Alliance may require legislative signoff
The first of two casinos proposed for the state of Massachusetts could open as early as 2017. The threat of new competition from the $800 million MGM Springfield could make unlikely bedfellows of two giants of tribal gaming in Connecticut. The state’s once-dominant Mohegan and Mashantucket Pequot tribes may join forces to fend off MGM and other competitors across the state line.
According to the New London Day, casinos licensed for Springfield and Boston and a third one up for licensure in southeastern Massachusetts could have “a devastating impact” on Mohegan Sun and Foxwoods Resort Casino, which are already struggling to maintain their market share in the northeastern United States. When it comes to casinos, the northeast is considered by some analysts to have reached saturation.
Revenue projections from Connecticut show the tribal casinos’ payments to the state have taken a serious hit due to the recession and more competition. By the 2017-18 fiscal year, the casinos will contribute just $191 million to state coffers, 44 percent of the $430 million they paid in 2006-07. The state’s Office of Policy and Management and the Office of Fiscal Analysis predicts the casino payments will drop by 25 percent in a single year, from 2016-17 to 2017-18.
“We could do something to stop revenue from leaving the state,” Etess told the Day. “It could be done relatively quickly. We could get something up before MGM even opens.”
Deputy House Speaker Peggy Sayers first recommended the unorthodox alliance. Kevin Brown, the Mohegans’ tribal chairman, told the New Haven Register the tribe is interested.
“We’re facing significant and direct competition for our market share in Connecticut,” Brown said. “I served in the Army, and one of the things you do when faced with an attack is you dig in and protect your position.”
No comment was forthcoming from Foxwoods, which is owned and operated by the Mashantucket Pequots. However, the casino is showing its vulnerability; it eliminated more than 80 dealer positions earlier this month and is expected to announce more layoffs before the end of the year.
Meanwhile, MGM says it expected a counter-move from the tribes and is not concerned, according to the Springfield Republican.
“We fully anticipated that our competitors would react to our entrance into the market,” said Carole Brennan, spokeswoman for MGM Springfield. “MGM Springfield is uniquely poised to dominate New England’s multi-billion dollar gaming market, while creating thousands of new jobs, and recapturing hundreds of millions of dollars currently being spent out of state. We are confident that our innovative design, tested marketing plan and strong brand will make MGM Springfield a premiere destination resort casino in New England.”
The new casino could draw up to a third of its customers from Connecticut.
The Connecticut Mirror reports that expanding gaming in Connecticut could require approval from the governor, attorney general and the state legislature as well as the tribes. Etess was confident a deal could be made with dispatch.
“From the business side, I can certainly visualize a legislative solution that would permit some sort of expanded gaming, maybe even if it was just slots somewhere near the Massachusetts border that would protect the tax revenues of Connecticut,” he said.
