Inside Asian Gaming

May 2008 | INSIDE ASIAN GAMING 39 Market Outlook bandied about as an early estimate. That’s from gaming revenues estimated at about US$1.5 billion annually. “The estimate is US$400 million in revenue,” a spokesman in the governor’s office said. “Of that, US$200 million is to go to tax relief, and the other US$200 million is to be used for transportation and rebuilding the infrastructure.” In addition to this long-term revenue, the state expects to generate a one-time windfall of US$800 million in licensing fees generated by the public auction of the rights to develop and operate the casinos. Of this sum, US$300 million will be dedicated to solving projected 2008 shortfalls to local aid revenues, with the rest going toward transportation projects. The fact that Patrick has already included casino licensing proceeds in this year’s budget hints of the confidence he has that this plan will soon be approved by the state Senate and House of Representatives. A number of factors appear to be working in favor of casino legalization. To start, one of the licenses can be used to placate the recently-recognized Mashpee Wampanoag tribe, which is well on its way to developing its ownMassachusetts casino. The tribe has already reached a deal with the southeastern Massachusetts community of Middleboro, where they have secured a 500-acre parcel of town land and plan to construct a US$1 billion resort. The resort will include a casino large enough to house 4,000 slot machines and 125 table games, a 1,500 room hotel, 20 shops, a 10,000 seat arena and a 36-hole golf course. However, the land for the casino must be placed into trust status by the federal government and a gaming compact signed between the state and the tribe before casino development can begin, a process that could take years. The Mashpee may consent to a state- controlled gaming license if it offers speed for their new casino. The casino legislation also comes at an auspicious time, when the state, and the rest of the nation, appears to be headed for an economic downturn. Local unions have already come out in support of the casino plan because it generates thousands of much-needed jobs for the state. “We have to fight at least as hard as the governor is going to fight on this,” Louis Ciarlone, president and business manager of IBEW Local 123, told the Boston Herald . Despite this support, passage of casino enabling legislation is still far from a sure bet. Indeed, previous attempts to liberalize Massachusetts gaming law have vaporized in the state legislature,themost recent being last year’s bill seeking slots at racetracks, which failed in the House by a 100-55 vote. House Speaker SalvatoreDiMasi is reportedly “skeptical”about the state’s casino plans,and, according to the Associated Press , warned Patrick against including projected licensing fees from three resort style casinos in his budget, saying Patrick shouldn’t “put any money in [the budget] that you hope you’re going to get.” Much like Massachusetts, New York looks toward expanded casino gaming to help cover projected budget shortfalls and provide a much-needed economic boost to depressed areas within the state. However, instead of initiating a potentially bruising battle with the state legislature over commercial casino legalization, Gov. Spitzer is instead working with state gaming tribes seeking to develop off-reservation casinos, showing a willingness to sign-off on state/ tribal gaming compacts in return for a share of slot revenue. The deal that has garnered the most attention is with the St. Regis Mohawk Tribe, which is attempting to build a US$600 million casino in the Catskills area of the state. The Stockbridge Munsee of Wisconsin and Seneca-Cayuga Tribe of Oklahoma also sought to build casinos in the region. However, Spitzer and tribal plans have run into a major roadblock. To be legal, land on which the Catskill casino was to be developed had to be placed into trust status by the federal government’s Department of the Interior. The DOI recently ruled against all three projects. The decisions were based on a new Bureau of Indian Affairs policy that virtually eliminates any chance of off- reservation gaming. Until the BIA policies are changed,casino gaming coming to the Catskills, and closer to the Connecticut and Atlantic City casinos, appears unlikely. Home protection Although future success is far from certain, attempts by New York, Massachusetts, Pennsylvania and other eastern states to establish or expand casino or slot device gaming have forced both Connecticut and Atlantic City operators to take steps to protect market share. For the Mashantucket Pequot and Mohegan tribes, protection comes in the form of facility expansion. Although it is already home to six casinos that collectively offer more than 7,000 slot machines and 400 table games, Foxwoods has broken ground on MGM Grand at Foxwoods, a US$700 million mixed-use project that will add 2 million square feet of additional gaming, entertainment, meeting, dining and retail space to the resort.This new development is scheduled to open this year. Mohegan Sun is also undergoing a massive expansion. The US$740 million Project Horizon will be completed in phases through 2010, and will include the Casino of theWind which will house 960 slot machines and a new 1,000-room hotel. Both tribes are also developing gaming complexes in Pennsylvania, and are likely to expand elsewhere in the region as opportunities arise. Despite a decline in overall casino revenues, a number of new casino projects are planned for Atlantic City, including a ground-up development from Pinnacle Resorts. The Borgata, Trump Taj Mahal and other established casinos are also looking to expand both rooms and gaming space. “While this is the first year that revenues have decreased, the future for the industry is very bright,” Kassekert told the Newark Star-Ledger. “Right now, existing operators and new developers are investing well over US$10 billion into new or expanded casino hotels. That kind of investment shows that the industry and the investment community remain bullish on Atlantic City.” By Paul Doocey,International Gaming and Wagering Business (IGWB) magazine. Special to Inside Asian Gaming . A crowded slot bank at Mount Airy Casino Resort