Casino competition atop recession taking a toll

Connecticut's two American Indian-operated casinos have known for more than a decade that competition was coming. They talked about it, strategized for it, and even said they'd welcome it. But all that was before what Federal Reserve Chairman Ben Bernanke calls "the worst financial crisis in modern history."

Just as Foxwoods Resort and Mohegan Sun casinos were hitting their stride in 2007 the Great Recession set in and has lingered. And just as businesses and individuals around the world have been stung, so have Connecticut's casinos. But the economic hard times have also hastened their competition, as states once cool to legalizing gambling are stampeding to open, and cash in on, their own casinos.

Just how big is that gambling revenue pie and how many states can get a slice of it? Rhode Island and Massachusetts are in a sprint to see which state can legalize Las Vegas-style gambling first (although Rhode Island may have violated its own state and local laws in the rush to get there).

In Massachusetts, meanwhile, some lawmakers are concerned about the thoroughness and thoughtfulness of the hurried legislation.

Then there's the Shinnecock Tribe in Long Island, just across the Sound, recognized last week by the federal government, opening the door for its planned casino enterprise.

Atlantic City has been around since 1976 and there are various forms of gambling already in place in Pennsylvania, New York, Delaware and Rhode Island.

The prolonged slump at Connecticut's gaming resorts has hurt not only the two tribes that own them, but the employees who work for them, the suppliers they buy from, and the state, which collects 25 cents for every dollar the casinos win on their slot machines.

In the last full fiscal year, Connecticut collected $377 million from the two casinos, down from its high in FY 2006-07 of $430 million. The state's share is likely to continue dropping as the economic malaise lingers and new gambling jurisdictions open in other states.

Not so many years ago analysts predicted that New England could become a $4 billion to $5 billion gaming market, rivaling Atlantic City, which had combined annual revenues of $5.2 billion in 2006. But by 2009, Atlantic City's take had fallen to $3.9 billion and the New England estimates now appear to have been wildly optimistic.

Here in eastern Connecticut Foxwoods and Mohegan Sun employ about 18,000 workers, off from the high of 20,000 pre-recession. And the coming competition, once envisioned to grow Connecticut's market by making it part of a metropolitan gaming destination, could conceivably hurt it as casinos fight for the attention of gamblers.

New casinos in neighboring states could mean the loss of more jobs if the new jurisdictions siphon business away. Part of the argument for casinos in the Massachusetts' legislature is keeping the estimated $1 billion that Bay State gamblers spend in New York, Rhode Island and Connecticut in Massachusetts, rather than send it down the highway.

Competition has already arrived for Foxwoods and Mohegan Sun and more is undoubtedly coming their way. They've braced for it, adding amenities such as luxury hotels, spas, gourmet restaurants, shopping, and myriad entertainment, to make their casinos resort destinations. But one thing is certain, they're no longer welcoming competitors. No way.