Vegas casino co's & MA: Fight or Flight?
Not too long ago, the MA legislature and governor legalized casino gaming in our state and a competitive process is still ongoing to award casino and slot parlor licenses. Casino operators with major Vegas ties like Wynn, MGM and Penn National all paid $500,000 nonrefundable deposits and millions more on design, marketing and compliance with the hopes of winning one of those coveted licenses.
A group of angry citizens, angry that MA citizens weren't given the opportunity to vote on allowing gaming, formed a "repeal the deal" group and collected enough petition signatures to force the issue on a referendum ballot in November. Politician including the state attorney general have been fighting the referendum. It went to court.
Earlier this week, the Supreme Judicial Court ruled that the issue shall go up for a referendum vote-whether or not to repeal the casino gaming law in MA. The state gaming commission has announced that it is going to continue its licensing process. Unions have announced they are going to campaign to defeat the referendum.
So, my question to you VT staff and friends is - do you think that the aforementioned Vegas casino companies are going to stick around and fight the referendum vote, or are they going to cut their losses and run? Is a gaming license in this state worth it to them?
MA residents spend more on the lottery than any other state - approximately $1700 for every man, woman and child. Our residents make up a large percentage of Foxwoods and Mohegan Sun's customers (they are competing for MA faming licenses, too).
As much as I like to gamble in casinos, I think the market is oversaturated in the northeast. Any opinions out there?
Report this topic as inappropriate.
jerrydice responded on Sunday, 29th June 2014
8splitter - I'm generally in your camp when it comes to your last observation...the mid-Atlantic and NE seem to be oversaturated. In eastern PA, I see that a TON. AC's getting crushed and gradually caving in under its own weight while new metro markets have been getting casinos closer to home over the last decade (Philly, Baltimore, etc.).
While the NE is a bit further from the pull of AC and eastern PA casinos, the phenomenon could end up similarly if MA licenses produce sizable casinos. That phenomenon being cannibalization of the market. Will the MA joints be OK because of being more proximate to the Boston metro? Possibly, since the market-shed assumptions used by the contenders probably factor this...but drawing from markets further down the coast could reach that friction from the Foxwoods & Mohegan Sun casinos, although they probably stand the most to lose.
My guess is that it would need to be a higher-end operation like Wynn vs. something like Hollywood to capture the most profitable mix of volume and expendable $. Just a gut feeling, not something backed by numbers.
So, to answer your question, it depends!
adztheman responded on Monday, 30th June 2014
As an MA resident who covers this stuff on a pretty regular basis, the questions I have boil down to this:
a) A ''slot parlor'' is already under construction in Plainville, which is not far from Boston...question is, what happens to this building if the MA residents decide they want the expanded gaming law gone? Does Penn National go to court to recover what is has spent? Will Steve do the same? What about MGM Resorts International, which already has the Springfield license?
b) With what money is MGM going to find to build something in Springfield? Does this force them to sell a Vegas Property? Detroit perhaps?
c) I've predicted this from the jump--but in the end, MA will likely support only one casino property...even though the law calls for 3...Southeastern MA will never see a casino, as a Native American Tribe may wait till hell freezes over for Land in Trust...and by the time that happens, their may be no need for one.
Rhode Island's two locations, one in Newport, the other in Lincoln, are going to get hit and hit hard...and the locations--Lincoln, which has table games, and Newport which does not currently, may not survive--if you're wondering which of the states could be approaching its financial end, Rhode Island is the choice here, since the two aforementioned locations are the number three source of tax revenue for Rhode Island.
CTs two locations will find ways to hang in; Foxwoods markets the greater Boston area, while Mohegan Sun hits NYC hard with advertising...