A sobering reminder of the serious and increasing competition the region's two tribal casinos will face in a few years came in the form of MGM's dramatic proposal Wednesday to develop an $800 million entertainment complex in the heart of Springfield, Mass., right off Interstate 91. Delivered with all the flare of a Las Vegas show, the proposed project holds out the promise of revitalizing Springfield, and in particular a section still scarred by the June 2011 tornado.
It is one of several proposals now competing for the state license to build a casino in western Massachusetts. The competition includes the Mohegan Tribal Gaming Authority, operators of the Mohegan Sun, which has proposed a site in Palmer, Mass. The Massachusetts legislature has also approved licensing two other casinos in the state and a single slots parlor.
Patrons from Massachusetts have played a key role in the success of both the Mohegan Sun and Foxwoods resort casinos. When Bay State residents have multiple alternatives closer to home a significant reduction in revenues flowing to Connecticut casinos appears inevitable.
A successful MGM casino in Springfield would appear particularly problematic. MGM estimates its facility would capture up to 40 percent of the Massachusetts gambling market that now heads to Connecticut. It would also drain away customers who now come from the Greater Hartford area, with Springfield just a quick drive north on I-91. It would have the added injurious effect of trumping the Mohegan's plans in Palmer and almost certainly ending MGM's affiliation Foxwoods, though that relationship hasn't proved very successful in any event.
Operators of the tribal casinos have done what they can to mitigate the impact of the growing competition they face, diversifying product offerings and negotiating deals to restructure debt, providing greater elasticity in undertaking marketing and development plans. But they can only do so much. The regional monopoly they once enjoyed is gone and the competition will soon become intense. MGM officials are pushing for a 2016 opening.
In a meeting with The Day editorial board earlier this year, Gov. Dannel P. Malloy said his administration is well aware of the threat the arrival of casinos in Massachusetts will pose to the two large employers - Mohegan Sun and Foxwoods. The administration stands ready to do what it can to help the tribes meet that threat, he said. Exactly what that might be is unclear, but it is good to know the governor recognizes the gravity of the matter.