portion of the right that deals with women owned businesses because she is a women owned she has a women owned business. And so she had we had had a discussion I indicated that we were having a public hearing a Monday she couldn't attend that meeting. So I'll just read into the record she sent into the MGC comments. Hello I'm requesting that the project construction for the new facility governed by the Massachusetts Gaming Commission have MWBE contractor percentage compliance the same as the other gaming facilities on court MGM the partition participation compliance is very important to the small diverse business community and invites a fair and equal opportunity for contractors that will likely not participate without the percentage in place. And she said thank you. So I had been in touch with her and let you know that she definitely had an interest and I'm sure she will be tracking this. So I wanted to make sure we hear that comment as well as we received the comments from Rainham but this will also understand our process will also be looking for comments written comments from on this particular regulation. Caitlin Absolutely. So this is just the first time you've seen it. And so our standard procedure would be the Commission would review it today. We take questions you could decide to vote on it today or you could decide to defer a vote to a future date and request more information but after the initial assuming this is put into effect by emergency, once the vote is taken, then we put it out for public comment. We take in public comments both in writing and through public hearing. So yeah, this is just the very, very first step in the process. Just happened to have one written comment that we included in today's program. Okay, next. So do you want to walk us through this, this fragment and who's who's leading this? Paul is going to be our man on the ground today. Good morning, Ernie Commoners. How are you, Paul? Good morning, Madam Chair. I'm good. Thank you. So we will pick up 205 CMR 222 beginning on page 25 of your packet. So all of these definitions are drawn from 205 CMR 135. We may fold them into 205 CMR 202. Eventually, there are other places where these terms may become useful. Because of the timing and the promulgation status of 202, we decided to put them in 2201 for the moment. So moving on to the next page in 2202. The key thing that I want to direct your attention to on this page is 2202. This subsection requires the operator submit what we're calling a project plan that contains three key components, detailed MWVBE commitments, the project schedule, and an initial design and design narrative for commission's review. The commission reviews and decides whether to approve that project plan. And once there is an approved project plan in place, that becomes the central document for evaluating the state of the project and the operator's progress over time. Subsection three on the bottom of this page allows applicants to revise their project plan in the event of unforeseen or changed circumstances that will affect the timeline or require a major change to the construction plans. Subsection four requires operators to report quarterly on the state of the project. And we require them to report on all of the key components of the project progress towards the capital expenditure requirement, which supports the statutory requirement, how construction is, how construction is proceeding towards the completion of the project, and reporting on the demographics of laborers and utilization of MWVBEs. This subsection is consistent with the parallel subsection in 205 CMR 135. But one option that can commission could consider here would be to require operators to do the same reporting but in longer intervals, such as every six months. Can I just pause for a second? We have heard from Rainham, I believe in public meetings, if not on roundtables, then you can correct me on that. But I understand that would be not going to be corrected, that construction is well under way. Because there was a question around when that 7.5 million dollars needed to take effect. If we're looking at this reg, knowing that this particular category two applicant might have construction underway, does that matter to us? Yes. So that, that's a question that I've been aware of, and that's addressed later on in the reg. The statutory requirement is that a category two licensee, pardon me, make a capital investment of at least 7.5 million dollars within three years after receiving a sports wage or a license. And our understanding of the statute in our position is that that after is significant. Only capital expenditures made after made after the issuance of the license count. And that is embedded in the regulation in a few places. We did receive a suggestion shortly before the meeting, that we maybe put that maybe add another sentence that metaphorically speaking is in 14 point bold with font in red, so that it is absolutely unmissable within the regulation. The other place. Madam, Madam chair, you're not quite audible to me. I might be the only one. No, I don't know why I'm having trouble with my microphone recently. Sorry, Paul, can you hear me now? I can hear you. Okay. I just missed your last statement. You couldn't hear me and I couldn't hear you. I think I couldn't really, I didn't understand it. So I hear you, but just go over that point one more time, please. So there's been a there was a suggestion received shortly before the meeting that we make it absolutely unmissable within the regulation that pre licensure, pre licensure expenditures do not count towards the capital investment requirements. And we were planning to add a sentence to that effect at a minimum before this is brought back for final adoption. And if the commission chooses not to vote on this today and see a revised regular later date, we would add that between now and then. Okay, can you hear me now, Paul? So when we are looking at these provisions, let's just say the project schedule, they may have to change everything up because they were building beforehand. So all of these requirements, they'll have to ship kind of mid construction. I understand there's the amount issue, but there's also all of these construction process driven regs that will go into effect regardless of what was underway, right? The major step in this regulation that I think could frustrate operators if they're licensed in the midst of their construction project is, I I think it's a lot of just fixing the volume. Very good. Is design review. And I do think it might, it may make sense to require commission input, but not the same degree of oversight as what's currently in the draft regulation into design review. But a project plan could, a project schedule and MWBB commitments could potentially be forward looking from the point of, from the point at which the project plan is submitted. And what has been done beforehand could be simply treated, simply treated as water under the bridge. They would still have the obligation to spend the seven and a half million dollars looking forward. And that is the major, that is one of the major regulatory books for the commission here. So I think it's perfectly reasonable to expect them to only start counting their expenditures once there's a commission approved plan on place. Commissioner O'Brien, are you leaning in? No. Can everybody hear me a little bit better? Grace, thank you. All right. Okay, so that helps me think about this. Paul, thank you as we go through. So I was just coming up on 222.03, which is going to begin at the bottom of page 28 and go on to page 29. Briefly, this sub this section allows the commission to weigh in on the schematic design phase, the final site plan at architectural design package and construction packages for review, just like you weighed in on in the same steps in category one applicants. As I mentioned earlier, there was an initial design phase in this section in 135. In this case, we rolled it into the project plan into a five CMR 2202, which I will never get sick of saying 2204 allows the commission to inspect worksites and related documents. I think this is important for the commission's authority to ensure that the ultimate gaming facility is both being constructed as promised and and safe and appropriate for the public. 2205 requires the operator to certify that it has reached the final stage of construction. If the commission approves the certification, it releases a $750,000 bond that the operator was required to take out to guarantee the final stage of construction. So this bonding requirement, I believe appeared in chapter 23K and was incorporated into the it was incorporated into the gaming regulations, whether to include this here is a policy choice within the commission's discretion for all of the reasons that Todd laid out earlier. The point the trade offs are to ensure that the Commonwealth enjoys some benefits from projects, even if the development or the operator falls through and it also provides a tool to ensure that the operator moves on the timeline that they they promised. On the other hand, as even this lawyer can tell you 10% of one of north of 100 million dollars is considerably more money than 10% of seven and a half million dollars. And so the risk of an operator falls through and the benefit of bond is eventually forfeited to the Commonwealth are not as meaningful. So 2206 concerns discipline. The major piece of this and I realized while I was preparing for today that subsections four and five needs to be renumbered as one and two respectively, is the first subsection, which provides that if the operator fails to make the seven and a half million dollar capital expenditure required by chapter 23 and within three years, the commission shall suspend or revoke its license and may impose other discipline. One question for the commission's consideration here is whether this should be a a shall a mandatory suspension or revocation or a may. This is the first place of two where the regulation requires that spending be done in accordance with the project plan as we discussed earlier. This is this is the requirement that spending made before there's improved project plan in place does not count towards the capital expenditure requirement. As I said, there were we did receive a suggestion that this be made even more even more obvious through another sentence the regulation somewhere we will try to develop something. The second subsection in 2206 provides a non exhaustive list of other grounds for discipline. 