Mass. Gambling Chair: Approval Of 3 Casinos Not Definite
http://www.wbur.org/2012/05/22/casinos-approval
- May 22, 2012
Stephen Crosby noted that, by law, the commission still needs to consider how many casinos the market can bear.
“The legislation is very clear that we can license up to three casinos and up to one slots parlor,” Crosby told WBUR’s All Things Considered host Sacha Pfeiffer. “The clear assumption in the legislation is that that is what we’ll do — that there probably will be four such units.”
Starting June 14, the commission will re-examine the economic studies commissioned by the governor, Legislature and Greater Boston Chamber of Commerce before the state’s gaming law was passed. That re-evaluation will determine if economic projections need to be updated based on current conditions.
Meanwhile, Boston native Sheldon Adelson’s Las Vegas Sands Corp. says it is abandoning plans to pursue a casino in Massachusetts due to concerns that three casinos will over-saturate the market.
But Crosby said he isn’t concerned about the market saturation, assuming the economic studies are accurate.
“Adelson’s been saying this [about market dilution] for a long, long time…and he’s entitled to his own opinion,” Crosby said. “But there are a lot of other quality suppliers out there who are anxious to bid, and they apparently read the data a different way.”
And just maybe Sheldon Adelson is right.
According to Crosby, if the commission doesn’t like some of the proposals it receives or has concerns about approving three casinos at the same time, it can phase the casinos in gradually.
“We could do one and see how it goes, and do another later,” he said.
Massachusetts Casino Plan A ‘Pipe Dream,’ According To Economist
Still, one Massachusetts economist says the state is not being realistic in thinking that it can support three major resort casinos. Elliott Morss has taught at universities including Harvard and Brandeis, and he researches the economics of the entertainment industry. In a new online article, he describes a “coming gambling casino glut in the Northeast.” WBUR’s All Things Considered host Sacha Pfeiffer asked Morss if he thinks casino mogul Adelson is correct that the region’s casino market may be saturated.
Elliott Morss: Yeah, I think he is. If you just start with New Jersey, there are three gambling casinos coming out of bankruptcy. Trump’s is coming out for the third time. You go to Rhode Island — one of the two gambling casinos in Rhode Island is just coming out of bankruptcy. The two biggest gambling casinos in the world are in Connecticut — Foxwoods and Mohegan Sun — and they’re trying to negotiate down their tremendous debt. So when Adelson sees something like this going on, my sense is he’s saying, ‘Why would I go to that part of the U.S. when I see all this bankruptcy?
Why should I do it there when I can put another one in Macau or Thailand or some other Asian nation where the sky’s the limit?’
Sacha Pfeiffer: As you talk about the tough financial landscape for casinos, with so many of them in the Northeast coming out of bankruptcy, are you saying that the market is not just saturated or approaching saturation, but actually sick?
I think the whole market is very, very sick. There’s two things at work here, I think. One is the fact that it’s coming out of the recession very slowly, and that’s true not only just here but if you go to Las Vegas. But the second part of it, and the important part of it, is if you look at the demographics of Americans who go to gambling casinos, it’s a place where people like to go to smoke in public – one of the very few places left where you can smoke in public – and drink and gamble. Who are we talking about? We’re talking about older people. Younger people don’t smoke as much as older people. Younger people, if they they want to gamble, are much more accustomed to the Internet. So the future, if you just use the demographics approach, is not very positive.
So then why would Mohegan Sun, which is a potential bidder for a casino in western Massachusetts, want to develop another New England casino if it’s hurting in Connecticut?
Good question. Maybe there’s something they know that I don’t. Look, they’re virtually in bankruptcy now, so it’s not like these are people that know what they’re doing.
In the big picture, if Massachusetts does license three casinos and a slot parlor in what you term a “glutted market,” how will those casinos fare?
I think you have great difficulty getting your money back on a big casino with all the bells and whistles. If, on the other hand, you just keep it to a nice place where people can play slots and eat a meal or so, I think you can take revenues away from other states and they can be successful.
Do you think that if the state would decide on just one slot parlor and just one casino, that could substantially improve the equation?
One big casino is better than three.
It sounds like, overall, you’re saying that casinos may not be the financial panacea that Massachusetts hopes they might be.
The thought that there’s some great place in Massachusetts for these sorts of big high-end casinos, I think, is a pipe dream.
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