The New England Gaming Summit was held at Foxwoods Resort Casino on November 14-15. The focus was the potential for new gaming throughout the region and its impact on existing business. The timing of the conference couldn’t have been better, as a bill that provides for three new casinos in Massachusetts, one of which may be licensed to a federally recognized tribe if a compact can be negotiated in eight months time, and one slot parlor, was sent to Gov. Deval Patrick’s desk for signature on Nov. 15.
The Massachusetts legislature is aiming high with its bill. Taxation rates are set at a very competitive 25% for the casinos and 40% for the slot parlor. The bill requires casino licensees to pay a license fee of $85 million and a minimum capital investment of $500 million; and a $25 million licensing fee for the slot parlor, which will require a minimum capital investment of $85 million.
The Summit featured speakers from various perspectives across the industry. A sampling of their comments follows:
Mitchell Grossinger Etess, chief executive officer, Mohegan Tribal Gaming Authority, which has signaled its intention to compete for a license in western Massachusetts: “Mohegan Sun Palmer will be positioned not only to take advantage of the untapped appetite for gaming in Massachusetts, but to capitalize on opportunities from New York, Vermont and New Hampshire. There will be great access to this property. We made the decision to compete in Massachusetts because we’re confident we can be successful and this is the strategy we have for our company.”
Chip Tuttle, chief operating officer, Suffolk Downs, which will compete for a slot parlor license: “We are the last remaining thoroughbred race track in New England. We haven’t been immune to the problems that have affected other tracks throughout the industry. North American pari-mutuel handle peaked around 2003 or 2004 at about $15 billion. It was less than $12 billion last year. And it will be less this year. There are a lot of race tracks between Florida and Massachusetts that have had the advantages of expanded gaming at their facilities; Pennsylvania, Delaware, West Virginia and New York. As a result, we’ve been at a disadvantage in terms of attracting quality horses for the last few years so we are hoping with the legislation in Massachusetts that we can reverse that trend in the next few years.”
Cedric Cromwell, chairman, Mashpee Wampanoag Tribe, which is favored to win the tribal casino license and still has to get federal approval to bring land into trust as it does not have a reservation: “The compact has to be negotiated by July 31, 2012. That doesn’t mean we have to have land into trust by then. We’re very confident that we will be able to bring land into trust under an equal footing exception. We look at the Cowlitz tribe which had their initial reservation taken into trust by the Department of Interior, and the Tunica-Biloxi tribe just recently had land taken into trust as well. Our concern is frivolous lawsuits and the uncertainty that has been created by the Carcieri vs. Salazar case.”
Rodney Butler, chairman, Mashantucket Pequot Tribal Council, on what the competitive response from Foxwoods might include: “One of the things we’ll emphasize is the non-gaming aspects of our property. We have the premiere conference facility in New England here and one of the best in the nation. There’s bowling, comedy shows, and all the other aspects of entertainment that the more regional facilities aren’t going to be able to compete with. We’ll also focus on right-sizing and restructuring our debt.”
Dennis M. Farrell Jr., Managing Director High Yield Gaming, Lodging & Leisure Research, Wells Fargo Securities, on the prospects for more gaming in the region: “The northeast is now the most competitive environment in the country. Massachusetts is elevating the stakes and it’s just a matter of time before other jurisdictions in the region increase their offerings. Table games will eventually come to New York and Rhode Island. It’s just a matter of time before New Hampshire legalizes casino gaming. Once states get addicted to gaming tax revenue, it’s very hard to walk away from it.”
Chad Beynon, Securities Gaming Analyst, Macquarie, on the Connecticut market: “The silver lining is that the upper tier and the non-gaming segments have come back in the industry the last two quarters. I wouldn’t be surprised to see an improvement in the food-and-beverage, retail and convention businesses here at Foxwoods and Mohegan Sun. We’ve seen that in Las Vegas the past two quarters and at Borgata. While I’m cautious about the market because of increased competition, I think these properties offer something that will drive a significant amount of non-gaming business that they will be able to push down to the bottom line.”
Changes in the air at the New England Gaming Summit
November 17, 2011