"Our industry is reaching an equilibrium here in the region."
Kevin Brown
Connecticut lawmakers are considering an expansion of the state’s gambling enterprise, urged forward by competition from Massachusetts. Operators of Connecticut's two existing casinos believe that if this legislation passes, their business will remain competitive.
On Thursday, the legislation -- Senate Bill 1090 An Act Concerning Gaming -- was approved 15 to eight by the General Assembly's Public Safety and Security Committee. It awaits further action in the Senate to clarify details still under negotiation.
A new MGM casino coming to Springfield in 2017 is expected to draw significant numbers of customers from Connecticut. At a press event last week, State Sen. Majority Leader Bob Duff claimed: “Massachusetts has declared economic war on us, and we’re going to fight back.”
On WNPR’s Where We Live, Mashantucket Pequot Tribal Council chairman Rodney Butler said of the Springfield casino: “They’re breaking ground this week on that facility, and that’s going to impact, by their own numbers, 45 percent of the current gaming market in Connecticut. We have to do something to combat that, as well as take advantage of the opportunities throughout the state.”
Proposed legislation includes up to three new, smaller facilities for gambling, possibly near the state’s border with New York or Massachusetts. The casinos would be run jointly by the Mashantucket Pequot Tribal Council and the Mohegan Tribe, which operate the state’s existing casinos.
What the Market Might Bear
The tribes hired Clyde Barrow to analyze the market numbers – the same analyst who did extensive research for Massachusetts in advance of the legalization of gambling in the state. “He presented to the public safety committee earlier this week,” said Butler, “and we’ll have a full report out next week that goes into detail about how we determine those numbers, or how he determines those numbers independently.”
Kevin Brown, chairman of the Mohegan Tribe, said gaming is on the increase in the region. In the last ten years, he said, the number of “class three” gaming locations has doubled in the northeast, affecting Connecticut’s casinos. Brown said they've seen a reduction in number of employees over the same decade.
“More competition will ultimately result in the reduction of employees at our facilities as we resize and recalibrate our business model,” Brown said.
“The Connecticut numbers have been declining substantially because of the surrounding competition,” said Butler. “But when you look at gaming from a regional perspective, the overall gaming market has grown over the past few years, if you incorporate from Maryland up to Maine – which is really the same market that we’re all competing for.”
In the map above, the red markers are existing casinos in Connecticut and Rhode Island. The light red markers show where future casinos are under construction in Massachusetts, and the yellow/orange markers are existing off-track betting locations in Connecticut.
Brown said the casino operators are all competing for the same market share.
What Would a New Casino Look Like?
“It won’t have a hotel, an arena, and multiple entertainment venues,” Brown said. “It is not a slot parlor, as some like to call it. … It’ll be a medium-sized, first-class location that might have in the range of, say, 1,800 slots and 75 tables in it, and probably a couple of restaurants, food and beverage type amenities, as well.”
“It’s going to be a high-class facility for that regional market. We don’t need a big entertainment facility. There’s not going to be Bon Jovi or Aerosmith going there. But, look, if there’s something in the area, i.e. hotels in the area, or a venue in the area that can host large shows, then that would be a benefit to the location, obviously.”
The benefit to the surrounding towns, Butler said, would be jobs, property taxes, and a revenue stream guaranteed by the proposed legislation – amounts to be determined.
Butler and Brown clarified that the state would not fund the construction of the casinos at all, and there are no special tax breaks involved.
“What we are suggesting is that our business, our industry, is reaching an equilibrium here in the region,” Brown said. “What should government do to ensure a competitive market when it comes to any industry that’s in equilibrium? Well, taxes, or regulation, or deregulation to help assist, and ensure that it remains competitive. Well, if we’re going to do that for UTC, in terms of tax breaks -- we can’t ask for something like that. All we’re looking at is to maintain our competitive edge. The way to do that is to – I suppose you could say deregulate, by not having us only allowed to game on our reservations.”
Meanwhile, the developers of a proposed resort casino in southeastern Massachusetts -- run by the operators of Foxwoods -- said Thursday that they reached a host community agreement with New Bedford. New York-based KG Urban Enterprises said the agreement calls for a $4.5 million upfront payment to the city, followed by $12.5 million annually once the casino is open.
Tucker Ives contributed to this report, which also includes information from The Associated Press.