2207 capital investment sets out what costs can be included and excluded in the calculation of the capital investment. We reviewed the lists of includeable and excludable costs in in the gaming context and we thought that they and we thought that they were about right. So we adopted them. And finally 2208 returns is returns to this policy choice regarding bonding requires the operators here in a positive point of $750 cash dollars ensuring that the operator will carry out its project. Can we go back to 2206, please? I know we're going to go back and think about this rag, but you mentioned the shell versus the May missionaries. How do you feel about that? Should we? Can I test actually a follow up on that? Is that so you're saying that it's the shell isn't necessarily mandated by the language in the statute? The statute says that the operator shall make an expenditure with it of seven and a half million dollars within three years of life licensure. So it's clear that that is a mandatory obligation of the licensee, but there are cases where the commission could discipline somebody short of suspension of the license for a mandatory obligation. Yeah, so I'm just trying to reconcile why it would be mandatory and then we would decide not to let them basically keep moving forward even though they hadn't met what the legislature wanted as a mandatory provision. So I'd love to have a conversation. If people feel differently, I'd love to sort of think about reasons why we would do a main set of a shell. Well, mine is very simple because I can't sit here and think about the fact that there may be a tornado or a hurricane or there may be some pandemic or something that arises that could happen in three years that I would just soon retain discretion with the understanding that there is a statutory obligation, but that would allow us to have some options that might be short of suspension or something different than suspension or revocation. It might be an assessment of mine rather than that and have them know maybe they had a strike, you know, maybe they've got an employee issue going on. I just don't know, so because I can't imagine what might interfere with their timeline, I like the idea of generally keeping our discretion. I'm wondering if that kind of concept is captured by language that says more to the effect of it shall be unless, you know, the commission decides under, you know, extraordinary circumstances have been met. You know, I'm worried about the May being too broad in terms of diffusing the mandate of the shell and the statute, so is there a way to put it in that's a shell, but then specifically saying under extraordinary circumstances or because I think we've used that terminology, that phrase, in other parts of our regs. I could put in extraordinary circumstances language. I could set a suspension or revocation as a default rule so that the regulation says shall be suspended or revoked unless the commission decides to impose other appropriate discipline. We can certainly craft something that puts a thumb on the scale towards suspension or revocation. Right. I guess I'm more comfortable with that kind of approach to it. I don't know, Cathy, if you feel differently. I'd be fine with that as long as there's some some discretion because otherwise Right. Like you said, it demigods again and all of a sudden it's a shell and they go to reopen or something. The commission is going to, were you leaning in? Alright, Commissioner Hill, I don't know. I was just going to agree with both of you. That's language that I could, I could live with. I too just want to make sure that the commission has some discretion should something happen that is just beyond what we're thinking about today. So I'd be okay with that type of language, Paul. Thank you, Commissioner Hill. Commissioner Skinner, I'm sorry if I missed you. I was looking at Commissioner O'Brien. Likewise, I agree with Commissioner O'Brien and the language, excuse me, that attorney commoness has proposed. Commissioner Maynard. I'm assuming that if Paul comes up with some language that Eileen was talking about that we would be able to move forward on that. Yeah, okay, good. So just something that's not quite a shell. Alright, I have a question. Chair, I'm sorry. Yes, Governor. I know the language was, some of the language was adopted from the 100 series regulations. What's the language there? Is it a shell or May if this was adopted from the 100 series? Do we know that? If not, it's fine. This might have been because it related to the 75, 75 million. It might have been different, right, Paul? I would have to confirm but I don't believe there was a parallel provision in the 100 series. Yeah, but there was certainly a requirement for certain investments. So I was just wondering if we have a similar provision in the 100 series that dictates a shell as opposed to a May. Right, I don't believe there was a parallel provision but I can check. Thank you. I think it's a little bit more complex on the gaming side. It's in the statute. It's actually not in the regulation. I don't think it actually tethers that to commencing operations specified in the construction timeline within one year. And it says there that they shall be subject to suspension or revocation of the license by the commission after hearing. And maybe assess the fine of up to 50 million dollars. So it's a little bit different but it was similar in many ways. Right, I would say a key difference in the 100 series though is that the opening date is tethered to the project schedule, not the date of licensure. And there is provision in the regulations for the amendment of a project schedule where the date of licensure obviously can't be amended. So while you're on the subject of the project plan and schedule and attaching that to the issuance of the license, in the definition section 221, excuse me, 222.01, the project definition, it says construction of or on the category two sports waging facility in order to meet the required capital investment as approved by the commission and defined in the sports wagering license. What does it look like to have the capital investment defined in the license when at that point we're not presuming that the project plan would be submitted at the same time, right, during during application review are we? I was just confused by that a little bit. No, I think I think it would make sense to take that phrase out. Can we go through the the rag a little bit with a little bit more nuance now and to just see if there are questions? I know that Paul kind of looked through but as there are particular questions, I know that we're going to get comments. I have, there's one other thing in the definition section that I can hit for you if that'd be helpful now. The definition of VBE can be amended. That reflects the old definition that pertained to gaming where you may recall there was some adjustment in the law as to whether certain enterprises could be considered VBEs and we used to certify them here ourselves at the commission and then the office of supplier diversity started doing it so there's some language as you'll see at the end of the VBE definition that can be taken out. It should really just probably say the term VBE shall only include entities certified as such by the supplier diversity office or verified with the U.S. Department of Veteran Affairs. You don't really need all that other stuff. That's from the second paragraph of that definition talk. Yeah. That's also mentioned in the first paragraph as well about the licensing division. Okay. Yeah. So we might need to amend the whole VBE definition just to be a little bit straighter. And we're sure that with respect to the MBE and the WBE that the two councils that are mentioned are still the Massachusetts certifying agency. I mean I couldn't I couldn't say for sure. I think we can check with them. Yeah. The supplier diversity office certainly is still the agency that's primarily responsible. I am not sure on the other ones that we referenced there but people primarily go to SDO to begin with. Well and I think that that's yeah I think we want to be consistent with with that. It's actually it's been elevated in terms of its status in the government. Not sure. Yes it's a standalone operation now and as opposed to being under whatever the. Well I don't know if they changed where it's strictly you have for the supplier diversity purposes if they need to be certified strictly through through their office or not. Yeah we can certainly double check that. Yep that's all good. All good. So I don't know if you were inclined to go through it section by section but there is one other important thing that I just wanted to mention and that is it's in 07. I think as you'll see we've cross-referenced the provisions of section 122 which lay out the areas and items that can be included as part of the capital investment and the ones that have been can be excluded. I think you're going to want to look at those before we move forward with this so you can see which ones are in and which ones are out. There are some areas in there that there were carve-outs made for Region C so I don't think you want to just adopt this as is. You'll want to look at those specific areas and make a decision here and for example Natal I'm not following you I'm so sorry you're in 2207. It's yes 2207 and you'll see in sub 2 A and B it gets into the areas that can be included and excluded from the calculation of capital investment so it's a really important provision because it discusses how you calculate the capital investment and there are specific things that have been identified that you can include and that you can bring up those because somebody bring up 122 123 one through 10 for us so that thanks. I can show it to you. Thanks so much. And I'm going to ask Chief Delaney if you have thoughts as we go along chime in this is your area of expertise. Okay. So let me see anticipating the next question let me see if I can make this bigger. Thanks. So one these are costs that are included in the calculation of capital investment and you know the first one is pretty straightforward the actual the costs related to the actual construction so certainly those things the theory is by the way that the commission operated under in the past is that you want to ensure that there is a facility worth about seven and a half million dollars standing there at the end of the day at least seven and a half million dollars so that was the rationale that was applied and figuring out which be included or excluded and you'll see when we get to the things that are excluded that the