Mohegan Sun interested in adding a gaming facility in Connecticut

The owners of the Mohegan Sun casino are interested in developing one or more new gaming facilities in Connecticut to keep customers being targeted by new casinos under development in Massachusetts.

And while the Mohegan tribe hasn’t fully developed any proposal, or settled on any specific locations, it does believe its most aggressive new competitor lies in Springfield, Mass., where a new $800 million casino is being developed.

Kevin Brown, chairman of the Mohegan tribe, told The Mirror on Tuesday that “the competition is on. The competition has begun.

“This isn’t a new conversation, however, it is certainly a revived conversation,” Brown added. “We need to do something in the face of the development of Massachusetts gaming. To do otherwise would be short-sighted on our part.”

Massachusetts casino developers “certainly have not been shy about saying they are not ones to lose any more revenue from Massachusetts gamers going to Connecticut,” Brown said.

“This is not something we have previously considered,” Andrew Doba, spokesman for Gov. Dannel P. Malloy said Tuesday.

MGM Resorts International, which is developing an $800 million casino in Springfield, has been very clear it is targeting Connecticut’s gaming industry, Brown said.

Connecticut has sanctioned gambling at two Indian casinos in its southeastern corner for two decades. In exchange, the state receives a portion of the profits from those facilities’ video slot machines, their most popular games.

And in return, the state guarantees the Mashantucket Pequots – who operate the Foxwoods Resorts Casino – and the Mohegans, that no other entity may offer casino games in Connecticut.

That means any proposal to open new gaming facilities – even if run by one or both tribes – would have to go through a complex approval process involving the legislature, Gov. Dannel P. Malloy, Attorney General George Jepsen, and the tribes.

A spokesperson for the Mashantucket Pequot tribe could not be reached for comment.

But Brown said he and the Mashantucket Pequots’ tribal chairman, Rodney Butler, “have had some point-to-point conversations” about the concept of opening new gaming facilities.

Brown added discussions haven’t gone beyond the basic concept of potential responses to increasing competition. “We both agree that these (discussions) are a necessary move,” he said.

A roulette wheel in the Casino of the Wind at Mohegan Sun

Courtesy of Mohegan Sun

A roulette wheel in the Casino of the Wind at Mohegan Sun

Rep. Peggy Sayers, D-Windsor Locks, prompted speculation at the Capitol last Friday that the Bradley Teletheater could be a target for a new gaming operation.

Sayers, who co-chaired a legislative task force studying regional gaming competition, issued a written release saying Connecticut “must take bold and immediate action to protect and expand our state’s gaming industry.”

The Bradley facility, located adjacent to Bradley International Airport in Sayers’ hometown, is one of 15 off-track-betting operations licensed in Connecticut and operated by Sportech, a British company.

Brown said there have been “general discussions” that recognize the natural synergy between the OTB parlors and any new casino gaming in Connecticut.

“We have to take all of this into account,” he said, again emphasizing that the tribes currently hold exclusive rights to offer casino games in Connecticut. “We have not had any specific discussions. We have not locked in on any specific locations.”

But Sayers and others have begun to argue that it is time for state officials to discuss specifics.

The Mashantucket Pequot and Mohegan tribes “have developed two world-class gaming resorts that have brought thousands of jobs and millions in economic development to this state for nearly two decades,” she added in her release last week. “We are living in new and different times, with increased competition in every surrounding state, and we need to support and protect the jobs in our state.”

Sayers never wrote in her release that a facility should be developed in her home district. But she did write that state officials “can work with the tribes to identify sites throughout the state for safe, regulated gaming venues that would provide Connecticut jobs, and keep revenues here.”

Rep. Stephen Dargan, D-West Haven, the leader of the state legislative panel that oversees gaming issues said Monday that he wants to hold an informational hearing later this month on ways to preserve the casino industry Connecticut has developed.

Dargan, who is co-chairman of the Public Safety and Security Committee, said no one has discussed any proposals to open new gaming facilities with him, either formally or informally.

But Dargan also said that anyone following the casino industry in the Northeast should have seen this discussion coming

Perhaps the most obvious reason for that, Dargan said, involves Massachusetts voters’ decision last week not to block plans to develop casinos in Springfield, Everett and near the Rhode Island border.

This, coupled with the opening in recent years of casinos in Lincoln and Newport, Rhode Island, means the region could be approaching its gaming saturation point, Dargan said.

“There’s a simple reason we have to look at all of this,” he said. “There’s a lot more competition out there. And we don’t know, but when do the dollars dry up?”

The West Haven lawmaker said he fears that in the next five years, Connecticut’s gaming facilities could lose 30 percent of their patronage, or more, if nothing is done.

Dargan also said he doesn’t consider a public hearing as the first step toward expanding gaming in Connecticut, but rather toward preserving an investment in the state’s economy – and the state budget.

Connecticut’s first casino opened in 1992 when the Mashantucket Pequot tribe, having received federal recognition, opened Foxwoods on its sovereign land, located near the Ledyard-North Stonington border in New London County.

That casino originally opened only with table games.

It added the extremely popular video slot machines one year later when then-Gov. Lowell P. Weicker negotiated a compact that ended the state’s objections to the game.

In return, the tribe has given Connecticut 25 percent of receipts from the video slots, an agreement that the Mohegan tribe agreed to follow when it opened the Mohegan Sun in 1996 in Montville.

Two decades later, the Foxwoods complex includes six casinos, convention facilities and several other resort amenities.

Besides its casino, the Mohegan Sun complex also includes an arena that hosts the Connecticut Sun – a Women’s National Basketball Association franchise – and various other amenities.

Still, both operations have struggled with declining gambling patronage since the last recession.

The state’s share of video slot revenues, which peaked at $430 million in 2007, has declined steadily since.

And according to projections released jointly Monday by Malloy’s budget staff and by the legislature’s nonpartisan Office of Fiscal Analysis, the state’s casino receipts will drop more rapidly in the near future.

Connecticut now is expected to receive $267.5 million in gaming payments this fiscal year, down slightly from the $278.5 million take assumed in the current budget.

More importantly, annual proceeds are expected to fall to $260.7 million next fiscal year, $254.3 million two years out, and to $190.8 million in 2017-18.

“We have to protect that investment in the state,” Dargan said.

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