Attorney General George Jepsen has advised Connecticut legislators to test the market for opening Connecticut to commercial casinos. He seems to think it wouldn’t jeopardize $260 million in slots revenue the state expects to collect this year under the exclusive deal with the tribal owners of Foxwoods Resort Casino and the Mohegan Sun.
But this is a questionable tactic in my mind, and so does Clyde Barrow.
Who is Clyde Barrow?
Dr. Clyde Barrow is considered a gaming industry specialist. In a comprehensive study, he stated that a new Connecticut casino (referring to the joint venture between the Mohegans & Pequots) would recapture 46 percent of the 9,300 jobs and $337 million in revenue that would otherwise be lost to out-of-state competition, especially that from Massachusetts.
Dr. Barrow goes on to say recently, “Precedent has already been set. According to Barrow, “in October of 2010, the St. Regis Mohawk Tribal Council “stopped sharing revenue from the casino along New York’s northern border with the state, claiming the exclusivity provisions of its gambling compact has been violated…..In other words: if the State of Connecticut grants a commercial gaming license to any operator other than the State’s two Indian tribes under an open competitive bid process, then the tribe’s current combined revenue sharing payments of $267 million annually could cease immediately (Connecticut Division of Special Revenue 2017).”
Connecticut’s Tribal Tax Revenue
Foxwoods Resort Casino has operated a Class III casino under a compact with the State of Connecticut since February 15, 1992 and Mohegan Sun Casino has operated a Class III casino under a compact with the State of Connecticut since October 12, 1996. Connecticut’s two tribes have a combined Gross Gaming Revenue that is the 4th largest in the United States. The top three are California (where 62 of the 109 California tribes own 69 casinos), Florida (2 tribes operate and own 8 casinos) and Washington state (32 tribal casinos owned by 23 tribes). Remember, only two tribes with only two casinos in the third smallest US state.
But all that revenue from slots at both tribal casinos would be lost with a competitive process for the 4th casino in Bridgeport.
As reported by Brian Hallenbeck, the Day staff writer, Dr. Barrow said “Assuming the third Connecticut casino gets built — and few consider that a slam dunk — a fourth, competitively bid casino would have to generate nearly $1.1 billion in annual gross gaming revenues to offset what the state would lose when the Mashantucket Pequot and Mohegan tribes stop sharing their casinos’ slot-machine revenues, a new report concludes. And the probability of a Bridgeport casino pulling in that kind of cash “is almost zero [because] not a single commercial casino in the United States currently generates that level of gross gaming revenue,,”
Let’s look at a few other considerations:
- The traffic from New York of prospective gamblers will cause studies and improvements in the dangerous, time consuming highway that is I-95. Improved infrastructure should be paid for by any perspective Bridgeport Casino project, or that will cut into Connecticut’s tax revenue, diminishing the already smaller revenue expected without the tribal tax revenue.
- Potential developments in New York, where a constitutional moratorium on New York City casinos expires in December 2022, also threaten the success of a Bridgeport casino, Barrow contends. “There is nothing to prevent the State of New York from locating a new casino even closer to the Connecticut border, where it could intercept casino traffic from New York City and capture traffic from Fairfield County. The anticipated traffic from New York City will never materialize for a Bridgeport casino because New York can easily and quickly pre-empt a new competitive threat from Connecticut by building an even more lavish casino that is more convenient to New York City customers.”
- If newly built New York Casinos and NYC close Empire and Resorts World Casinos are already cutting into the tribal revenue, what kind of a terrible impact would a border war with New York AND Massachusetts bring without the CT tribal revenue when the exclusive pact with the tribes is broken.
I believe Dr. Barrow’s analysis. But maybe MGM International also believes he’s right. I guess that’s how stalling tactics, and MGM is real good at not showing its hand. Meanwhile, MGM Springfield continues – full speed ahead, while Connecticut is still waiting for in first gear.