More evidence of Bridgeport casino folly
As bright and shining an object as the proposed Bridgeport casino may seem, in reality it is but a mirage. The sooner the legislature recognizes that, the sooner it can focus on the tangible plans for the casino in East Windsor.
C an we finally dispose of this idea of building a fourth casino in our relatively small state? The excitement about the jobs a Bridgeport-based casino would generate is understandable. The reality, however, is that it never made sense for Connecticut and a new report firmly confirms that fact.
This latest push for a Bridgeport-area casino has been a diversionary tactic. The artist renderings are the most tangible thing that will come from it. MGM Resorts International, which has pushed the idea, wants to get Connecticut bogged down in a debate over gaming while it gets its $1 billion resort casino opened and established in Springfield, Mass.
That’s why it has dangled the idea of a casino in southwestern Connecticut in front of political, labor and business leaders in that part of the state. Some lawmakers took the bait in introducing a bill that, if it became law, would establish a competitive-bidding process for such a casino.
The new report by Clyde Barrow, an expert on the gaming industry, particularly in the Northeast, should come with flashing red lights and a warning siren to alert those who might want to take Connecticut down the Bridgeport casino path.
Barrow said in a best-case scenario the Bridgeport-area casino would have to generate about $1.1 billion in annual gross gaming revenues to offset the fiscal losses Connecticut would suffer when the Mashantucket Pequot and Mohegan tribes stop sending 25 percent of the slot revenues from their tribal casinos to the state.
As Barrow notes, $1.1 billion is more than the most rosy gaming revenue forecasts provided by MGM consultants and more than any commercial casino in the United States generates.
The federally recognized tribes operate the Foxwoods Resort and Mohegan Sun casinos on their reservations. Connecticut cannot tax the gaming revenues. In return for the authority to provide popular slot machines, which were not allowed under the provisions in place when Foxwoods first opened, the tribes signed a compact agreeing to send 25 percent of slot revenues to Connecticut, contributing about $7.5 billion to state coffers so far.
As soon as Connecticut approves a license for construction of a competing commercial casino, those slot revenues stop and they don’t come back. This means that a competing commercial casino would have to generate enough revenue to make up for that revenue loss. Barrow makes a compelling cast that it can’t.
Granted, the tribe paid for the Barrow report so it is fair to greet its conclusions with skepticism. Yet the fundamental assumptions behind its conclusions are sound. The two tribal casino operations are well established and the revenues they produce guaranteed. Allowing construction of a Bridgeport casino would cause further damage to their business models. That would hurt not only gaming but the diversified entertainment options Mohegan Sun and Foxwoods continue to develop.
And the legislature would be inflicting this economic damage on the two tribal enterprises, and on southeastern Connecticut, in return for approving a very risky venture. If a Bridgeport casino did open, would anyone be surprised if New York and/or New Jersey responded with more gaming on the other side of the border?
On Monday MGM was happy to point out that slot revenues from Mohegan Sun and Foxwoods, $271 million last year, are likely to drop given increased competition in surrounding states. Yet that does not justify driving those revenues down to zero in order to allow another casino that will face the same competitive pressures.
The better path for the legislature is to take any additional steps that are necessary to support completion of the casino the tribes jointly plan to construct in East Windsor. That casino will help keep gaming and entertainment dollars generated by patrons in the greater Hartford area, and the resulting state revenues, here in Connecticut, rather than seeing it lost to the soon-to-open MGM Springfield casino.
The continuing lack of Department of the Interior approval for the East Windsor casino plan, a delay based on politics, needs to be addressed, either through a legal challenge or by changing the original legislation to delete the need for Interior approval.
As bright and shining an object as the proposed Bridgeport casino may seem, in reality it is but a mirage. The sooner the legislature recognizes that, the sooner it can focus on the tangible plans for the casino in East Windsor.