MGM-funded study says southwestern Connecticut better site for third casino
A casino between Greenwich and Bridgeport would result in more net jobs and revenue than one in the Hartford area, according to a new economic analysis commissioned by MGM, the gaming operator building a $950 million resort casino in Springfield, Mass., less than 30 miles from Hartford.
Released Thursday by MGM, the study conducted by Oxford Economics finds that a southwestern Connecticut casino would generate $545 million more in total economic output for the state than one located in north-central Connecticut, the area now being targeted by the Mashantucket Pequot and Mohegan tribes, respective owners of Foxwoods Resort Casino and Mohegan Sun.
The tribes, authorized by the state to form a joint business venture to pursue a commercial casino, are vetting proposed sites in East Hartford, Hartford and Windsor Locks.
A spokesman for the tribal partnership, MMCT Venture, issued a response to the new analysis.
“It should surprise exactly no one that an MGM-funded study finds that the best place to put a new casino is as far away as possible from MGM Springfield,” Andrew Doba said. “Our goal today is the same as it was when we started this process last year — to make sure that Connecticut jobs don't migrate over the border to Massachusetts."
The driving distance from Springfield to Bridgeport is about 80 miles.
The Oxford study, which an MGM executive characterized as “a precursor to a full-blown state analysis,” says a southwestern Connecticut casino would generate three times the number of jobs, four times the tax receipts and three times the overall revenue of a Hartford-area casino, "based on more than $1 billion in new investment."
“The bottom line question is where does Connecticut get the best deal?” Alan Feldman, an MGM executive vice president, said in a statement. “The more comprehensive the study, the clearer the answer becomes. It is not in the Hartford region. Southwest Connecticut offers a market that brings more jobs, more revenue and more opportunity for economic growth.”
A bill introduced this week in the state legislature calls for a study of the establishment of commercial gaming in Connecticut, including an evaluation of different geographic locations for a potential gaming facility.
Raised Bill No. 5577 will be subject to a public hearing Thursday.
“We have said consistently that there should be an open, competitive, fair and transparent process that allows Connecticut to determine what would be most beneficial if there is to be a commercial casino,” Feldman said.
MGM has sued Connecticut officials in federal court over the constitutionality of the state law that enabled the tribes to form a partnership and accept casino site proposals. The state has sought dismissal of the suit.
Further legislation would have to be passed before a commercial casino could actually be built in Connecticut.
The tribes, who commissioned an analysis of the impact of out-of-state casinos on Foxwoods and Mohegan Sun, have maintained that more study of the siting of a third state casino is unnecessary.
Their analysis, conducted by Clyde Barrow, an academic and a partner and general manager of Pyramid Associates LLC, a Massachusetts company that specializes in economic and fiscal analysis, found that by 2019, four resort casinos — two in Massachusetts and two in New York state — could divert $703 million a year in total revenue from Foxwoods and Mohegan Sun and $100 million a year in gaming revenue from the state.
In addition, the existing casinos, whose workforces have shrunk by more than a third over the past decade, could have to cut 5,800 more jobs, Barrow calculated.
The Barrow study considered how effective up to three “satellite” casinos in Connecticut would be in “recapturing” the revenue and jobs that otherwise would be lost.
He concluded that a casino north of Hartford that would compete directly with MGM Springfield would be the most effective.
He said a casino in southwestern Connecticut should be the second priority.
In releasing the Oxford Economics report, MGM said “the limited scope” of the analysis funded by the tribes led it to commission “a more comprehensive study.”
The Oxford report, which used some of Pyramid Associates’ data, says the earlier study failed to quantify the negative impact a north-central Connecticut casino would have on Foxwoods and Mohegan Sun and to specifically analyze the impact of a single casino in southwestern Connecticut.
Instead, the earlier study considered only a single casino in north-central Connecticut, or three casinos in north central, southwest and western Connecticut, the Oxford report says.
The new study estimates that a casino located along Interstate 95 between Greenwich and Bridgeport would generate $712 million in gaming revenue while costing Foxwoods and Mohegan Sun $250 million in lost revenue.
The net impact would be $462 million in additional gaming revenue.
By comparison, a north-central Connecticut casino would generate $301 million in gaming revenue while costing the existing casinos $141 million in lost revenue — a net gain of $160 million, the report says.
A southwestern Connecticut casino would be accessible from the New York metropolitan area, currently served by “convenience” gaming facilities equipped only with slot machines, not table games, in Yonkers, N.Y., and the New York City borough of Queens.
As the report notes, both facilities generate “substantial levels of annual gaming revenue.”
“This performance demonstrates the latent demand in the immediate New York City area and the potential for a well-located, accessible casino resort,” the report says.
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