Gaming Summit Discusses Challenges Facing CT Casinos

Gaming industry experts believe the New England market can grow, but Connecticut’s big resort casinos will probably continue to face big challenges. WNPR’s Harriet Jones reports.

Major figures in the gaming industry gathered at Mohegan Sun this week for the first ever New England Gaming Summit, aimed at addressing some big issues facing casinos and other facilities in this region. In his opening keynote address, Rodney Butler, chairman of the Mashantucket Pequot tribal council was blunt about the effects of the recession and the changing competitive marketplace.

“In this new era, it is not as simple as—if you build it they will come”

His own casino, Foxwoods, has experienced the first major layoffs in its history during this recession, and is still struggling with restructuring its massive debts. Mohegan Sun followed suit with hundreds of layoffs just last week. Butler says developers planning and building in other states would be wise not to follow the huge resort style pioneered for the Northeast in Connecticut.

“The margins that we run at today aren’t sustainable in this economy. The overhead, the physical plant that’s required to run these large facilities—you’re not going to see that moving forward, I believe. At Mashantucket we have close to 3 billion in the ground there, and Mohegan has just over 2 billion here. I don’t think you’ll see that moving forward, I think you’ll see much smaller venues that can be supported by the market—and by the financial markets as well.”

That assessment of structural change was backed by a panel of industry analysts, who told the audience that they believe the New England market is not yet saturated, but new facilities had better plan carefully to serve a more local marketplace and downsize their ambitions. Rob Heller, an expert in gaming finance gave an insight into the math involved.

“You look at your 25 mile radius, you take about $200 per adult for that 25 mile radius, and that’s about what you’re going to generate in terms of gaming revenues, and then you can figure out from there what kind of profitability you’re going to do, and then you can figure out how much you can afford to pay for the license.”

Massachusetts failed to pass legislation this year that would have expanded gaming in that state, but there’s universal agreement that if the state revisits the issue successfully, Connecticut’s big resort casinos will be first to suffer.

For WNPR, I'm Harriet Jones.