Connecticut stuck in the middle of the evolving northeastern casino marketplace
Outside of the game of tic-tac-toe, is it ever enviable to be in the middle of anything?
The children of divorced parents would emphatically say no. Based on two World Wars, Belgium would likely give a collective thumbs down to its geographic position between France and Germany. As fans of 1970s television shows can attest, Marcia Brady was less than enthralled about being the middle child in a large, blended family.
Yup, by my way of thinking, a middle position is usually best avoided. Yet this is exactly where the state of Connecticut now finds itself in the evolving northeastern U.S. casino gaming marketplace. To recap, since the early 1990s, the Nutmeg State has been home to two of the nation’s largest tribal casinos—Foxwoods Resort Casino, the Mashantucket Pequot-owned facility in Ledyard; and Mohegan Sun, the Uncasville-based property under the control of the Mohegan Tribe. For decades, these properties operated in a largely casino-free regional marketplace and drew customers from populous nearby states, making the casinos extremely successful and profitable for both the tribes and, thanks to a 25 percent tax on slot machine revenue, the state of Connecticut. Although the recent recession has thrown both operations into debt, tax money and jobs continue to benefit the citizens of the state.
But this continued northeast casino dominance has been thrown into question of late thanks to developments in Connecticut gaming’s primary feeder markets. To the north and east, Massachusetts is in the throes of approving and developing three large commercially-operated casino resorts in addition to a large, 1,250 slot parlor scheduled to open later this year. To the south and west, New York has approved new, commercial casino resorts for the communities of Monticello and Schenectady, which, along with already established racinos in Queens and Yonkers, are diverting gaming traffic that traditionally flowed north to Connecticut’s tribal properties.
All this means Connecticut-based gaming properties will soon find themselves hemmed-in by new, ground-up casino facilities. Historically, a situation such as this usually spells trouble for the operators in the established gaming marketplace. Atlantic City casino owners can attest to the negative impact new gaming developments in all their primary feeder markets had on established visitation patterns and, eventually, profits.
Connecticut and its tribal gaming operators are taking steps to avoid a similar fate, however. Recently, state lawmakers introduced legislation that would allow the Mashantucket Pequot and Mohegan tribes to potentially develop three new casinos within state borders. According to an article in The Wall Street Journal, one of these properties would be built in the northern region of the state with the goal of directly competing against an MGM Resorts International property currently under development in Springfield, Mass. “Massachusetts has declared economic war on us, and we’re going to fight back,” Connecticut State Senator Bob Duff told the Journal.
The other two casinos would be located elsewhere in yet-to-be-determined locations in Connecticut, perhaps nearer to the New York border to keep in-state gaming business from travelling to new facilities in Monticello and Schenectady.
This Connecticut casino plan has a way to go before it becomes reality—it needs to pass the Legislature and be signed by the Governor before going into effect. The municipalities that will host the new gaming properties must also pass local voter referendums. By that time, the new Massachusetts casino resorts will likely be open, and the New York-based properties well into their development cycles.
Still, it’s hard to find fault with Connecticut’s desire to protect its gaming business, and keeping new property ownership within the established tribal gaming community may curtail possible dissention and speed up the approval and development processes. Who knows, maybe Connecticut can rise from the middle and keep its position on the top.