Bridgeport casino talks get more complex
It’s been several years since a casino in Bridgeport was first announced and a lot is still unclear — but an industry analyst said that is to be expected.
Negotiations between the state, the city and potential operators are still ongoing, but recent reports that Gov. Ned Lamont was looking at a tribal casino in the Park City instead of a commercial operator appear to have made a complex situation even more complicated.
“We’ve always been of the mindset that this was something that wasn’t going to be solved relatively quickly because of the complexity of it, and also because gaming expansion in general does not happen without some friction along the process,” said Colin Mansfield, a director of corporate finance at Fitch Ratings.
In recent years, MGM Resorts has been the only suitor looking to commit to a Bridgeport gaming facility, but with the possibility of the tribes looking at the city, Bridgeport Mayor Joe Ganim said he is more interested in getting a casino for the Park City than in who runs it.
“The position has always been that we believe that a … waterfront resort … with a casino provides a huge opportunity for jobs for Bridgeport that I strongly support,” he said.
Up in the air
Whether MGM’s proposed casino would be sustainable in Bridgeport is one of the biggest unanswered questions, according to Mansfield, and the same could be said for a potential tribal facility.
The gaming market in the Northeast is already saturated with casinos throughout New England and the tri-state area, he said, and that could pose problems for operators looking to build in Bridgeport.
“When you talk about adding another large casino into that mix,” Mansfield said, “there is already a majority of the demand that is being met sufficiently . ... Then you get into the issue of cannibalizing from somebody else.”
The contract between the tribes and the state also remains an obstacle, he said.
For the past quarter century, the state has relied on 25 percent of slot machine revenue from the Mashantucket Pequots and Mohegans as a guaranteed revenue to help balance its budget.
The tribes paid $263.6 million to the state last year, according to data from the state Department of Consumer Protection.
That’s down from a peak of $392.7 million in 2006.
“You have to imagine that if you’re taking a piece of your annual budget out … that you would have to replace it somehow,” Mansfield said.
MGM has said from the outset of its proposal that its casino in Bridgeport would be a big money-maker for the state. When MGM first proposed its casino in 2017, it promised a $50 million casino licensing fee and projected $316 million in annual taxes.
However, the company’s new casino in Springfield, Mass., which opened nine months ago, hasn’t been performing the way the company or analysts expected.
MGM had touted expectations of $418 million in annual gross gaming revenue in its first year — or $34.8 million per month —leading up to opening the casino. So far, the highest onemonth take was $26.9 million in September, its first full month of operation, according to reports.
The $1 billion casino in Springfield reported $21.8 million in gross gambling revenue in April, a 15 percent decrease from March, according to area sources.
“We would expect them to make the adjustments where they think they need to make adjustments to get the property generating a little bit more revenue,” Mansfield said, attributing
the shortfall to growing pains.
“Some of the properties in upstate New York that have opened have struggled from initial expectations in terms of how much revenue they would be generating,” Mansfield added.
Staying the course
Officials from MGM Resorts have maintained that the casino giant plans to stay the course in its pursuit of building a casino-resort along Bridgeport’s harbor.
“MGM’s position hasn’t changed and remains as it’s been,” said MGM spokesman Bernard Kavalier. “MGM has been consistent from the outset that the best way for Connecticut to expand economic development and create jobs ... is for there to be a casino in Bridgeport.”
The company has been trying to get legislation changed for years to open a bidding process with plans to build a $675 million facility in Bridgeport. The legislation change has gained support by local and state officials in Fairfield County over the years.
Developers from RCI Group, which has a land-use contract with MGM, are standing by their partners in the pursuit of a casino and resort. The Miami-based company is in the midst of construction on Steelepointe Harbor across the water from the proposed MGM Bridgeport site.
“My big push right now is working on the (Steelepointe) project and working on legislation so we can have an entertainment destination here in Bridgeport,” said Bob Christoph
Jr., of RCI Group. “That’s what we’re working on and we’re pushing for it.”
With less than a month left in the legislative session, the chances of any change appears unlikely, according to reports — which could leave MGM having to wait yet longer to get its plan moving.
Weighing the options
In a recent conference, Rodney Butler, chairman of the Mashantucket Pequots, said his tribe is open to establishing a facility in Bridgeport, even as they move ahead on construction of an East Windsor casino with the Mohegans.
The tribes have mentioned wanting to be part of discussion for a Bridgeport facility in the past but have not expressed any concrete desire to put shovels in the ground. As negotiations continue, the tribes may be weighing the possibilities.
"The Tribes are working with state leaders to find a gaming solution that maximizes jobs and revenue for our state, and Bridgeport is certainly a part of that discussion,” said Andrew Doba, spokesman for MMCT, the joint project of the Mashantucket Pequot and Mohegan tribes, in a written statement.
Doba said that the tribes have maintained their opposition to an open bidding process, adding that any discussion of a tribal Bridgeport facility must come via their exclusivity contract.