Mohegan Sun joins Massachusetts casino fray
Mohegan Sun entered a four-way race for a western Massachusetts casino license Monday, now no more than a strong contender in a field that includes three of the gaming world’s best-known names.
A year ago, the Sun was the clear front-runner, if not the only runner.
The Uncasville casino, owned by the Mohegan Tribe, announced a strategic partnership with Brigade Capital Management, a New York-based investment company that manages more than $12 billion in assets. Brigade will invest in a corporate entity that’s being established to develop the $600 million resort casino Mohegan Sun hopes to build in the town of Palmer.
The amount of Brigade’s investment was not disclosed.
“This is an important day for Mohegan Sun, for western Massachusetts and the entire Commonwealth (of Massachusetts),” Bruce “Two Dogs” Bozsum, chairman of the Mohegan Tribal Council, said in a statement. “Today, we take the next critical step in fulfilling our commitment to bringing new jobs and economic growth to the region.
“It’s our intent to be the first casino to open its doors in Massachusetts.”
Barring any last-minute submissions by today’s deadline, the other contenders for the lone western Massachusetts license to be awarded by the Massachusetts Gaming Commission are MGM Resorts International of Las Vegas and Penn National Gaming of Wyomissing, Pa., both of which have proposed $800 million projects for Springfield, and Orlando, Fla.-based Hard Rock International, which filed an application Friday for a $700 million development on property owned by the Eastern States Exposition in West Springfield.
All four of the western Massachusetts contenders have filed the required $400,000 application fee with the commission.
In the Boston area, Las Vegas casino mogul Steve Wynn, who has proposed a casino for Everett, and Sterling Suffolk Racecourse, which operates Suffolk Downs, have also paid the fee, while Plainridge Racecourse in Plainville has filed an application for a slots-only facility. The Mashpee Wampanoag tribe’s plan to build in southeastern Massachusetts is contingent on its gaining federal approval for a project.
Although Mohegan Sun has maintained a presence in Palmer since 2009, some in the town had questioned its commitment.
“I have had some doubts,” Paul Burns, a Palmer town councilor, said. “It’s kind of hard to understand why they dragged things out like this. It’s certainly not how I would have played it.”
Nevertheless, Burns, a longtime supporter of a Palmer casino, said news of Mohegan Sun’s partnership with Brigade Capital should erase questions about Mohegan Sun’s ability to finance the project. He said Mohegan Sun “has a leg up” on its competitors because of the Palmer casino site’s location off Exit 8 of the Massachusetts Turnpike and Mohegan Sun’s head start in negotiating a “host community agreement” with town officials.
“We’re the only one that doesn’t have significant traffic issues,” Burns said.
Once the host community agreement is completed, he said, Palmer residents are likely to approve it in a referendum, another required step in the state’s approval process. Gaining local approval could prove more problematic in Springfield and West Springfield, he said.
Burns called on Mohegan Sun to increase its $600 million investment to bring it into line with those of the other western Massachusetts applicants.
Mitchell Etess, chief executive officer of the Mohegan Tribal Gaming Authority, acknowledged that Mohegan Sun has proceeded deliberately in pursuing its Palmer plan.
“We’ve been in this process a long time,” he said Monday in an interview. “We’ve been methodical and patient. A big part of this was finding the best partner, so we weren’t going to rush anything. Ultimately, we know how to drive the most revenue to the commonwealth.”
Etess said Mohegan Sun has so far invested $15 million in the Palmer project and that the $600 million price tag is directly related to development of the resort casino, which would include a hotel, spa, retail shops, restaurants and an entertainment venue. He said putting the figure up against the higher numbers associated with the other western Massachusetts proposals wasn’t necessarily comparing “apples to apples.”
The Palmer project “won’t be different in size and scope” from the competing proposals, he said.
An expert on gaming in the region ranked Mohegan Sun among the top three contenders for a western Massachusetts license.
“They were the unquestioned front-runner a year ago,” Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth, said. “Now, at best, they’re one of three in the running, with MGM and Penn National.”
Barrow named as the other top contenders the two gaming giants proposing to build in Springfield. MGM Resorts’ plan calls for a 25-story, 250-room hotel and an entertainment district on 10 downtown acres. Penn National would develop about 13 acres in the city’s North End, including property now owned by The Republican newspaper. The project also would include a 250-room hotel.
The competition, Barrow said, pits Mohegan Sun’s plan for a rural resort in Palmer against proposals for urban casinos.
“Mohegan officials have posed the debate in the right terms,” he said. “If you’re the commission, do you want to go with Mohegan Sun, a regional name brand recognized for quality that has Massachusetts customers who are already loyal to it, or do you want to bring in somebody from outside?
“In all of Massachusetts, their (Mohegan Sun) proposal is the only rural one on the table,” he said.
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