determination at that time was essentially that those things don't really contribute to the overall facility they're really just costs that go along with construction in general and so they were excluded but these things here on this list and we can go through them if that would be helpful. Let's go through them. Yeah so I guess that's the question to be thinking about as we go through them is do you think that these should be counted towards a seven and a half million minimum investment is that what we're looking for and so one I would suggest is certainly something you would want to include that's the cost of the actual construction and I just want to pause commissioners I'm like and we can't see you so please just interrupt and raise any questions you have about these particular items. Okay already had time so number two is the cost related to the preparation of the site any clearing demolition and abatement that was determined to be something that could be included and that's that's number two costs related to the design of the project including the building design interior and exterior site design so those aren't actual building you know construction costs per se but those were deemed to be something that can be included in the value of the project. Number four the costs associated with consulting and due diligence necessary to fund studies and devise engineering solutions including traffic studies environmental studies and other again those were deemed that looks relevant to 23k yep all right in this case you know to the extent any traffic studies or environmental studies have been conducted though those would be areas that they could include in the calculation just to be clear going forward after licensure and project plan approval Kailin could you repeat that please sorry just to be just to be clear on tents costs that are incurred after licensure and project plan approval not you know if a traffic study was conducted a month ago that's what that's just the clarification I was making so number five is the costs associated with minimizing the environmental impact of the project including upfront costs they've been minimizing a carbon footprint or implementing sustainable elements and or smart growth practices that's again number six costs associated with designing improving or constructing the infrastructure inside the property boundaries related to drainage utility support roadways interchanges things along those lines and then it says provided however and this is again a provision of chapter 23k any infrastructure improvements necessary to increase visitor capacity and account for traffic mitigation for the category two gaming establishment meaning in this case maintenance part on the gaming side shall not be considered part of the capital investment number seven costs associated with pre-opening purchase of fixtures equipment and gaming equipment IT equipment personal property to be used including things within hotels restaurant retail and other service businesses associated so that's all this the furnishings that were necessary to get the facility up and running not the construction of the building but the stuff inside so with respect to this particular facility are we talking about anything to do with simulcast equipment that's a good question that's something that we could specify here and here of course we we use the term gaming equipment I mean presumptively it would include sports wagering equipment not the gaming equipment but I think given these few little nuance it might make sense even though it's not as efficient for you to probably enumerate these into and put them into our rack I think that's probably right so maybe we can just go through them today and get a general sense as to what people think about them and then we can go back and do that uh-huh yeah so number eight is permitting costs associated with applying for the permits that are necessary to construct the facility and remedy any issues with the land number nine professional and management fees for engineers, architects, developers, contractors if they represent indirect and overhead costs related to the development of the project and do not represent profits or payouts as part of partnership agreements essentially and none of this this is these are only can be applied post the issuance of our license well that's so that's what the statute says and you know to the extent that you find that to be playing on its face then then that's it and we should be clear about that period number 10 are costs associated with safety training quality assurance or testing incurred during the construction those are considered in 11 and 12 was is the point I was referencing earlier there were a couple of carve outs that were added into this regulation when region C was being looked at with the understanding that the financing of a project in region C was a little bit different than it was in regions A and B so these costs were allowed to be included in the cost of capital investment even though they were not for regions A and B and number 11 is capitalized interest so the you know related to the financing of the project if they had to pay interest cost those were not allowed to be counted towards A and B but they were towards region C and number 12 and perhaps equally as important here are the costs associated with designing improving or construction the infrastructure outside the boundary the property boundaries so that is important because when it came to regions A and B the rule was that any work that had to be done outside the boundary of the property in order to you know get the property ready for patron traffic and otherwise were excluded because they were not considered capital costs associated with the construction of the facility there was a carve out for region C where the commission said in that case you can include those types of roadway or utility improvements that have to be made even though they're not on the property itself so that's the end of the list of items that are in number 11 and 12 in particular we should think about whether you'd want to include those in this case and I'll just note that the draft does not include them 11 and 12 that is because it's just 1 through 10 yeah yeah Madam Chair to your point to your point earlier is there a catch-all provision that would give is there you know and any other costs that the commission shall be you know necessary I'm just trying to think of of I'm trying to think of things that may come up that we're not thinking about right now this second I don't think there's a catch-all anywhere I'm just looking through yeah there was no catch-all you know and the casino gaming side of course they had to lay out in advance as as this regulation requires before you what all the costs are and calculated in advance so it's not not kind of like a rolling tally it's more like if they have to identify the costs up front and then of course they get adjusted as we move through the construction but everything was I believe neatly if you will categorized in advance so any questions as to whether things were in or out were a resolved prior that's just how it worked in the first instance so I think what I'm hearing you say is that we would have that kind of discretion and practicality as we were moving forward yeah I think well I think that's absolutely right I think you you hold that discretion in any event but I think ultimately we were able to categorize everything in one way shape or form under the existing language when we went through the the casino got it investments you know and I think a lot of this you know we went into a lot of specificity but it really came down to just a few things building costs onsite building costs design costs and you know that was pretty much you know and and site preparation costs you know and and they were able to enumerate those I mean it's it's pretty standard in construction I don't think you're going to find something that doesn't appear on that list miraculously coming up from anyone saying oh we got this other thing that really should be considered capital that you don't have listed thank you Joe I'm kind of sleepy lawyer still in me does like that kind of a catch on phrase phrase about Jordan the just in case so and we can certainly add the just in case just in case yeah thanks for sure I don't I don't have a great objection to adding that catch all but I heavily favor consistency wherever possible unless there is an extreme circumstances that requires a departure from what is already laid out in another landscape so you know I I would certainly encourage Council Grossman to draft that catch all language but I would really be looking to understand a little bit more why we deem that necessary that language necessary for under sports wagering 23N when we didn't deem it necessary under 23K well we can yeah absolutely we can certainly prepare some language and we can kind of determine whether that's something that Commission is actually interested in including excluding when we take a final look at this and again of course the the applicant at this point will have a chance to look through this as well and offer any comments if there are any areas that aren't covered and they are I think they pretty much know what the general costs probably are right now so they can look at the list and see if we've missed anything or things that they'd like to clarify that just also clarify Todd you're saying applicant but this would also apply to the other category to potential applicant subject downs yes yeah just wanted to make sure that we absolutely I see that in any future applicants I see that Derek's raised his hand how can we help you today Derek you're going to help us just a clarification on this and this gets back to a lot of things and I'll usually key in on so GAP creates basic standards for when you can capitalize something and turn it into an asset and when you cannot and each entity actually has to set a different policy in a different written standard for what threshold they will use for capitalization of projects and what the commission did here is try to standardize that and not go based on what each different entities accounting rules were so you know what you're looking at why the catch all isn't there is because GAP's already defined it and this is then going down and saying this we're going to allow it no matter what your dollar threshold is so if you're saying that a vehicle or something or a piece of equipment that you're going to put on the floor has to be 20,000 or 50,000 we don't care we're