Wynn & MGM Rumors Abound in Massachusetts

Matt Maddox (left & Steve Wynn (right) courtesy of CNBC

Wynn Resorts new CEO Matt Maddox reported on CNBC Wednesday that “Boston’s not up for sale. What Boston represents for us is a good growth opportunity……I like that market. I found that land. I pursued that deal. I entered the agreement with the host community five years ago. I liked that market then, I like that market now.”

Rumors have been spreading daily over the two new casinos in Massachusetts.  It all started when Steve Wynn, then CEO of Wynn Resorts, Wynn, was accused of demanding sexual favors from female employees over the last three decades. Since these allegations became public, and his resignation as Wynn Resorts chairman and CEO on Feb. 6, a firestorm of speculation has whirled around Everett, MA.,  spreading to Springfield, MA and even Connecticut’s tribal casinos.

MGM BOSTON HARBOR?

MassLive reported that “gaming officials are exploring the sale of Wynn Boston Harbor, with MGM Resorts International as a top candidate to purchase the project.”  MGM Resorts International has been urged on by John DeCree of Union Gaming stating “purchasing Wynn Boston Harbor could result in a double-digit increase in return on investment for MGM than their casino project in Springfield.”  But state gaming regulations only allow a casino operator to hold more than one gaming license in Massachusetts.  Selling their MGM Springfield project would then be necessary to purchase the Wynn property in Everett.

MORE RUMORS

Meanwhile, back in Springfield, MGM this week has reported a new opening date – earlier than the previously announced late September.  MGM Springfield is now prepared to open (mark your calendars!) August 24th, 2018.  This report is not a rumor, but will the casino in Springfield be owned by MGM by that time?

With a series of “what-ifs” and “thens,” check out this possible 5+ step scenario:

  • 1. MGM purchases Wynn Boston Harbor, becoming MGM Boston Harbor
  • 2. MGM sells Springfield casino.
  • 3A. Mohegan Sun buys Springfield, becoming Mohegan Sun Springfield (the Mohegan tribe lost out to Wynn for the Boston license with their proposal in Revere. or
  • 3B. MMCT Joint venture between the Pequot & Mohegan tribes in CT change it’s prospective 3rd CT casino in South Windsor to Springfield, MA.
  • 3C. The prospective 3rd CT casino in South Windsor continues as a joint venture between the Pequot & Mohegan tribes in CT
  • 4. The prospective 3rd CT casino in South Windsor is not built, leaving Foxwoods out of the mix, until….
  • 5. Connecticut opens bidding for Bridgeport Casino, as Foxwoods & MGM become prime suitors to battle it out for the NYC market.

It seems like fun to make these rumored projections, much like a mock draft on Draft Day.  But it isn’t fun and games for the city of Springfield. MA. Casino opponents in Springfield always warned that “something like this could happen with MGM’s track record.”

MGM Springfield

Remember when this beautiful tower was going to enhance the Springfield skyline?

AND WHAT ABOUT SPRINGFIELD?

According to MassLive, “Mayor Domenic J. Sarno said Friday he has been assured by the top executives of MGM Resorts International and MGM Springfield that it remains committed to building a first-class resort casino in the city, despite unconfirmed reports that the company is in discussions to purchase the under-construction Wynn Resorts casino in Everett.” Residents have made it known that they need MGM for its economic and jobs promises. Some note that MGM has already changed its plans when they changed the 30-story hotel tower and decreased the casino floor.

Other residents have noted that businesses have been reluctant to break ground in Springfield to accompany the opening of MGM Springfield.

MGM has stated, “We do not comment on rumors or speculations around transactions. We remain fully committed to the opening and success of MGM Springfield.”  But it is the Boston market that will pay the most dividends.  Springfield has always been, to some, a questionably lucrative project.

CONCLUSION

Many events would have to happen in order for Wynn Boston Harbor to become MGM Boston Harbor. The summer will prove to be interesting, as state legislatures business is coming to a halt soon in both states, putting a hold on possibilities.  Besides the Wynn Boston Harbor mess and the MMCT situation in CT, sports-betting is also on the table in Massachusetts, Connecticut, and Rhode Island.

For Springfield’s sake, I hope the next throw of the dice isn’t “snake-eyes!”

Binbin

Dr. Clyde Barrow & the Proposed Bridgeport Casino

Attorney General Jepson

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.

Casino Consultant, Clyde Barrow

Casino Consultant, Clyde Barrow

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.

An artist’s rendering of the proposed MGM Bridgeport casino.(Image: MGM Resorts International)

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:

  1. 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.

    I-95 traffic congestion on SW CT.

  2. 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.”
  3. 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.

Bin bin

Connecticut Casino Expansion Intensifies

 

MGM  Bridgeport rendering top. Proposed MMCT joint venture casino between CT’s Mohegan & Pequot tribes for East Windsor, CT. below.

To add a casino or not add a casino? – That is NOT the question. To add two casinos? – Now that’s the question!

To get the prequel for this post, click on the the post “Wynn, MGM, Bridgeport & MMCT – Questions Abound.”  

The battle at the border between MGM Springfield and the MMCT joint casino venture by the Mohegan & Pequot tribes is going on three years now. But events in March took the conflict to a new height. Highlights?  Sure, there are plenty:

  • CT Attorney General George Jepsen advised legislators on Thursday to consider and test the market for opening Connecticut to commercial casinos, believing that commercial casinos would not jeopardize the $160 million in slots revenue that the state expects to collect in 2018 from the exclusivity deal signed with tribal owners Mohegan Tribe and Mashantucket Pequot Tribal Nation, owners of Mohegan Sun and Foxwoods Resort Casino.

    Attorney General Jepson

  • According to MGM, Connecticut left tons of money on the table by accepting the first casino proposal that came their way. MGM has argued for the past year that the casino proposal process should be open to commercial interests. MGM would also pick a different location – Bridgeport, which is further from the MGM Springfield than East Windsor.
  • MGM wants to build a casino and hotel on the Bridgeport waterfront – the only place MGM is interested in. A bill to support this was in jeopardy after committee leadership refused to hold a vote on it, but it was passed with one major change – Foxwoods and Mohegan Sun will still be allowed to develop their own casino in East Windsor, CT, minutes from the Massachusetts border and from MGM Springfield. Due to the change in the billMGM isn’t so so sure it’s interested if the MMCT casino in East Windsor is allowed to be built.

    Connecticut State Capitol

  • Then, Connecticut lawmakers approved a revised bill that could pave the way for the construction of the state’s fourth casino. The piece of legislation nearly died in the General Assembly’s Public Safety and Security Committee, but last-ditch efforts from lawmakers supporting the idea helped it survive with a 21-3 vote in favor. If approved in the Legislature, the bill would allow for the opening of a new bidding process for operators interested in building a casino in Connecticut. In case the proposed commercial casino bill reaches the desk of Governor Dannel Malloy and he signs it into law, the state of Connecticut would then subsequently allow the local Indian tribes, casino developers, and other qualified entities to submit their respective proposals for establishing the fourth legally authorized gaming venue in the state.

You can’t make this stuff up!  At any given time, either side sound like adolescents not getting their way, only this is different – there’s a lot of money at stake!

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