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Foxwoods Milestone:

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Wednesday, 12 May 2010

Foxwoods Milestone: $3 Billion Added To Connecticut's Coffers By ERIC GERSHON The Hartford Courant May 12, 2010 Even in an age of bailouts and billionaires, the sum $3 billion draws notice. This fact is not lost on the owners of Foxwoods Resort Casino, who today will use the allure of big numbers to highlight a milestone: Over 18 years, the casino's slot machines have generated $3 billion for Connecticut's treasury, an average of more than $160 million a year. In its 13 years, Mohegan Sun has supplied $2.3 billion under the same deal — the state collects 25 percent of each casino's slot revenues. Foxwoods' milestone becomes official with its April slot revenue report, due May 15, but its owners aren't waiting to tout an achievement that these days passes for good news. So, Mashantucket Pequot tribal leaders, executives of the financially troubled casino and public figures will gather this afternoon at the Pequot museum for an event billed as a celebration of the $3 billion threshold. It won't be pure celebration: Foxwoods' payments to the state reached a high of $205 million in 2005, and have fallen every year since — ending at $177 million last June, with another decline assured this fiscal year. It's possible, perhaps likely, that Foxwoods and Mohegan Sun never again will reach the peaks they enjoyed a few years ago, if dollar figures are adjusted for inflation. "That can't all be the recession," said Arthur Wright, professor emeritus of economics at the University of Connecticut, who helped produce economic impact studies for the Pequots in the early 1990s. Lately the recession has been a major problem, for casinos in Connecticut and elsewhere in the United States. Most gamblers wager discretionary income only, and high unemployment has left millions of them with less of it to spend. As the economy improves, the prospects for casinos probably will improve. But Foxwoods and Mohegan Sun face a longer-term problem than economic cycles. They face growing competition in every direction — New York, Rhode Island, Pennsylvania and likely Massachusetts, whose residents spent $730 million at Connecticut's casinos last year. New Hampshire and Maine also are considering expanding legal gambling. The Massachusetts House of Representatives recently approved legislation authorizing two resort casinos in that state, plus 3,000 slot machines at existing race tracks. The Senate is working on its own version of a casino bill, and Gov. Deval Patrick supports expanded gambling. Contributions to the Connecticut treasury from Mohegan Sun, owned by the Mohegan Tribe, peaked at $229 million in 2007. Mohegan Sun hopes to blunt damage to its overall enterprise by opening a casino in Massachusetts, as it has in Pennsylvania. But out-of-state gambling locations don't generate revenue for Connecticut, even if they're owned by local tribes. Massachusetts' proximity to Connecticut, and many slot players' preference for convenience, even at dingy slot parlors in the Bay State, would hurt Foxwoods and Mohegan Sun. "If you put a slot machine in a shoe box, if it's closer to them, they're going to go to it," said Clyde Barrow of the Center for Policy Analysis at the University of Massachusetts-Dartmouth. "You don't have to replicate Foxwoods." For Foxwoods and Mohegan Sun to reach new slot revenue highs, he said, population and income levels within New England and the Mid-Atlantic would need to grow considerably. Mitchell Etess, chief executive of Mohegan Sun, said he expects slot revenues to resume growing as the economy does, but concedes that this won't happen quickly. "How high that growth goes," he said, "there's just way too many overarching factors for me to give any prediction." As for the possibility of a new peak sometime in the future, Etess said, "I don't think it is impossible that you could see that." Etess said he believes additional out-of-state competition could help Connecticut's casinos by generating new gambling patrons, people who might eventually find their way to his casino. "All the people that are going to Yonkers, for example, and Twin Rivers, the new convenience options, it's unlikely that all those people just used to go to Foxwoods and Mohegan Sun," he said. "If you never had Chinese restaurants in your neighborhood, you probably never had Chinese food before." Foxwoods did not respond to a request for comment Tuesday. Wright, the retired UConn professor, thinks Foxwoods' and Mohegan Sun's scale, and the diversity of entertainment options there, should keep them attractive to gamblers. To the extent that smaller competitors diminish their slot revenues long-term, he said, the state will be the poorer for it — but not poor. "If we got $240 million a year from them as a steady matter, it would be worse than getting $400 [million], but it wouldn't be the end of the world," Wright said. "That isn't the whole reason the state's in a pickle. Far from it. Anybody who says we'll make it up through the casinos, they're blowing smoke." Even Paul Young, executive director of the state Division of Special Revenue, which collects Connecticut's due from the casinos, doesn't have any expectation that it will reach new highs. "Clearly if Mass. does open up casinos, then I think the answer to that question is no," he said. http://www.courant.com/business/hc-foxwoods-slots.artmay12,0,7858947.story

 

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