going to allow the $2,500 piece to go on there because we want all the entities be treated the same so that was the rationale when we first went through this whether that maintains today or not I just wanted to give some concept as to where it's coming from and why that catch all isn't there okay should we move on to the thank you could we move on to the exclusion list then please of course so this is the section 122.04 which is cross-referenced in the draft you have before you and these again are items that are excluded so the first one is cost associated with the purchase or lease or optioning of land where the facility will be located the theory was is that the land the facility is situated on doesn't contribute to essentially how the final building will actually look and you know they're at least on the gaming side there are different costs associated with the land and to allow it would possibly have skewed what the final projects would have looked like so that's why the cost of the land or acquiring the land in some way was excluded and that's recognized here number two are carried interest costs and other associated financing costs and the cross-reference you see here is to the capitalized interest I believe the terminology is that was identified in the cost that could be included for a category excuse me for region C so I think this is an area you're going to want to you know consider whether you want to include or exclude any financing costs associated with the project C or cost associated mitigating impacts on host and surrounding communities as set forth in host and surrounding community agreements I don't know that there are any here may necessarily but those were out when it came to the casino review for this again is that the one we talked about on the the other side of the ledger which were included for region C but as you can see here are excluded for regions A and B so you'll need to make a decision on this one Do you know the rationale for that Tom? for oh yeah so the infrastructure outside the property boundaries for region C I think as a general matter I'm working off of memory from like eight years ago or whatever it is but in general there are just different economics associated with region C and Derek may have a clear memory I see he just popped on as well and so you know the commission carefully went through all of the costs that were included or excluded and to the extent there were some that were comfortable they were comfortable with including that did add to the value of the project the capital value of the project they allowed them for region C in order to help make it more of a viable area but Derek I don't know do you have any you want to add to that Todd's exactly correct region C was looking at different tax rates because well not tax rates for the operator but we had the travel compact in region C as well and we're looking at what was feasible and if you look at those decisions that's what it came down to was it actually a feasible project where are you ever going to get your investment back as an operator was the Commonwealth going to get a sustainable entity so they were trying to get the project to meet the guidelines as laid out in the statute while creating some flexibility that may not be their understanding treatment of capital assets so that's why you see those and the the definition of you know just that gaming establishment and allowing things outside of the gaming establishment to be to be allowed to be calculated there so Todd was correct all economics based all what they were looking at in that in that area with two facilities being proposed in relative proximity to each other and one having a much lower tax rate so how do you get the other one to be viable okay want to go on Todd thanks yeah so number five is legal fees so any obviously that's fairly straightforward those are all out you can't include those towards capital costs promotional communication marketing costs prior to an attributable to efforts of a local referendum so that that doesn't apply here but any communications and marketing costs would be out those are not considered generally to be capital costs they were excluded see number seven fees and cost paid to the commission in accordance with sections 15 10 11 and or fees so those and or similar fees and cost paid to municipalities I'd have to go and look at all those sites I think there those are some of the investigatory fees and other things along those lines I don't know if anyone has a clear memory Joe did you just pop in there yeah the 85 million bucks that they each that was the 85 million okay yeah which we don't have here whatever it would be the same license what is it a million dollar license fee that they have to pay yeah that will not be included as a capital cost because that's just cost to do that's for the temporary licensure so eight is licensing costs including any cost payable to the commission to obtain pre-licensing of individuals or vendors so any employee licensing things like that are out number nine costs associated with marketing advertising or promotions again not considered capital costs so those number 10 upfront cost designed to implement workforce development plans again very important but not considered a capital cost so those were considered again similar at number 11 upfront cost designed to implement efforts to combat problem gambling and or support the efforts of the commission's research agenda critically important but not considered capital costs so those were excluded as well and 12 political contributions and community contributions under section 108 also out and not considered capital costs so that's the list of excluded cost in contrast to the ones that are included we can certainly polish it up a little bit but if there were any that jump out that you think should move from one side of the ledger to the other we can take note of that now otherwise we can sleep on it and come back to this and let me stop my sharing for a moment commissioners can I just have an update for you well maybe I should ask this question first Todd given Mr. Nozzle's comments I'm presuming that the draft read was shared with the applicant in advance of today's hearing I you know I'm not exactly I assume we followed our ordinary course I don't I don't know that it was shared with them specifically so Caitlin yeah so we follow the normal course here which is that we drafted the regulation we posted it on you know we've circulated in the packet posted on the website and then would move forward today with the discussion it is not the normal procedure to share a draft reg with operators or potential operators prior to the first appearance before the commission so it was posted yesterday two days in advance I assume of the meeting with um oh just but the the draft language that was only the agenda was 48 hours in advance but the um language itself oh the yeah I'm not actually sure when the packet went up on the website so he was just reacting generally without having a language yeah in fairness no I think he saw it okay I I suspect he saw it but it would have been whenever it was posted on the website his reaction was quite specific to the language of the regulation so I do believe he saw the language that we had posted the language on the website the reason why I'm asking is we've received a request on the other category to license to not take action today because they have not seen it and I'm actually inclined to not want to take action yet without further you know now that I've got more perspective to assess this this detailed reg I might want more time before we even you know if we were to act on the same emergency situation I don't commission what you're thinking we can continue to go through the reg and ask detailed questions but I just wanted to pass them on the update Karen do you have any more details on that no just just what you had indicated that the Suffolk group the first one that reached out to me that they just are seeing it for the first time this morning so they requested the opportunity to comment before the commission takes action on it yeah and again I just want to make abundantly clear that it is not commission can obviously do whatever it wants to do but it is not the normal course that the operators or potential operators comment before the initial vote usually the vote happens and then there's the opportunity for comment and of course we take all comments very very seriously and review them so happy to continue to walk through and get your opinions and thoughts and then give us things to go back and think about or to take it up another day I only asked about Khaled the reg was shared because Suffolk just hadn't seen it but they might not have been following just our website as closely yeah but Mr. Nosell must have seen it on the website and as did the other comment the other commenter that Karen read that comment into the record commissioners how are you feeling about this this regulation do you want to if we're going to move forward I think I'd like to have more detailed discussion I don't want to trouble you if you're inclined to want to hope Commissioner Skinner I'm actually okay with moving forward I'm taking action on this regulation today I'm given that that's how we've been conducting a business thus far I don't see a reason maybe I should explain my thinking why I'm a little bit more comfortable Commissioner Skinner is because this doesn't trigger until they get a license in any case so I guess I'd want to make sure it was was more right than tons of corrections but that was my thinking I do know it is a little bit different but does anybody does everybody in agreement with Commissioner Skinner if we're going to move forward then I'd like to go through the let me respond to your your rationale I think it makes sense because it's if we're basing the delay on the timing issue I think it's it makes sense I don't have an objection to just postponing the discussion today you know I think even in the memo no wrong memo I'm getting ahead of myself I think you know if we're not if you know we haven't granted a license yet and I don't think that we are scheduled to review an application until a couple weeks out so I think if we have time to postpone this for a little bit then then yeah we should do that and that would be just as a courtesy to the existing category two license or the category two licensees right now can anyone may be weighing in does that does that mean that people can't comment but don't we allow the comments all the time anyway so we I guess