Experts: Tribal casino 'death knell' for Brockton bid
The state’s own casino study done in 2008 cautioned a tribal casino in the same region with a commercial casino would be “disastrous.”
Two casino experts who have observed the Massachusetts gambling market before and after casinos were legalized say the Mashpee Wampanoag’s federal land decision should put an end to the potential licensing a commercial venture in Southeastern Massachusetts, known as Region C.
On Thursday, the Massachusetts Gaming Commission will discuss a request by Mass. Gaming & Entertainment, which hopes to build a $650 million casino in Brockton, to issue a license regardless of the tribe’s status. The company is likely to argue the tribe faces a protracted legal fight, though no lawsuit has yet been filed and the tribe appears poised to move on with its Taunton casino plans while a court battle is waged.
That makes the commission's decision clear, experts say.
“It’s the death knell to the one in Brockton, period,” Richard McGowan, an associate professor at Boston College, said Tuesday.
“If you assume the tribe goes forward with its plans, it doesn’t make sense to issue a commercial license in Region C,” said Clyde Barrow, a casino expert with Nathan Associates Inc.
Rush Street Gaming, the company backing the Brockton proposal, has made it clear in statements it believes it can compete in the market and a study by Innovation Group reportedly shows the Brockton casino's market share would drop just 10 percent in head-to-head competition with the tribe.
“Innovation Group never factors in cannibalization,” Barrow said. In markets where a casino comes in to an existing market, the new facility takes 20 to 30 percent of the business, Barrow said. In Massachusetts, there would be three gambling facilities in a 25-mile radius if Brockton were to join the tribal casino and Plainridge Park, which is already open.
“There’s no scenario where that comes out better for the state,” he said.
In the case of the Mashpee Wampanoag proposal, it would be a devastating blow to the state’s coffers, he said. Under a tribal-state compact, the tribe would pay 17 percent of gross gambling revenues if there is no competition in the region. If there is competition, the tribe pays zero.
“There’s an inherent natural advantage for a tribal casino versus a commercial casino,” Barrow said. “That’s tens of millions of dollars per year, they can give to their customers in free slot play, free rooms, free food and free tickets for entertainment. They can make their facility more lavish and attractive. There’s a whole range of benefits.”
Ultimately, it may be difficult for any casino to contend with the $1.7 billion investment Steve Wynn has promised in Everett, McGowan said.
“I can’t imagine Brockton can compete with that,” he said.
Spectrum Gaming, a consultant for the commission which did a 2008 state study before casinos were licensed, warned that a tribal casino competing with a state-licensed casino “would have potentially disastrous effects” on revenue generated for the state.
“When tribal casinos do not fall under the same regulatory and tax guidelines as commercial casinos, they often have a distinct competitive advantage,” the Spectrum study stated.
Factoring in what’s being talked about in Rhode Island with a facility in Tiverton near the state line and a proposal by two Indian tribes in Connecticut to join forces on an East Hartford casino, McGowan said the threat of saturation is real.