MGM says tribal consultant’s analysis already is ‘debunked’
Report says Bridgeport casino would not offset loss of tribal payments
MGM Resorts International on Monday dismissed a new report that supports the Mashantucket Pequot and Mohegan tribes’ claim that Connecticut would suffer a major loss of revenue if it authorized a commercial casino in Bridgeport.
The report, authored by Clyde Barrow, a Northeast gaming expert commissioned by the tribes, contends that an MGM-proposed casino in Bridgeport would not generate enough taxable gaming revenue to offset the loss of revenue Connecticut realizes from the tribes’ existing casinos — Foxwoods and Mohegan Sun — which share 25 percent of their slot-machine revenues with the state. The tribes would no longer be required to share that revenue if the state allowed another entity to operate a casino.
The tribes’ contribution came to $270.7 million in fiscal 2017.
“This so-called ‘analysis’ was debunked last year,” Uri Clinton, senior vice president and legal counsel for MGM Resorts, said in a statement. “It wrongly assumes that revenue to Connecticut from the slot machines at the two tribal casinos will remain above $250 million when every analysis indicates it will drop to about $175 million next year …”
MGM Resorts is building a nearly $1 billion resort casino in Springfield, Mass. The tribes have countered by gaining authorization for a $300 million “satellite” facility in East Windsor.
Clinton said Barrow, in his report, also “appears to completely omit the Long Island market in considering New York”; failed to factor in the effect of a resort casino being built outside Boston; and didn’t account for the likely legalization of sports betting. He said the Barrow report contained an error regarding the first-year performance of MGM’s National Harbor resort casino near Washington, D.C.
A copy of the report provided to The Day last week said National Harbor, which opened in December 2016, generated $338.4 million in gaming revenues in its first year, far less than the $714.7 million that had been projected. Barrow, reached Monday, confirmed that the figure was in error. He said it represented only National Harbor’s revenues for the seven months it was open in fiscal 2017. In the casino’s last 12 months of operation, its revenues totaled $627.3 million, “still short of the projection,” he said, adding, “Our basic argument is still valid.”
A corrected version of the report was made available to reporters Monday.
Clinton also took issue with the tax rate Barrow assumed in calculating how much tax revenue a Bridgeport casino could be expected to pay the state. Barrow said he used a 25 percent rate “because that’s what the legislature’s been talking about.” Barrow calculated that a $1.1 billion Bridgeport casino would provide the state with $180.2 million in annual tax revenue by its third year of operation. He noted that MGM Resorts’ latest Bridgeport proposal calls for a much smaller, $675 million project.
The legislature’s House of Representatives is considering a bill that would establish a competitive-bidding process for a commercial casino somewhere in the state. Authorization for such a casino would require additional legislation.
A consultant hired by MGM Resorts testified at a public hearing last month that a Bridgeport casino and legalized sports betting would generate more tax revenue for the state than Foxwoods and Mohegan Sun provide. The legislature is considering legalizing sports betting should a federal ban on such a measure be lifted.