what I might suggest is we can make sure that the two potential category two licensees have the draft we can put it back on the agenda maybe on the 24th or the or either April 24th or May 4th in the near future we'll give them the opportunity to send in some sort of initial comments it's not a normal procedure but we can absolutely take the comments early and then walk through it in a meeting that is soon I know it won't trigger until a license is actually granted but you know I would I do think it makes sense to have it in place before the hearing process because it does impact again review of plans and that kind of thing so I wouldn't want to wait too long to to get it into effect I can be persuaded to move forward commissioner so just um that request did come in from subject downs and I wanted you to know about it and I was already thinking to myself that today's discussion is proving to be very helpful for me commissioners now we move forward and then get the comments and the ordinary due course and that this would be in effect because I understand that we know the process commissioner hill I don't see why we wouldn't wait until maybe the 24th to have a further discussion on this madam chair I don't think we need to move forward today on okay commissioner meaders I'm fine with them holding for the reasons you explain madam chair mr. brilliant so I can go either way I think we're going to get the comments prior to moving on any application and cat too so my question really is what is the what's the most streamlined way to do this for legal is it to hold off for two weeks and then incorporate any comments at that point even though that's a little atypical but is that the sort of cleanest way to do this that's actually what I was thinking of I mean commissioner brian but then I realized that you know to commissioner skinner's earlier point it might seem less consistent so I don't want to write in any way challenge but it was for efficiencies I think we can absolutely do that that would be fine Grace how's that April 24th meeting shaping up um I'll definitely take a look at it and see what we can add we might need to add some time on to that meeting okay great thank you thank you so much all right so commissioners before we move on then are there specific questions that you have that might be helpful for legal before they take a look at this again yes madam chair on the exclusions the list of items excluded from the capital investment requirement council grossman will you also be enumerating those in the new draft yeah I think that makes good sense to just to have the included and excluded lists so everyone can see them without referencing or having to go to the 100s here okay thank you and then back to the definitions section the definition of small business an entity including all of its affiliates combined I'm struggling a little bit with that language does does that mean that any affiliates have to have a principal place of business in Massachusetts as well I think that is meant to cover that is meant to apply to the number of full-time employees and gross revenues but I would I can check on that before we bring this back yeah and if not that we just need to tweak the language a little bit and then I had a question it just speaks more to the comments that we got from the category to applicant for sports wagering around the definition of small business federal versus Massachusetts does that have any implication the concerns raised does it implicate in excuse me implicate any issues for the commission to consider I can speak to that so I also saw that comment in the letter and went back and took a quick look here chapter 30a section one defines what a small business is for the purpose of the small business impact statement and it says that a small business is a business entity your agricultural operation including its affiliates that one is independently owned and operated two has a principal place of business in the Commonwealth and three would be defined as a small business under the applicable federal law as established in the United States code and promulgated from time to time by the United States small business administration so if you look at that first requirement of being defined as a small business in the state it's independently owned and operated here we know that MGA is not going to be independently operated and we know that based on the conversations that we've had about the contract between MGA and Caesars and the operation of the sports book so here I would say that MGA does not qualify as a small business for purposes of the what we're talking about here and for the small business impact statement and so we would stand by the small business impact statement as drafted I would also note that the requirements in the small of a small business impact statement is to answer certain questions set out in statute set out in chapter 30 a but it is not that no harm there's no harm to a small business as may have been suggested so we stand by the small business impact statement as it's drafted in the packet okay thank you that's very helpful and then generally you know I understand the letter that we got on behalf of Rainham it contains a general objection to promulgating these regulations but the specific objections seem to focus on the requirements dealing with equal opportunity and diversity equity and inclusion and I'm a little dismayed by that it's you know something that this commission takes very seriously and you know essentially to read three pages of why the regulations shouldn't apply particularly around the diversity component is a little frustrating and concerning to say the least can I do a follow-up on that with respect to the regulation language itself can we just confirm and maybe you've done this Todd and Katelyn and Paul under the to be to ensure that that language is up to date and executive A&F's administrative bulletin number 14 is accurate making sure that we're if this is language that tracks 23k this language may have affirmative action program of equal opportunity whereby the licensee establishes specific goals want to make sure are we we double-checked and we'll triple-check oh so it is all it is reflecting the the language of that I believe that is still the the operative document but we will triple-check that's a document cited in chapter 23k and Paul is just confirming that it's still my point is I'm not I'm saying 23k might be dated so if we could make sure that that language that we're using tracks the most up to date language these kinds of programs and incentives do you see what I might so you're saying tracks 23k exactly well Paul is saying the bulletin 14 is still in effect okay and the language that we're using as descriptive language is still the the correct language Paul I don't know off the top of my head whether we check that we'll check that as well you just check that thank you it may well be I just want to make sure that area of the law has changed as you know continues to be evolving thanks anything else commissioners in terms of the details that you want to flag are legal to take another second look on Joe you don't you're not raising any particular concerns I'm assuming that you were consulted during this process yeah I was you know one of the things that I I had raised was you know whether or not there's really a need for a bond on this you know when we did the big casinos we had a 10% bond on the construction amount and you know if if if the schedule was not adhered to we could take that bond we could also find them I think up to $50 billion on top of that I mean there was definitely a a push to get those casinos operating quickly where today we already have multiple opportunities for sports wagering you know I don't know if time and it's and there's a three-year statutory requirement that they have to have their capital improvements done I'm not sure what what that does for us if particularly I think that gets back to the initial question that I just mentioned which is whether a particular regulatory provision is necessary to ensure the effective administration of the chapter and you know looking at the bond requirement is one piece of that and you know we should look at each individual piece since it's been raised and be comfortable that it is necessary and along as Paul pointed out along with the bond requirement goes a different section which is the final stage section which is the only reason that's in there is because under chapter 23k the bond is released at the final stage of construction so if there's no need for a bond it doesn't matter when the final stage of construction is really so those are there are a lot of inter interwoven parts here yeah and I guess the only other thing that I would say is that some of these provisions are are quite detailed you know things about the project schedule that talks about you know having every sort of every piece of the design laid out and so on and you know probably appropriate for a billion dollar casino but maybe you know the level of details probably not quite as as pertinent to something on such a small scale as this you know the regs give us lots of there's some discretionary provisions on design and other things that you know while certainly it reserves the commission's right to do certain things I'm not sure that the commission will do some of those things with respect to some of the very fine details of the design although you you can certainly do that so you know again this thing was really designed or a lot of this was designed for you know a capital investment of 500 million dollars and set out some oversight requirements this is certainly distinctly less than that so of course having all of these provisions that's that's fine but it seems like in some respects they they kind of push a little bit further than then maybe necessary and the only other consideration is that you know all building construction is overseen by the municipal building department so it's not as though there's no oversight of construction the project would still be permitted and overseen at the municipal level and to Joe's point in the case of the casinos it was determined that it was important that the commission have more of a role in ensuring that the facilities were being constructed consistent with the plans and not and not just be left entirely to the municipal building department to ensure that that was met and of course Joe played a much wider role than just making sure the building was built correctly but that's just something to bear in mind Joe it's