Trackside casinos find success in the Northeast
Last month, voters in Revere, Mass., voted overwhelmingly to support a plan to develop a $1.3 billion casino resort on 42 acres at Suffolk Downs, a thoroughbred racetrack that once served as a wagering mecca for the nearby residents of Boston.
The Mohegan Sun-led project is the second attempt to bring a casino to the racetrack—an earlier effort backed by Caesars Entertainment to build a $1 billion resort on the site fell apart when Caesars failed a mandatory state background check and had to back out of the project, which was then permanently derailed when East Boston voters rejected it in a referendum. Kudos to Mohegan Sun and Suffolk Downs executives for realizing a casino built solely on the Revere portion of the track would likely win approval from Revere citizens, which it did, with 63 percent of the vote.
Of course, this project still has plenty of obstacles to clear before its gains one of the four coveted Massachusetts casino gaming licenses, including having to nose out a proposal by Wynn Resorts to build a ground-up $1 billion gaming resort in the nearby town of Everett. Despite the allure of new construction and Steve Wynn, on paper at least Mohegan Sun Massachusetts at Suffolk Downs has a decent chance to win the license. According to company literature, Mohegan Sun Massachusetts will consist of a 172,000-square-foot casino with 5,000 gaming positions; casino and boutique hotels totaling 500 rooms; a 4,200-space three-level parking garage; and meeting, retail and dining spaces.
Mohegan Sun and Suffolk Downs officials believe that in addition to gaming tax proceeds, the new project will generate 4,000 permanent jobs, 2,500 construction jobs and spend $150 million annually on local and regional goods and services.
Despite the construction commitment and potential job and revenue figures, there are still those that downplay the impact of casino gaming at Suffolk Downs. “The industry is merely plucking off cities devastated by the recession and buying loyalty on the promise of jobs and revenues we know from experience elsewhere will not materialize,” John Ribeiro, chairman of the Repeal the Casino Deal campaign, told the Boston Globe shortly after the referendum results were announced.
Ribeiro might be right, I suppose, but it would require ignoring the success of two racetrack/casino marriages in Suffolk Downs’ regional backyard. In nearby Providence R.I., Twin River Casino, which is housed at the former Lincoln Park racetrack, is home to 4,500 video slot machines and 80 live table games which generate in excess of $300 million per year for the state despite competition from neighboring Connecticut casinos. According to the American Gaming Association’s State of the States economic survey, Providence is the fifth largest racetrack casino market in the U.S., thanks largely to Twin River Casino.
Cast your eyes a little farther down the road and you’ll come to Empire City Casino, which is housed at Yonkers Raceway just outside of New York City. In many ways, Yonkers mirrors Revere in that they are struggling communities adjacent to major metropolitan areas with failing racetracks that turned to casino gaming to provide an economic spark. For Yonkers, this gamble has paid off handsomely—although smaller in scale than the planned Mohegan Sun Massachusetts and lacking table games, Empire City Casino employees 1,400 people, has a payroll of $40 million, and generates $544 million in gaming revenue, making it the third largest racetrack casino market in the U.S. A gaming tax rate of 69 percent means that state takes in $370 million or so each year from Empire City.
In the race for the Boston area casino license, there is no guarantee Mohegan Sun Massachusetts and Suffolk Downs will end up in the winner’s circle. But what should not be in doubt are the economic legs an urban trackside casino could have in a Northeast setting.