Mohegan Sun Signed a Casino Deal with Boston Mayor Martin Walsh on July 11
The Mohegan tribe has a deal in place with Boston Mayor Martin Walsh, which might be the stroke of luck the tribe has been hoping happened since 2008. The tribe is still hedging its bets, though.
Mohegan Sun is seeking to expand into the New York and Massachusetts gaming markets. Both states are seeking to build casinos to help fund the state budget, while both have multiple gaming interests seeking a limited number of licenses.
New York Casino Licensing
New York is a free-for-all among 17 different gaming operators. In all, 4 licenses will be handed out in fall 2014. Mohegan Sun seeks the license to build a $500 million casino in the Catskills, but has several competitors. Despite the many other applicants, the process in New York has gone relatively smoothly.
Massachusetts Casino License
In Massachusetts, the competition comes down to a one-on-one battle with Wynn Resorts. There, the decision to build a casino in the Boston area has been scandal-ridden and ugly at times. The Chairman of the Gaming Control Board has been sued by one gaming company, while those seeking to profit from a land deal have been accused of ties to the Russian mob. The Mohegan tribe hopes to manuever through the chaos of other company’s failed bids to win the prize of a casino license in Revere.
Why Mohegan Sun Needs a Win
Both gaming licenses are important to the wellness of the operation in Uncasville, Connecticut. When the casino opened in 1996, it depended on customer traffic from New York City and Boston. Uncasville is roughly equidistant between the two cities, so business was brisk. As time has passed, competitors in Pennsylvania and Rhose Islad have tried to lure gamblers in their direction. Meanwhile, the global recession hit the Mohegan Sun hard.
Those familiar with the history of gambling in the past 10 years look at Mohegan Sun casino in Connecticut as a case study, maybe even a cautionary tale. Connecticut’s biggest-grossing casino once was considered the biggest and brightest gaming operation in American northeast, maybe even the world.
Rapid Expansion Prior to the Recession
The story of the Mohegan Sun casino is much like that of Caesars Entertainment, which similarly spent a lot of money just prior to the 2008 stock market crash. In 2006, the tribe decided to expand their casino into the world’s grandest gambling destination. Times were good and the economy was strong. By the time the renovations were completed in 2008, the economic picture was entirely different. Suddenly, the Mohegan tribe had spent a billion dollars and less gamblers than ever were arriving.
Since then, the casino has had to retrench, but the licenses in New York state and Boston offer a new hope. By moving closer to the center of their customer base, the Mohegan tribe can recapture some of their lost demographics.
Boston Casino Plan
Boston Mayor Marty Walsh signed a deal with the Mohegan Sun on Friday, July 11, 2014, which might help secure the license in Uncasville. Under terms of the deal, the city will receive at least $18 million in gaming revenues. Also, the tribe will pay $45 million in transportation improvements for the city. It will spend $30 million over 10 years for capital improvement projects in the Boston area. The tribe also promises to use local vendors in their casino, while hiring employees from the East Boston area. It’s a good deal for the city.
The bargain between Walsh and the Mohegan tribe makes nothing official. Marty Walsh doesn’t decide who wins the casino license–the Gaming Commission of Massachusetts does. Steve Wynn has already won one round in the licensing battle with Caesars Entertainment, which later sued the gaming commission’s chairman. Also, the people of Boston can squelch any talk of a casino, if a majority votes for “SJC Rules Repeal of Mass. Casino Law Can Go To Ballot” in November.
The election is supposed to provide Boston voters one last chance to cancel earlier decisions to place a land-based casino in their metropolitan area. The original decision which set in motion the current licensing process was made in 2011. With three years to reconsider the decision and the economy in a better spot than it was in 2011, Boston voters might change their mind. Such a decision may not be likely, as a casino would bring thousands of jobs to the area, both temporary jobs in construction and permanent ones in the gaming and hospitality industries.
