Third-casino legislation would boost tourism funds

Plan is to set aside $5M to $10M every year

New London — All but lost in the brouhaha over the bill authorizing southeastern Connecticut’s casino-owning tribes to develop a third casino in the state is the role the legislation would play in boosting tourism funding.

The measure, which Gov. Dannel P. Malloy has yet to sign, would ensure that between $5 million and $10 million annually is set aside for statewide tourism promotion, Kevin Brown, chairman of the Mohegan Tribe, told members of the local business community Friday.

Brown and Rodney Butler, the Mashantucket Pequot chairman, spoke at a breakfast meeting of the Chamber of Commerce of Eastern Connecticut at the Holiday Inn.

The third-casino bill calls for the tribes to pay the state 25 percent of the proposed facility’s gaming revenues — from both slot machines and table games. Ten percent of the table-games revenue would be allocated to tourism. The tribes’ existing casinos, Foxwoods and Mohegan Sun, pay the state 25 percent of their slots revenues; their table-games

revenues are not taxed.

The tribes’ third casino, a joint venture proposed for an East Windsor site, is projected to generate $280 million to $300 million annually in gaming revenue, about 70 percent of which would be expected to come from slot-machine play. Table games — blackjack, craps, roulette and the like — would account for the other 30 percent, from $84 million to $90 million annually.

State funding for tourism promotion has shrunk from a peak of $15 million in fiscal 2012, the early days of the Malloy administration, to $6.4 million in the current fiscal year, which ends June 30. The legislature adjourned June 7 without passing a budget for the coming year.

State Sen. Paul Formica, the East Lyme Republican who founded the legislature’s tourism caucus, said Friday that legislators hope to reconvene next week and vote on a budget Thursday, the day before the fiscal year ends. He said several budget proposals now seek to address tourism funding by tapping revenue generated by the state’s hotel room occupancy tax.

It’s projected, Formica said, that 1.5 percent of the hotel tax would generate $12.8 million for tourism in fiscal year 2018 and $13.4 million for tourism in fiscal year 2019. By then, the East Windsor casino could be generating table-games revenue and, consequently, tourism funding.

“When you add them together, it’s significant,” Formica said, referring to the two funding sources.

In his original budget proposal, Malloy had allocated $8.3 million for tourism promotion.

The tribal chairmen said they expect the governor to sign the third-casino bill “very soon,” a view state Sen. Cathy Osten, D-Sprague, also expressed.

“He’s given no indication he doesn’t intend to sign it,” she said.

Butler, responding to a question from the audience at the chamber meeting, said the tribes expect to obtain the necessary approvals to launch construction in East Windsor within the next six months. Thereafter, he said, the casino could open in another 18 months.

MGM Resorts International, the gaming operator developing a $950 million resort casino in Springfield, Mass., has threatened legal action aimed at preventing the East Windsor project from proceeding.

Both Butler and Brown were effusive in their praise of the legislature’s southeastern Connecticut delegation, which unanimously backed the tribes’ third-casino bill. In addition to Formica and Osten, the delegation, some of which attended Friday’s meeting, includes Sens. Heather Somers, R-Groton, and Art Linares, R-Westbrook, and Reps. Mike France, R-Ledyard; Holly Cheeseman, R-East Lyme; Kathleen McCarty, R-Waterford; Kevin Ryan, D-Montville; Chris Soto, D-New London; Christine Conley, D-Groton; Joseph de la Cruz, D-Groton; Doug Dubitsky, D-Chaplin; Emmett Riley, D-Norwich; Diana Urban, D-North Stonington; and Devin Carney, R-Old Saybrook.

The chairmen also commented on their tribes’ ongoing diversification plans, with Brown cautioning that the Mohegans’ development of the former Norwich Hospital property in Preston is going “to be a long process.”

He said it could take 12 to 18 months for the state to complete an environmental cleanup of the site, and that it could be 2024 before “everything is up and running.” The tribe’s development plan for the property calls for a theme park, an indoor water park, a sports complex, hotels, a senior living center, a marina and a retail component.

“It’s not going to happen overnight,” Brown said.