Steve Wynn or Mohegan Sun in Massachusetts?


On February 25th, voters in Revere approved Mohegan Sun’s plan to build a $1.3 billion resort at Suffolk Downs.  Voter approval is one of the most important steps in the Massachusetts casino license process and this vote is particularly important.  If Mohegan/Suffolk wins a license it will be in essence the Boston casino license. It will be the most lucrative of the three casino and one slots only licenses to be awarded in Massachusetts.

Voters in Revere have approved Mohegan Sun’s plan to build a resort casino on land owned by Suffolk Downs. Tuesday’s vote was the second casino vote in the city in just over three months. Revere voters in November approved a proposal at Suffolk Downs, on the East Boston line, but East Boston rejected it. Mohegan Sun came back with a proposed $1.3 billion facility that would be built entirely in Revere. Associated Press, 2-25-14

On February 27th, the Massachusetts Gaming Commission granted a slots only license to Penn National for a $225 million project at the Plainridge Racecourse in Plainville.  Penn predicts the property will open in the second half of 2015.  The license is much less lucrative than the Boston license, but the investment will be much less and the property will be returning cash to Penn years before the casino licenses begin to generate any return for their investors.

Massachusetts gambling regulators have chosen Plainville to be the site of the state’s first and only slots parlor.  The state gaming commission voted 3-2 on Thursday to offer the slots parlor license, with conditions, to Penn National Gaming, which plans to operate the facility at the Plainridge harness racetrack.  A proposal by Cordish Cos. in Leominster won two votes, including from commission chair Stephen Crosby. The third applicant, Raynham Park, did not receive any votes.  Commissioners who backed Plainville cited, among other factors, the preservation of harness racing in Massachusetts… an offer up to 1,250 slot machines, but no table games. Bob Salsberg, Associated Press, 2-27-14

Mohegan Sun has no prediction for its project because it does not have a casino license, only the approval of the host community.  Mohegan Sun now faces a battle with Steve Wynn for the one full-casino license to be awarded for the Boston area.  And as anyone who has followed the gaming industry knows, competing against Steve Wynn is a daunting task.  Steve tells a great tale and paints beautiful pictures, not of casinos but of dream-like resorts. Wynn is proposing a $1.6 billion resort in Everett, Massachusetts.  Jeff Compton and I made a friendly wager on the Boston license; Jeff thinks Wynn will win and I think the sun will shine on Mohegan Sun.

The wager between Jeff and I grew out of a discussion on the convoluted and sometimes very confusing selection process in Massachusetts; neither of us has a crystal ball and neither of us really understand the process. But since when did that ever stop anyone from forming an opinion?  However, Jeff does understand the state and its politics much better than I do; he bases his prediction on Wynn reputation, charisma and his elitist vision that should appeal to the good people of the Bay State.

My opinion is based on what I would do if I sat on the commission; I would vote for the local company – Suffolk Downs – and I would vote to protect an existing industry will an 80-year history in the area.   As a commissioner, I would view Wynn as an outsider and a bit too arrogant and demanding for my taste.  Wynn has chastised the commission, criticized the process and he demands a reduction gaming taxes.  Suffolk Downs on the other hand, is local and even their partner; the Mohegan Tribe of Connecticut, is a neighbor.  The stakes are huge, in the billions of dollars.  The host community will get a major economic boost from the construction, employment, attendant tourism with ancillary spending and millions in direct subsidies from the casino.  The casino operators are anticipating profits in keeping with the $1 billion of capital investments – big bucks.  Jeff and I are battling over ten dollars.  High stakes gambling, indeed!

My argument got some support from the Penn National license.  The commission vote was split at 3-2; two commissioners supported the Cordish project in Leominster.  One of the commissioners said his vote was based on the harness racing at the Plainville track.  Prior to the commission’s decision, the track owners made it clear, the only hope to save harness racing in Massachusetts was the slot license.  Suffolk Downs might not be quite as desperate as Plainridge.  However, like tracks across the country, Suffolk Downs management says the only long-term hope to save the track is a casino license; racing thrives only where it is subsidized by slot machines.

Steve builds dreams and his casinos are always very successful, but sometimes that is not enough for everyone.  I think the commission will vote for a local company and vote to save horse racing, while rejecting the ever-glib and charming, but ever-demanding and arrogant Steve Wynn.  Hey Jeff, want to double down?

 

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