Report: New casinos in other states will siphon $570M from Connecticut gambling industry

Industries Associated Press

The tribes proposing to build new casinos in Connecticut released a report Monday that says new facilities in New York and Massachusetts, if left unchecked, will siphon away $570 million annually in gambling revenue.

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The leaders of the Mohegan Tribe and the Mashantucket Pequot Tribal Nation said they were not surprised by the forecast, but they hope the report they commissioned will help inform others including the governor, who has been noncommittal about his position on opening more casinos.

"We want to continue the education process," said Kevin Brown, chairman of the Mohegan Tribe, noting that the proposal for expanded gambling has gotten mixed reviews.

The tribes own and operate two rival casinos, Mohegan Sun and the Foxwoods Resort Casino, and are proposing to go in together on small casinos near state boundaries to fight the growing competition. Legislation pending in the General Assembly would authorize as many as three new casinos.

By 2019, new casinos in Massachusetts and New York will be taking away $570 million annually in revenue from Connecticut slot machines and table games, as well as $133 million in non-gambling revenue, according to the report by Pyramid Associates, a consulting firm led by gambling market expert Clyde Barrow. The study also says 5,800 jobs would be lost at the casinos by the end of the decade.

"These figures indicate that the opening of resort casinos in Massachusetts and New York is about to catalyze one of the largest inter-state transfers of gaming revenue in recent U.S. history — second only to the transfer from New Jersey's casinos to Pennsylvania's casinos that occurred from 2006 to 2014," the report said.

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Under a compact with the state, the two tribes turn over a fourth of their slot machine revenue to Connecticut — an amount that has been declining steadily since reaching a peak of nearly $430.5 million in 2007. Gov. Dannel P. Malloy's budget projects the state's share will drop to $254.3 million in fiscal year 2017.

The new report says the state should expect to lose an additional $100 million annually once the resort casinos open in Massachusetts and New York.

The tribes still are working out details of their pitch for new casinos, but Brown and Pequot Chairman Rodney Butler said Monday that they are open to sharing revenue from both slot machines and table games. Lawyers for the tribes and the state's attorney general have been involved in discussions.

Malloy, a Democrat, said Monday that he would be watching to see how the legislation progresses and would not commit to supporting more casinos.

"I don't rule it out and I don't rule it in, to tell you the truth," he said.

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Associated Press writer Susan Haigh contributed to this report.