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    Saturday, May 04, 2024

    For casinos, new competition expected from all directions in 2018

    MGM Springfield, the billion-dollar baby due in September, is one of four new casinos scheduled to open next year in the Northeast.

    And then there’s the Foxwoods-Mohegan Sun “satellite” that’s been authorized for East Windsor.

    That project, tripped up by the federal government’s failure to approve the Mashantucket Pequot and Mohegan tribes’ amended gaming agreements with the state, may not come online until 2019. But make no mistake, the Mohegan Tribe’s top gaming executive vowed Friday, the project will move forward next year.

    “You’re going to see remediation and demolition on the site just after the first of the year,” Mario Kontomerkos, Mohegan Gaming & Entertainment’s president and chief executive officer, said in a phone interview.

    Perhaps no one should be surprised, then, if a wrecking ball comes crashing through the Showcase Cinemas building that now stands on the East Windsor property where the tribes expect to build a $300 million gaming facility.

    Kontomerkos said the lawsuit the tribes and the state filed last month against the U.S. Department of the Interior needn’t prevent the tribes from commencing construction.

    “Clearly, we’re on the right side of history,” he said of the legal action, which seeks to compel the Interior Department to act on gaming amendments Gov. Dannel P. Malloy signed with each of the tribes last summer. The state law that authorized the East Windsor casino requires that the amendments be approved by the federal government. Federal regulations require that notice of such approvals be published in the Federal Register, the daily journal of the U.S. government.

    As of Friday, the Interior Department had yet to file a response to the suit.

    Meanwhile, MGM Resorts International, which is developing the Springfield, Mass., project, has revived discussion of its bid to build a $675 million resort casino on Bridgeport’s waterfront. Jim Murren, MGM Resorts’ chairman and CEO, has said MGM will lobby the Connecticut legislature next year to authorize such a project. The tribes have indicated they’d be interested in bidding on Bridgeport, too.

    Kontomerkos isn't losing sleep over the prospect of an MGM casino in Connecticut. Such a development would free the tribes of their obligation to share their casinos’ slot-machine revenues with the state.

    “The tribes have had an exclusive relationship with the state of Connecticut and almost all, if not all, parties involved believe it’s been an extremely beneficial relationship for the state in terms of jobs and tax dollars,” he said. “Any talk of a facility in Bridgeport or elsewhere in the state will have a very long, uphill climb.”

    The tribes also can expect to face additional competition from New York, New Jersey and Rhode Island in 2018.

    Empire Resorts, developers of the first of the new competition — Resorts World Catskills, a $920 million resort casino in Thompson, N.Y. — recently announced it was moving up the facility’s March 1 opening to mid-February, in time to coincide with the Lunar New Year, an important holiday among Asian populations, which the casino intends to target. Then, in the summer, Hard Rock Atlantic City, a more than $500 million “reimagining” of the former Trump Taj Mahal, is scheduled to open in New Jersey.

    Finally, Twin River Tiverton, a smallish, $140 million casino, is scheduled to welcome customers Oct. 1. Its owners, the Twin River Management Group, which also owns Twin River Casino in Lincoln, R.I., originally had planned a July 2018 opening.

    Kontomerkos said the facilities in Atlantic City and upstate New York will have little impact on Connecticut’s casinos, largely because other, existing facilities lie between, namely Empire City Casino in Yonkers, N.Y., and Resorts World Casino New York City at the Aqueduct racetrack in Queens. The Tiverton, R.I., casino will affect Foxwoods more than Mohegan Sun, he said, simply because of proximity.

    “The Northeast is a very deep market,” he said. “You’ve got the two highest-grossing casinos in the western hemisphere in Connecticut and two other facilities — Yonkers and Resorts World (Aqueduct) that are also in the top 10. So, Atlantic City and the Catskills are really a different market (than Connecticut).”

    Clyde Barrow, a gaming consultant who has long analyzed Northeast gaming, offered a similar assessment, saying that while the cumulative effect of surrounding casinos eventually could harm the Connecticut facilities, only MGM Springfield poses an immediate threat. He noted that the biggest Northeast project of all — Wynn Boston Harbor, a $2.4 billion resort casino under construction in Everett, Mass. — could transform much of the Northeast market when it comes open in 2019.

    “If you put it all out there — Everett, Springfield, Tiverton, two or three casinos in New York state — it’s pretty significant,” Barrow said, referring to what casino expansion could mean for Foxwoods and Mohegan Sun over the next three to five years.

    He compared it to the decade from 2007 to 2016, a period in which nearly 40 percent of the Connecticut casinos’ revenues eroded. During that period, the then-new racetrack casinos in Lincoln, R.I., and in Yonkers, N.Y., and New York City — “the three largest racinos on earth,” Barrow called them — siphoned off slots revenues.

    “The tribes really do need East Windsor,” Barrow said. “If they don’t have that in place, you will see the impact immediately.”

    b.hallenbeck@theday.com

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