Two Connecticut Tribes Closer to Building Casinos in Massachusetts
September has been a terrific month for the two Connecticut tribes vying for casino-resort licenses in Massachusetts. And it's a good thing.
The Palmer Town Council unanimously approved Mohegan Sun MA's proposal for a $1-billion resort-casino and ratified a Host Community Agreement on September 3. A referendum vote that would take the plan to townspeople is set for November 5. The tribe has pledged $15.2 million in annual payments to the town, as well as an additional $3 million up-front payment. "We would double the town's tax base which amounts to $1,200 per person in town," says Chuck Bunnell, Mohegan Tribe Chief of Staff, "as well as upgrading Palmer's infrastructure – water, roads, utilities."
"We're very optimistic about the referendum. We've had an excellent relationship with Palmer over the past four years, and the town has approved past referendums on gaming," Bunnell says.
The Mashantucket Pequot Tribe upped its commitment of annual payments to the town of Milford from $18 million to $31 million just days before the town selectmen signed a Host Community Agreement with Foxwoods MA on September 9. A referendum vote could come as soon as mid-November. If the casino plan gets voter approval, the next step would be getting the town to approve a zoning change, according to Stephen Oakes, a spokesman for Foxwoods MA. If the referendum vote fails, the plan is essentially dead, says Oakes, but he believes the hard work that has gone into planning will pay off.
Both Connecticut tribes, according to Moody's Investors Service badly need a "Massachusetts miracle" in the form of a casino license. In an August 13 report, Moody's wrote, "Gaming revenue in the two-casino Connecticut gaming market has been on a steady decline for two years. Mohegan, operator of Mohegan Sun, and Mashantucket, operator of Foxwoods Resort Casino, saw combined gaming revenue at their Connecticut casinos decline 10.2 percent in the 12 months ended June 30, compared with a year ago."
Without revenues from a Massachusetts gaming enterprise, both tribes would continue to see deteriorating gaming revenues for which their planned facilities expansions would not be able to compensate, said Moody's.
A successful bid for a casino-resort in Massachusetts would likely improve the tribes' prospects significantly. But without a license, and with the competition that would come from the new casinos in Massachusetts, the tribes could find themselves in a position where they would not be able to service their debts, an eventuality that could lead Moody's to lower their credit rating, said the report.
Bunnell noted that the report is an addendum issued when Moody's upgraded the tribe's bonds in August. "It's a caution that we need to continue to expand our brand, as we have been doing in Pennsylvania, Washington state and New Jersey and to look at new opportunities."
In the meantime, the landless Mashpee Wampanoag Tribe in Massachusetts continues to wait for the federal Office of the Assistant Secretary for Indian Affairs to approve its land-into-trust application for a 170-acre site in Taunton where it has proposed a $500-million casino resort. Local opponents continue to put forward challenges based on the Supreme Court's 2009 Carcieri decision.
The Mashpee Wampanoag casino would be in what the Massachusetts Gaming Commission has designated Region C (Southeastern Massachusetts) and so does not conflict geographically with the other tribal applications. It would also be organized and approved differently, subject to the provision of the Indian Gaming Regulatory Act, which does not apply to the commercial casinos other tribes have proposed in Massachusetts. A Massachusetts legislative committee voted September 10 to send a proposed tribal-state gaming compact to the full state House and Senate.
Hard Rock International, owned by the Seminole Tribe in Florida, has proposed building an $800-million resort casino in Region B, putting it in direct competition with the Mohegan proposal. But West Springfield voters firmly rejected Hard Rock's resort casino project in a September 10 referendum.
The Moody's report did not address the financial conditions of either the Mashpee Wampanoag or the Seminole Tribe.
Three other entities are competing for Massachusetts casino licenses, though more may join the fray before the September 30 deadline for Phase I commercial applications for Region C. Final casino applications for Regions A and B are due December 31. The Massachusetts Gaming Commission is expected to award those two licenses in April.
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