interesting to me that you raised that bond issues issuance how burdensome is that on the application it's not particularly I mean they have to go to a bonding company and they purchase a bond and it costs them I don't know what the value the cost of the bond is based on how much the bond is you know obviously a 50 million dollar bond is going to cost you more than a seven and a half million dollar bond or a six to this case 750,000 dollar bond so I don't think it's a tremendous expense it's just again to what purpose to do we hold it I mean we even kind of had those arguments on the casinos it's like well we have this bond what what do we do if we take it are we going to build a casino ourselves you know I mean and so so that sort of was always a little bit of a question but that was the one and if I recall correctly in terms of I know a matter that's very important to you in the capital to be included in the capital investment list included anything related to needs certification environmental yeah you know I think on that list there I mean like you know anything that's part of the building construction anything that's frontage as fixtures and equipment you know those are the those are really the big capital pieces and anything that's associated with green infrastructure is is part and parcel of one of those anyway so if it isn't articulated I think I I think I saw it but I might be imagining it that maybe we would want to include that affirmatively yeah I think that was in there Todd I think so I think we talked about just if we could double check yeah certification to me you know and certification I don't know do we wouldn't we want to include as capital investments measures taken that are green in nature even if it doesn't lead to certification I believe this this is 12035 costs associated with minimizing environmental impact thank you thanks yeah and I I mean I don't think there's any as far as I know that the the law doesn't require any lead certification for these sportsways during facilities no it doesn't but to the extent the capital investments can encourage that yeah great okay thank you other other comments questions okay then we'll we'll move on to the next one does that make sense Caitlin at this point absolutely this has actually been a really helpful conversation we've got some work to do so we'll we'll make a revised draft we'll take a look at whatever comments we receive from the potential operators and we'll come back I can work with grace on whether it's the 24th or April 4th we'll get it right back to you as soon as we can great thank you okay thank you really good job new new area for us to switch our brains to all right and now I'm going to ask you to switch your brains back to an old area just when I was getting comfortable there Paul all right so 205 CMR 219 and 231 work together so I'd like to go through both before the commission considers whether to vote on either so returning to page page 12 of your packet for 219 although this is where I will sorry oh pardon me I'll ask you to turn to page I'll ask you to pull up the red line but Caitlin helpfully circulated and start on the second page of that for those following along at home this is comparable to page 13 of the packet okay everybody did you find the red line can I be so before I dive into any of the language of the regulations I want to refresh the commission on the overall how this fits into the overall licensure structure and some of the choices that were made along the way and what legal what instructions legal received in developing these ranks so as you all know under the structure that the commission has adopted the commission issues the operator a temporary license until the IEB is able to adequately investigate the operator and the commission can make a decision on whether to find the operator durably suitable or find the operator unsuitable when the temporary licensing regulation 205 CMR 219 came up for emergency adoption the commission agreed that a temporary license should be able to operate for a maximum of five years if there were delays in investigating for whatever reason but wanted to check in on the operator's ongoing suitability at the three year mark those decisions are implemented in 205 CMR 219 03 and 04 when 219 came back for final adoption some months later one operator commented that it could be unfair to shut them down after five years if the delay in investigating them and approving a license was the commission's fault rather than the operator's fault several commissioners acknowledged that this could present a fairness problem if it ever happens although I think everyone agreed that it was an unlikely scenario Mina and I proposed that we address this issue as part of a more general license renewal regulation and that general more general license renewal regulation is what we're putting before you today is 205 CMR 231 where 219 comes in is the 219 had a firm five year limit that has to be walked back if there's a chance that an operator is going to operate under a temporary license for more than five years so what we're putting before you today is a nearly unchanged 205 CMR 219 that walks back that limit and makes one other tweak that jumped out of us while we were reviewing it and a new 205 CMR 231 that handles renewals of both temporary and full licenses after five years the purpose of taking up these regulations today is to ensure that operators know what to expect there will be literally years to tweak any fine points in these regulations and again the portion of 205 CMR 231 dealing with temporary license renewals after five years is unlikely to ever be used so that's the background that I wanted to provide before we get into the regulations themselves so I think that's a good place to pause and ask if there are any questions questions teachers okay so in 2019 there are two changes the first is as I said the walking back of this hard five-year limit now if an operator seeks to operate for more than five years 205 CMR 219 03 C refers the operator who's pardon me refers the reader of the regulation to 205 CMR 231 for further extensions the only other change to 219 is the addition of subsection 045 on the next page which enables the commission to refer portions of the application to staff retain experts request additional information and so forth this we added this to 231 as we were developing 231 and realized that it would make good sense to apply us to incorporate it into 219 as well if there are no questions I'll ask you to turn back to your packets on page 17 where 205 CMR 231 begins I do have a question attorney commoners on 219 I'm still a little confused so where does it require the licensee to apply for a temporary license renewal annually that is that's in 231 that's in 231 so 219, 03, and 04 set out the process and the deadlines for an operator to request that their first renewal at the three year mark and then if they seek to continue operating after five years under a temporary license 03C refers to the timeline set out and says that says that the license shall expire in accordance with 205 CMR 231 which sets out the renewal process for renewals after five years right so if 219 is the process that licensees must follow before they were before they have had the temporary license for five years but the objective is to establish fairness between the two processes in the two the two groups if you will if the temporary license is good for up to five years according to 219, 03, 01, AMB where is the requirement for the licensee to pay the a million the one million dollars annually that's what's just that's not connecting in the right way for me in this regulation but what am I missing what am I not grasping here so I don't we don't see a way to require them to pay a fee annually without also requiring an annual renewal of the temporary license and because this regulation was enacted while operators were applying for for licensure we didn't think we thought there was a potential notice issue with with updating this regulation after temporary licenses have been issued to require operators to go through an annual renewal process and pay one million dollars annually and I do want to emphasize that once a license is upgraded to a full to a full license and they are required to make up the rest of their licensing fee and we expect that that should that every temporary operator should be upgraded to a full license or denied within five years so they would so once they're upgraded to a full license the temporary license the the licensee is required to to pay or to bring their account if you will up to date with respect to the difference in the fees that they were actually supposed to pay versus what they I'm confusing myself sorry if they're upgraded if if they're upgraded within five years they they pay the either either the four million or the three million that they still owe as part of their full licensing fee that's in either 214 or 221 I would have to check which okay so whether you're getting a portion of your license under the temporary aspect or the the full license aspect you're still paying the same amount at the end of the day five million dollars for the five year period is that correct is that what you're saying if you operate if you operate under a temporary license yes but if except that if you operate under a temporary license for five years you will only have paid two million dollars for those five years you'll your subsequent one million annual your subsequent annual renewal fees of one million dollars will be counted towards the five million dollars that you would pay for the next five years if you're a full operator so where the memo says if you get to the second or last paragraph it says accordingly these amended regulations allow the commission to issue theories of one year renewals each of which comes with a one million dollar renewal fee that applies that after the five year mark only after the five year mark but before the five year mark we're just stuck with temporary licensee not paying the full five million dollar license fee for up to five years this this that is that is correct if we ever get there which is unlikely this was this was the structure that the commission discussed this fall and this issue was this issue was flooded yeah I understand that I'm just trying to reconcile the the memo with the actual draft of the regulations so so I get it and I think you said earlier that there's no there's really no way around that it just it is what it is if there's no way around it without requiring an annual investigation