Sure bets: Four new casinos under construction in neighboring states

Two years from now, southeastern Connecticut’s gaming behemoths could be facing competition from four new out-of-state casinos, as well as from a fifth whose fire figures to be friendly.

What toll will they exact? Which poses the biggest threat?

Such questions have few hard and fast answers, Mitchell Etess, chief executive officer of Mohegan Gaming & Entertainment, Mohegan Sun’s parent, said last week.

Which is not to say the locals — Mohegan Sun and Foxwoods Resort Casino — haven’t been pondering them to death.

“We know that all these places are going to have an impact,” Etess said in an interview. “We can do a million studies — and guess what the impact will be. But we won’t know what the numbers are until the numbers are in. ... We’ve been dealing with this for years and years.”

If current planning and construction schedules hold, Resorts World Catskills, a resort casino that’s part of a $1.2 billion development in Thompson, N.Y., would be the first competitor to come online. Resorts World, formerly known as Montreign Resort Casino, is expected to open in March 2018.

Tiverton (R.I.) Casino, a $75 million project whose groundbreaking could occur within weeks, is targeting a July 2018 opening.

MGM Springfield, the $950 million resort casino being built in western Massachusetts, a few miles from Connecticut’s northern border, is scheduled to open in September 2018, with the Mashantucket Pequot and Mohegan tribes hoping to open, within months of that date, the third Connecticut casino they’ve been authorized to build in East Windsor, a $300 million undertaking.

Wynn Boston Harbor, the $2.4 billion resort casino under construction in Everett, Mass., is supposed to open in June 2019.

When the dust settles, where will Mohegan Sun fit in?

“It all relates to geography and, secondarily, to what everybody’s offering,” Etess said.

The casinos in Tiverton, near the Fall River, Mass., border, and Everett, just outside Boston, likely will affect Foxwoods more than Mohegan Sun, he said, simply because Foxwoods is closer to them. Similarly, the existing Twin River Casino in Lincoln, R.I., has a greater impact on Foxwoods than Mohegan Sun because of proximity.

On the other side of Connecticut, Resorts World Catskills is expected to affect Mohegan Sun more than Foxwoods, though its impact may be muted by existing New York facilities that are nearer. Resorts World Casino New York City at the Aqueduct racetrack in Queens and Empire City Casino at Yonkers Raceway in Yonkers have been taking a hefty bite out of the Connecticut casinos’ slot-machine revenues for years.

Then there’s MGM.

“Clearly, Springfield is more of a geographic problem,” Etess said. “But they’re not building anything that comes close to what we have" at Mohegan Sun or Foxwoods.

As for East Windsor, “there’s no double jeopardy,” he said. “We’d be losing customers to a place we own half of. We can’t lose them twice.”

In competing against MGM Springfield, the East Windsor casino should benefit from tie-ins with Mohegan Sun and Foxwoods. Loyalty points that patrons earn at the southeastern Connecticut casinos will be redeemable at their East Windsor “satellite,” and vice versa.

“What East Windsor has going for it is that it’s not in downtown Springfield,” Etess added.

MGM Springfield, nevertheless, poses the biggest threat to the southeastern Connecticut casinos, according to Clyde Barrow, a researcher who has studied Northeast gaming for decades. Barrow, chairman of the political science department at the University of Texas Rio Grande Valley in Edinburg, Texas, said MGM’s own business model projected that the Springfield casino would generate $500 million to $600 million a year in gaming revenue, about $220 million of which would come from Connecticut residents.

But that was before the tribes succeeded in winning approval for the East Windsor casino. MGM has vowed to continue fighting in the courts to stop the project, a sign of how much is at stake, Barrow said.

While most of MGM’s Connecticut patrons will come from the Hartford area, some are expected to come from as far away as New Haven due to traffic patterns.

“Some people in that area can actually get to Springfield faster than they can get to Foxwoods or Mohegan Sun,” Barrow said.

Ominously, he said the new casinos in Massachusetts, Rhode Island and New York could cause a 40 percent decline in the combined revenues generated by Foxwoods and Mohegan Sun. That’s comparable to the decline the southeastern Connecticut casinos experienced in the wake of the Great Recession.

MGM Springfield would account for 70 to 75 percent of the projected decline, Barrow said.

About half the decline in the casinos’ business since 2007 is the result of people gambling less, he said, while the other half is attributable to new competition from the casinos in Lincoln, R.I., Yonkers, N.Y., and New York City.

In any case, the local casinos have their work cut out for them. 

“There’s a lot of things you need to do,” Etess said. “You’ve got to decide where to focus your marketing and how much of it to do. There’s a continual tweaking of the product. There are more reasons than ever to make your casino a complete destination.”

“Opening dates have a way of slipping,” he said. “You get more specific when you know the actual dates.”

b.hallenbeck@theday.com

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