Even though the top executive for the Mashantucket Pequot Tribal Nation pooh-poohed the notion last week, Connecticut’s two tribal casino would be the logical buyer if MGM Resorts International sells off its downtown Springfield property, according to an expert on the regional gambling industry.
And Las Vegas-based MGM Resorts would have to sell MGM Springfield, a $960-million casino that opened only in August, if it were to buy the not-yet-opened Encore Boston Harbor Casino from embattled Wynn Resorts. State law says one operator cannot have two Massachusetts casinos.
“If Wynn really wants to sell, MGM would — if permitted — sell the Springfield casino. But what is fascinating is the possible dynamics that flow from that for the tribes and for Connecticut,” said Fred V. Carstensen, director of the Connecticut Center for Economic Affairs at the University of Connecticut.
Wynn and MGM acknowledged last week that they have been in talks as Wynn faces an end-of-May deadline to pay a $35 million fine to the state of Massachusetts. The fine results in the sexual harassment case against former chairman and founder Steve Wynn and the coverup of those claims.
If MGM has to sell, the Mashantuicket Pequot Tribal Nation and the Mohegan tribe are the logical buyers, Carstensen said.
“Then, they wouldn’t have to bother with their ‘convenience’ casino in the (East) Windsor and won’t have to share the proceeds with the State of Connecticut!,” Carstensen wrote in an email.
The tribes have proposed — but not yet started building — a $300 million to $400 million casino at the former Showcase Cinema property in East Windsor, about 14 miles south of Springfield. The idea is to capture business as Hartford area residents head to MGM Springfield along Interstate 91.
But if the tribes abandon the East Windsor plan, the dominoes really start to fall.
The state of Connecticut, hungry for revenue and miffed that East Windsor didn’t happen, could approve MGM Resorts stalled plans for a casino in Bridgeport, Carstensen said.
Bridgeport is closer to the lucrative New York City market.
“What a wonderfully complex political calculation,” Carstensen said. “MGM might come out ahead on both ends — getting the big Wynn casino and the Bridgeport casino.”
Last week, Rodney A. Butler, chairman of the Mashantucket Pequot Tribal Nation that operates Foxwoods casino, told the Hartford Courant that MGM Springfield isn’t worth what it cost to build the resort.
“MGM just spent $1 billion in Springfield. You can’t pay what it’s currently valued at because it’s not hitting its earnings.'' Butler said. "If you’re looking at it based on a multiple of what it’s earning today, it’s probably a $300 or $400 million property — not a $1 billion property. They have shareholders they have to appease. They’re not going to sell it for a 70 percent discount.''
MGM Springfield had projected $418 million in annual gross gaming revenue in its first year, or $34.8 million per month. So far, its highest one-month take was $26.9 million in September 2018, its first full month of operation.