Boston reaches deal with developer planning nearby casino

BOSTON, July 10 Thu Jul 10, 2014 6:00pm EDT

BOSTON, July 10 (Reuters) - Mohegan Sun agreed on Thursday to pay Boston $18 million a year to compensate the city for any negative side effects if the Connecticut-based gambling resort succeeds in its efforts to build a casino in neighboring Revere.

In return, Boston Mayor Marty Walsh agreed to drop his claim that Boston residents had a right to vote on whether the casino In Revere would be built.

The deal came a week after Massachusetts gaming regulators rejected a request from Walsh that they wait until a November statewide voter referendum before making a decision on awarding a casino license near the city. The referendum would repeal the 2011 law that allows three casinos to open in the state.

In addition to 15 years of $18 million payments, Mohegan Sun, which operates a casino in neighboring Connecticut, agreed to make $30 million in investments in East Boston and $45 million in transportation improvements.

Mohegan Sun is owned by the Mohegan Tribe of Indians of Connecticut, which operates one of the biggest U.S. casino resorts on its reservation near Uncasville, Connecticut.

"This was a difficult decision, but I have a responsibility as the mayor of Boston to protect the best interests of our City, and of those in the neighborhood most impacted by this proposal," Walsh said.

Mohegan Sun has also promised Revere, which is northeast of Boston, $25 million in direct annual compensation.

That is comparable to the $25.2 million in annual payments competing Las Vegas developer Wynn Resorts Ltd has promised to pay Everett, if it wins the sole Boston-area casino license.

Casino opponents blasted the deal.

"It should come as little surprise that the city of Boston is cutting another deal with the casino industry that is based on dollars and cents, not what is in the clear interests of our capital city, its people and its long-term economic future," said John Ribeiro chairman of Repeal the Casino Deal, a statewide anti-casino group.

Only one of the three casino licenses created by the 2011 law has been awarded, to Las Vegas developer MGM Resorts International, with formal licensing on hold pending the referendum. (Editing by Scott Malone; Editing by David Gregorio)