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    Friday, May 10, 2024

    Report: Satellite casinos would go long way in ‘recapturing’ lost revenue, jobs

    Southeastern Connecticut’s casino-owning Indian tribes cited new research Thursday that indicates the development of three satellite casinos in north central, southwestern and western Connecticut would enable the state to recapture 76 percent of the estimated 9,300 jobs it stands to lose to four casinos proposed in Massachusetts and New York.

    The research, prepared by Pyramid Associates, a Massachusetts-based company, was provided to state legislators and discussed in a conference call with reporters.

    Clyde Barrow, Pyramid’s general manager and author of the report, said a north central Connecticut casino alone would generate nearly 2,900 full- and part-time casino jobs by 2019 and indirectly support an additional 1,400 jobs, recapturing 46 percent of the total jobs imperiled by the out-of-state casinos, particularly MGM Resorts International’s $800 million project in Springfield, Mass., which is scheduled to open in 2017.

    Casinos also are planned in Everett, Mass., and in Schenectady and Thompson, N.Y.

    The Mashantucket Pequot and Mohegan tribes hired Barrow, a professor at the University of Texas-Rio Grande Valley and former director of the Center for Policy Analysis at UMass Dartmouth, to analyze the impact of Senate Bill 1090, which would allow the tribes to jointly operate up to three satellite casinos in the state.

    He found that a north central Connecticut casino alone would generate $301 million in gaming revenue in 2019, recapturing 53 percent of the gaming revenue that would otherwise be lost to the proposed out-of-state casinos. It would generate $36 million in non-gaming revenue, recapturing 27 percent of what would otherwise be lost.

    Three satellite casinos would generate $558 million in gaming and non-gaming revenue by 2019, and provide the state with nearly $130 million a year in tax revenue, according to Barrow. A north central Connecticut casino would provide more than $75 million a year in tax revenue. Barrow based the projections on the assumption that the satellite casinos would pay a 25 percent tax on all gaming revenues — those generated by table games as well as slot machines.

    Currently, the Mashantuckets’ Foxwoods Resort Casino and the Mohegans’ Mohegan Sun pay the state 25 percent of their slots winnings, but none of their table-games revenue.

    Kevin Brown, the Mohegan chairman, said Barrows’ research contained “very compelling numbers.”

    In his analysis, Barrow also assumed that each of the three satellite casinos would open on Jan. 1, 2017, with 2,000 slots, 50 table games and 15 poker tables as well as limited restaurant options, a small gift shop and a convenience store.

    The tribes are prepared to invest $300 million in each of the three casinos, according to the analysis.

    “While not of the scope and scale of Mohegan Sun and Foxwoods, these would be considered significant-size casinos, about the size of an average Atlantic City casino,” Barrow said.

    Brown acknowledged that it would be “a monumental task” for the tribes to build three casinos simultaneously and have them up and running by 2017. He said delays that have beset the Massachusetts projects may give the Connecticut tribes more time to pursue theirs, if the legislature approves the bill.

    As for financing $900 million worth of casinos, Rodney Butler, the Mashantucket chairman, said the tribes have received “a substantial amount of interest” from potential financial backers.

    “Until you have legislation in place, you’re not going to get commitments,” said Butler, who added that some potential investors have diverted their attention from Massachusetts casino projects to Connecticut.

    Barrow said satellite casinos would “cannibalize” the tribes’ southeastern Connecticut casinos to some extent, saying they would prefer to lose business to themselves rather than out-of-state competitors. Noting that Foxwoods and Mohegan Sun employees come from throughout Connecticut, he said there would be an opportunity for casino workers to transfer to satellite locations.

    He also suggested that revenues the tribes derived from satellite casinos would be plowed into their southeastern Connecticut destinations, enhancing their competitiveness and stoking tourism in the region.

    b.hallenbeck@theday.com

    Twitter: @bjhallenbeck

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