or you know renewal investigation and a report from IEB etc which is which is not realistic okay thank you should we turn to 231 then commissioners to see how it works in concert with 219 but the changes to 219 does that make sense Caitlin so 205CMR 231 begins on page 17 of your packet like the licensing regulation 205CMR 218 231 proceeds in chronological order it starts with a license renewal application it proceeds to the review of that application concludes with a decision about whether to grant or deny that application and if the application is granted the payment of the fee you may have felt while you were reading this regulation that the language gave you a fair amount of deja vu there is a reason for that a lot of key language here is taken from existing licensing regulations primarily 218 and 219 so 205CMR 231 01 and 2 established when an operator may request renewal regardless of whether the operator has a full or temporary license they must request renewal between 9 and 12 months before their current license is due to expire our goal in picking in fixing those numbers was to push the renewal date as late as possible while ensuring that the commission has enough time to process the renewal request also we decided to calculate the deadline by looking backwards from the expiration date so that we could have the number of months remain constant renewal after renewal if we were instead counting a certain number of months after the issuance date the number of months would have to change with every renewal and so this is just a little cleaner 205CMR 231 01 3 is an administrative sufficiency review modeled after the administrative sufficiency review for license applications it similarly comes with an opportunity to cure deficiencies within a fixed period of time on the next page 205CMR 231 01 4 provides that licenses shall not expire while a timely renewal request is pending again we expect that nine months to a year should be sufficient time to process a request but this gives the commission some additional flexibility and operators additional certainty 205CMR 231 01 5 sets out what the bureau's investigation of a renewal request should look like at this point the treatment of full licenses and temporary licenses diverges somewhat so I'm going to walk you through the rest of the regulation for full licenses and then come back to this and do the same for temporary licenses turning to the statute for a moment section 6F provides that full licenses may be renewed for five year periods upon payment of a five million dollar renewal fee provided that the operator shall continue to meet all requirements under this chapter and the rules and regulations of the commission so the goal of the investigation and the commission's evaluation of the operation excuse me should be to determine whether the operator continues to meet all applicable all applicable requirements and all applicable rules and regulations so in the regulation subsection 5A directs the bureau to investigate the topics required for preliminary suitability because that's important to refresh ourselves on the operator's compliance history which is key and any other topic as directed by the commission a more searching suitability review may not make sense especially just a few years after the first one was completed but the commission retains flexibility to adapt the scope of the review to suit the circumstances subsection 6 on the next page provides that the commission shall make its decision in an open public meeting section subsection 7 is parallel to the paragraph that we added to 219 it enables the commission to involve experts other staff and so forth subsection 8A consistent with section 6F provides that if the operator holds a full license and is in full compliance the commission shall renew the license if there have been compliance problems however you go to subsection 8C which gives the commission discretion to grant or deny the renewal subsection 9 and pardon me these should be A and B not roman numerals 1 and 2 subsection 9 finally requires the operator to pay its renewal fee of five million dollars and extends the term of the license for five years and subsection 10 is based on a provision in 205CMR219 it's to ensure that operators who are required to shut down have time to wind down in an orderly manner that is so that's how the reg functions for full licensees and I think this might be a good moment to pause and ask if there are any questions before we turn to temporary licensees so we're going to turn back to page 18 and subsection 5 but this time we're looking at the bottom of the page at subsection 5B if an operator is so as is explained in the memo and as we discussed a bit earlier if an operator is going to operate under a temporary license in the long term we want as a matter of fairness for them to be paying the same fee as full operators to the extent that we can under the statute a temporary license comes with a million dollar price tag and a full license comes with a five million dollar price tag so to even those out you need the temporary license to renew annually that's what we did in effect the commission is issuing a new temporary license every year so that over five years a million dollars per year adds up that said if they're going to be renewing annually there may not be a lot of new information each time the operator comes up for renewal also we only reach the point where temporary licensee is renewing annually is renewing annually you're operating under a temporary license for more than five years if the commission is already seeing serious staffing issues and you risk exacerbating that problem if you attach another searching investigation to each renewal so this regulation sets the default level of investigation at the same level as an investigation for preliminary suitability but gives the commission discretion to make that investigation either more or less searching as appropriate so moving on to subsection pardon me that's by B right the bottom of page 18 correct Madam chair you know that that's an interesting way to frame it on the second one go ahead commissioner hill may I request a five-minute break yes absolutely so it's 1054 come back just after 11 does that work thank you for that thank you and and then I can contemplate my question thanks commissioner hill we'll take a five-minute break everyone thank you okay Dave thank you we're all back okay this is a reconvening of the Massachusetts gaming commission we're holding this meeting virtually I'll take a roll call after a very short break I am here thank you commissioner hill thank you for that break and I am here commissioner skitter I'm here and commissioner Maynard I'm here okay excellent so we were where were we on Paul I know I was struggling a little bit with one thing I think that we solved it madam chair I believe you were formulating a question about subsection 5b right so if we skip B1 it's a given the default is that the commission doesn't affirmatively do so something is a default to the owner under 215.01 to be that what it is that's the investigation required for preliminary suitability for all that thank you attorney commenters can you remind me why the commission is precluded from assessing an annual fee of a million dollars even without the IEB's report on an annual basis during the first five years commissioners during the first five years yes we had concerns that operators that applied for temporary licenses had applied for temporary and full licenses had applied for temporary licenses working towards full licensure based on regulations that set out a certain cap on the extent the amount operators could be assessed as licensing fees and increasing that cap by over a factor of two after the licenses had been issued could potentially present notice problems I don't understand can you can you repeat that do you understand my question I guess why does the annual why is it not an option for the commission to to bill if you will the temporary licensee each year on the anniversary of the issuance of their temporary license one million dollars during the first five years as IEB continues to conduct its durable suitability investigation based on the statute primarily there the one million dollar fee needs to be tied to the issuance of a new temporary license the commission can only charge an operator million dollars for the issuance of temporary license what we're calling the renewal of a temporary license is really functioning as the issue of a new temporary license but you need you need that renewal process you need some kind of renewal process in place in order to assess in order to assess that fee does that renewal process have to include anything more than just a renewal application from the licensee it could potentially be lightweight but we do also have concerns that operators applied for temporary licenses based on regulations that had them paying a one million dollar fee at the time of application and the one million dollar fee for renewal three years in and imposing another one million dollar fee at the one year mark another million dollar fee of two year mark and another million dollar fee of the four year mark might upset their the expectations under which they applied for a licenseeer in the first place yeah but I'm concerned you know I have I have the same concerns during the first five years as I think we all had relative to this the the period after the five years I just think I think we should find a way if there if one exists and you know I haven't heard that the option I guess I'm proposing is not viable but we should develop a way for temporary licensees to be put you know on a on a level playing field and you know to require to impose the same requirements that we have imposed on individuals who have been granted a durable license right I mean if there is if if if there is nothing in the statute and I know Kathy the chair reference to the statute but if there's nothing in the statute that prohibits that I don't know why I don't understand why we're not entertaining that so I remember this conversation very clearly when we were going through this brag and when we were looking at the temporary licensure issue that I remember sort of stating for the public's understanding that we would be issuing a temporary licensure for one million dollars and that based on the construct that we had that was propelled by the statutory structure that that would allow a temporary licensure licensee to be able to participate in our market for five years at one million dollars it it