Connecticut Tribes Propose Casino Partnership to Battle Competition, Lawmakers Support

Gale Courey Toensing
3/12/15

Once robust rivals for the region’s gaming customers, the Mashantucket Tribal Nation and the Mohegan Tribe will join in an unparalleled business partnership to manage new Connecticut casinos. Lawmakers have proposed bill supporting the initiative in an effort to ward off increasing competition from gaming businesses in the surrounding states.

Mashantucket Pequot Chairman Rodney Butler and Mohegan Chairman Kevin Brown met in a crowded press conference at the state capitol Tuesday with Democratic state lawmakers and union leaders, who are backing a proposed bill to allow up to three new casinos in the state. The new gaming facilities would be strategically placed to draw customers away from expanding gaming facilities in New York, Rhode Island and Massachusetts. The casinos would be run jointly by Mohegan and Mashantucket, the only two federally recognized tribes in the state, that currently own and operate the Mohegan Sun and Foxwoods Resort Casino, respectively. Once the biggest and most successful casinos in the world, Foxwoods and Mohegan Sun have seen declining revenues for the past eight years brought on by Increasing regional competition and the recession. The new facilities would be much smaller than the two behemoth resort casinos with no hotels or concert venues, only slots and tables games.

RELATED: Report: Foxwoods & Mohegan Sun Hard Hit by Regional Gaming Expansion

In an unprecedented joint statement from the two sovereign nations, Butler and Brown said the tribes are working with partners in state government to protect thousands of direct and indirect jobs.

“Connecticut is the target market for the newly-approved resorts in Massachusetts and New York. We thank our partners in state government for understanding the gravity of the threat to the Connecticut’s economic wellbeing,” the leaders said. “Historically, Connecticut’s elected leaders have taken bold steps to protect the state’s industries and jobs, and have also partnered very successfully with the Mohegan and Mashantucket Pequot Tribes to build some of the most successful gaming resorts in the world. In the coming weeks our governments will work together again to craft the best possible plan to protect the livelihood of tens of thousands of employees and vendors for Mohegan Sun and Foxwoods, who live and do business in nearly every town and city in Connecticut.”

Foxwoods and Mohegan Sun’s combined revenues fell from an estimated $3.2 billion in 2006 to $1.9 billion in 2014, according the Northeastern Casino Gaming Update report. During that time two massive slot parlors opened in metro NYC – Empire City Casino at Yonkers Raceway and Resorts World Casino New York on Long Island. Rhode Island’s Twin River Casino became the third largest slot parlor in the United States and then added table games to complement its expanding array of video lottery terminals. In Maine, small commercial (non-Indian) casinos opened, pulling in a lot of the casino spending by their own state residents, who used to travel to Connecticut in larger numbers. Massachusetts and New Hampshire residents, meanwhile, spent their gaming money at the more convenient destinations in Rhode Island and Maine.

The most immediate threat to the Connecticut gaming market is a new $800 million MGM casino that will open in 2017 in Springfield, Massachusetts, less than half an hour from Hartford, Connecticut’s capitol city. So, if the proposal for expanded gaming in the state moves forward, the first casino will be located along Interstate 91, a super-busy main thoroughfare that runs between Springfield and Hartford.

Connecticut has reaped well over $3 billion from each tribe under the tribal-state gaming compact for Foxwoods and the Mohegan Sun, which provides the state 25 percent of the slot revenues from each facility. That compact will likely remain in place, but if legislation for the new casinos passes, the governor would have to negotiate a new compact with the tribes to determine the state's share of revenue from the new casinos.

Connecticut lawmakers have historically opposed expanded gaming in the state and now they may be surprised to learn that an overwhelming majority of Connecticut voters oppose more casinos. A Quinnipiac University poll released Wednesday shows 75 percent of voters oppose more casinos in general and nearly 60 percent oppose specific legislation to allow the two Native-American tribes to open new smaller casinos.

“Voters think gambling in Connecticut is good for the state, but they don't want more casinos,” Quinnipiac University Poll Director Douglas Schwartz said.

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