Building a casino, it turns out, is rather a gamble - and Connecticut leaders should take note of the latest revelations from Springfield before pursuing a similar course here.
The tribes that operate Foxwoods and Mohegan Sun, MGM, lawmakers whose communities could see windfalls from expanded gambling and other special interests are engaged with Gov. Ned Lamont in a high-stakes game of let’s make a deal. But what is glaringly absent from the debate is market data from objective sources to inform the overheated conversation.
The underlying assumption to the whole debate seems to be that there is infinite demand for more gaming options. But we’ve already seen assumptions undone by reality.
MGM, which built a $1 billion casino just across the state line to the north, saw $252.8 million in slot and table game revenue between Aug. 23, 2018, its opening day, and July 31, The Courant’s Stephen Singer reported recently. It’s an impressive sum, but it is far less than the $412 million it expected to generate.
“We underestimated” Connecticut gamers’ loyalty to the tribal casinos in southeastern Connecticut, said Mike Mathis, head of MGM Springfield.
Underestimated? They were off by nearly $160 million, or almost 39 percent of projections. That’s not just a financial mistake but a fundamental misunderstanding of the gaming market in southern New England.
Connecticut’s gaming landscape is a complex web, with many players, many lawyers and many interested parties. The Mohegans, who run Mohegan Sun, and Mashantucket Pequots, who operate Foxwoods Resort Casino, won the right to open a casino in East Windsor after gaining federal and state approval. Whether that casino - designed to divert the anticipated flow of Connecticut gamblers up Interstate 91 - even has a purpose any more is an open question.
But there are so many more moving parts. Gov. Lamont pulled back the veils from the discussions when he floated the idea of selling the creaky XL Center in Hartford to the tribes in exchange for allowing some gaming there, among other enticements. That puts the city of Hartford in the mix as well, and back room talks are underway.
Also in the mix, along with the XL Center, is sports betting, which the tribes claim that they should be able to operate exclusively. The city of Bridgeport is also involved, as both the tribes and MGM have expressed interest in opening a casino there. Internet gambling is also on the table.
The lawyers, meanwhile, are hovering in the background. MGM has threatened to sue if the East Windsor casino opens because, it says, the state should have allowed an open process before selecting the tribes to operate it.
“I feel very strongly that if we come up with the right deal, (MGM) would not sue,” Mr. Lamont said. “There is a solution that would avoid litigation, and that’s my priority.”
The priority, though, should not be reduced to avoiding litigation. The priority must be making sure everyone has reliable data and solid projections. It’s an economic decision that should be based on solid market research and data, not a five-way superstar deal made just before the trade deadline to please the fans.
As the disappointing news from Springfield should plainly show, nobody has a handle on any of the possible scenarios. MGM’s own projections in Springfield were significantly off, even if the numbers were outdated and the predictions were rosy.
Any sort of negotiated settlement among the parties must be based on economics, not politics. Real data are required here, supported by thorough analysis conducted by independent parties - not by the tribes, not by MGM, not by the state, not by the cities, not by any developer.
To that end, the state should commission an independent study to determine exactly what the costs and benefits would be if there were a casino or some kind of legalized gaming in the city of Hartford, or any of the other possible scenarios.
There’s a lot to consider. Best to have the facts first.