$2.3 BILLION Foxwoods' Debt, Declining Revenues

Couple the article below about Foxwoods' massive debt with previous articles indicating declining revenues, declining patrons and market saturation, why would Massachusetts believe this makes sense?

Weak economy, competition press casino debt

                                       

July 10, 2012

Associated Press

 

HARTFORD, Conn.—The chairman of the Indian tribe that runs Foxwoods Resort Casino in eastern Connecticut said Tuesday that the weak economy and sharply rising competition in the Northeast are hindering efforts to renegotiate $2.3 billion in debt.

 

 

 

 

Rodney Butler, chairman of the Mashantucket Pequot Tribal Council, said in an interview on WNPR radio that casinos expected to open in Massachusetts in the next few years and table games that he believes will be approved by voters in Rhode Island in November will sharply cut into revenue for Foxwoods and its competitors.

Competition also is coming from New York City's first legalized gambling "racino" at Aqueduct Racetrack and slot machine casinos in Pennsylvania.

"What we're doing at Mashantucket is working with our lenders and we're talking about, 'Here's the reality of today and the economy, here's where it may be in the future but don't get your hopes up,'" he said.

"The near term outlook isn't that bright from a revenue outlook," Butler said. "Let's all accept that and work on it. It's simple math: Here's how much we earn, here's how much debt we can support and let's come to an agreement and work it out."

The Mohegan Tribal Gaming Authority, which operates the neighboring Mohegan Sun casino in Connecticut and another in Wilkes Barre, Pa., also has renegotiated debt. The two casinos and others borrowed to finance expansion and were caught short at the start of the recession in late 2007.

"It's a big growth story," Butler said. "We have one of the world's largest casinos and you can't build those for free so you have to take on incremental debt to do that and that's what the tribe chose to do over the years."

Butler also said more limits on smoking in the casino are not likely as Foxwoods seeks to cater to patrons who enjoy smoking while gambling.

In 2003, the Connecticut legislature banned smoking in bars and restaurants, but exempted private clubs and the two tribal casinos. The state Supreme Court upheld the law in 2007.

Smoking is banned at Foxwoods restaurants and other areas, but not at most gambling areas, Butler said.

"The politicians decided very quickly, those are our values," he said. "But the patrons are the ones who are spending the money. They want to smoke."

Butler said he's not a smoker and can't persuade his wife to visit the casino "because she says it smells like smoke."

"We do still have $2.3 billion in debt that we have to pay off. We have to provide a service to the patrons," he said.

http://www.boston.com/news/local/rhode_island/articles/2012/07/10/weak_economy_competition_press_casino_debt/