struck me as an odd construct but that that was what was contemplated by the statute I'm hearing commissioner Skinner saying can't we now impose a temporary licensure renewal fee I mean every year to address that that delta right I didn't see that as a as an option I remember thinking about this inequity what I'm hearing today is that it's a possibility they could get to five years and not yet being in a position to and I may be misunderstanding this being a position to qualify for a durable and I assume that that's on our end and so at that point we could I guess it's nine to ten 12 months before the five-year mark we could impose a second one million dollar fee because they would be seeking a renewal of a temporary so then they would be operating for you know five years for sort of two million am I understanding that right that that's the trigger that renewal which is again under the statute renewals of a license every five years but there's nothing that says by statute that we can require so I think I I guess I'm wondering Patricia Skinner can we be more stringent that way is that permissible if the statute doesn't allow for it but that's exactly my question Madam Chair I'm sorry to cut you off go ahead no no I but I might be misunderstand understanding something so I I turn to and thank you Commissioner Skinner can we be more stringent I'm not sure we can be that would be my question so well so I don't remember the this discussion I I know it was had but I don't remember it in quite the detail that you do so that's precisely my question I just want to kind of a refresher as to how we arrived at the decision we got to and to your to your point about the specific scenario I would I would even go further I would say that year three year four if the durable suitability determination hasn't been made we would also assess the million dollars at those at those points as well but that might be on us that was the one thing I think we understood that IEB might take longer right well whether the investigation is still ongoing or not the temporary license is still valid right and so I I'm trying to understand why the one million dollars you know for for the next year and the year following again assuming the investigation is still pending wouldn't apply so and then I think the second thought I I wasn't sure we could do that to begin with I did emphasize it because it did seem like a rather lenient price to be able to play in this market but now I'm also hearing Paul raise the question about equity given that the reg would change sort of midway in our process but help us sort this out on Tom and Caitlin please Madam Madam Chair as much as I love to have all the answers for you on a call I we can I think it may make sense for us to take a second look at whether there's any play in the statute that would allow us to be more stringent I would also want to take that time to I would also want to take that time to give the operators the chance to give input on whether this would affect their expectations you know as as we're discussing it it does occur to me that every operator should expect to be operated to durable suitability and pay a five million dollar fee within five years so stacking so stacking five million dollar payments may not upset their expectations of how much they pay in total that much the timing could conceivably be an issue for any operators but in any event I would be interested in hearing from them on this so I would recommend I would recommend that we take this piece of the of of 219 and 231 I don't want to say where I would put any amendments in back and take another take another look at us Commissioner Bryan so yeah I do remember this conversation I think there were three different meetings where we discussed this conundrum I do think it would be helpful and maybe if somebody pulls the dates you can remind us what they are I think if we all go back and watch the dialogue again to remember how we got here and there was discussion about our authority what are the other limits given the statutory language etc that was in there we felt like this appropriately balanced that that's my memory of how we got here there's a question too that it is going it is going to be different because you have certain licensees who while everyone has paid the million to get the temp you have people who aren't going to be launching for up to close to a year from now and so IV is going to have to prioritize the completion and adjudication of permanent durable suitability so you may have licensees who are going to get into the scenario and you have others that won't so again my memory was we we had a full some conversation about our inherent authority but also the confines and the construct of the temp license and that's how we came up with this process so I do think before you guys go sort of recreating the wheel it would help all of us to go back and just you know even on double speed listen to high voices and listen to ourselves go over this the last two times we did it that's my memory too Commissioner O'Brien so to answer the question about can we be more stringent I might my and the answer I had in my head Commissioner Skinner was that we couldn't be but you know I'm hearing that Paul saying he would revisit but that's a good idea we can always go back to replay right because it's it's it's important now at this juncture Commissioners what do you think Paul you want to you want to take some time think about this how does this how does this disrupt the promulgation process this doesn't just we can we can take a little bit more time on this again you know unless Paul disagrees these this doesn't nothing raised in these regs is going to become an issue for a little while so we have some time to go back and deal with it and there's no final votes or anything that we're waiting for so we can bring this back whenever the commission is ready I would be interested in finishing walking through 231 briefly yes well we I'm not dismissing thank you so much I was going to let you return Paul before we shift to the the other part of Paul's presentation any further thoughts on this issue or clear clarification that you want to offer up commissioners with everybody's memories Commissioner Maynard and Commissioner Hill you're all set I'm good okay thanks all righty Paul all right so madam chair I apologize I do not recall whether you formulated your question on yeah I got it I just was thinking it was framed that I guess I was finding that it was preliminary investigation I hadn't on the cross-reference so thank you so much all right so moving on to subsection eight for temporary licensees subsection eight has the commission focus on two questions and this is pardon me this starts with 80 first whether the operator meets all legal requirements just like a full licensee and second who has the primary responsibility for the delays in investigating the operator and making a preliminary fine suitability if the operator meets all requirements and the commission determines that it is primarily responsible for the delays the commission should grant the renewal if the operator meets all requirements but the operator is primarily responsible for the delays the commission has discretion if the operator does not meet all requirements we return to subsection c where the commission again has discretion and finally section nine second paragraph if the commission ultimately grants the renewal the operator pays one million dollar fee and the terminal license is extended for one year questions in that two-week period at the very end under 10 that reflects our early decision right on how much time we should allow for winding down that's correct okay thanks anything further I don't have anything further but as always I'm happy to answer any questions well commissioners we didn't get about any of these but I think I'll borrow Caitlin so earlier come in and say that it was helpful discussion and it's really important to revisit this temporary licensing fee structure so I I appreciate that discussion and we'll move it toward those magical dates of April 24th and May 4th see how we do with that May 4th date see how we're we're building a pretty good agenda that day all right so legal you're all set we are also well I'm all set I don't know if Todd has anything else I'm all set okay so and as I mentioned earlier we are going to move on item number four on this agenda at a later date again has nothing to do with the on the part of the secondive director or her overall review it is strictly just a technical issue that we need to address so we'll move that on until I think April 24th thank you Karen for your patience there and do we have any commissioner updates okay so before we conclude just so that we can be organized on our next business we are going to go in back to deliberations commissioners I think what have we scheduled for in terms of timing on the calendar I know you're currently scheduled for 12 30 so 12 30 that gives us an hour does that work for you commissioners to take a little bit of a month break get our heads switched into that area and we'll resume deliberations on earlier matters I'm willing to take a short amount too if it gets us out a little earlier for commissioner Maynard but I'll take an hour but I can do it in half an hour too I don't know everybody else has some questions what was the initial time we had on was it 12 30 yeah yep 12 30 to 3 we've blocked off commissioner Maynard return to you what would you like to do um is an hour break better for you or is a half an hour better for you well I have family and from Kentucky that hasn't been here since 2007 or 19 and um you know it's always uh what what do they call it fear of missing out I have fear of missing out uh anytime that I'm not around them but um I it's whatever you guys want to do well I was wondering if you wanted to serve them lunch that's why I wanted if an hour was better than a half an hour so or or fix something so does a half an hour work because I think we're all we're all able to do that if the legal team is ready for that does that more helpful commissioner Maynard I I'm I'm I'm game for whatever everyone wants to do okay okay commissioners what do you want to do half hour is fine excellent all right and I'm hearing no objections from legal so um we'll reconvene at okay thanks everyone need a motion to adjourn I move to adjourn I do okay commissioner bryan hi commissioner hill hi commissioner skinner hi commissioner maynard hi and I vote yes five zero thank you everyone great work today legal we appreciate