The New England region and the state of New York have recently been busy with legislation to increase the number of state operated casinos in the region. One reason is revenue. States across the country are looking for new sources of revenue as a result of the economic downturn that started back in 2007. Another reason is very simple – demand. As the economy begins to warm up, the amount of discretionary and recreational income will increase, opening the doors for the creation of new entertainment venues.
Currently, Maine, Vermont, and New Hampshire have excluded themselves from the regional casino build-up, citing lack of public support or damage to their tourism industry as key reasons. Rhode Island has a casino or two but does not seem interested in further expansion at this time. Connecticut has Foxwoods, the region’s largest casino-retail-hotel complex, spanning over 30 acres, along with several other worthy state competitors. But Foxwoods stands out from the other regional casinos in other ways – mostly bad.
Reports over the last few years have Foxwoods in the middle of several controversies. Among them are complaints of mismanagement and a general decline of the casino property. Recently it was reported that one of the casinos was reducing its hours of operation, and rumors of employee layoffs began shortly afterward. (http://www.boston.com/news/local/connecticut/2014/05/15/foxwoods-cut-casino-hours-layoffs-possible/rQtmdTC1qsVvM91KRm95xI/story.html?rss_id=Top-GNP) There are qualified opinions that Foxwoods has financially operated over its head for a number of years and has problems controlling its debt load. (http://online.wsj.com/news/articles/SB10001424127887323689204578574104047610468) The oncoming train may be ready to strike.
With Massachusetts now opening the door for state run casinos, Foxwoods appears to be looking for partners to cross the border with and expand their operation. Fall River, located in southeast Massachusetts, hopes to team up with Foxwoods to grab a sizeable chunk of the available gaming money in the Boston area. The current plan is to expand the original idea of a 30 acre Fall River site to a 120 acre site. The idea for a larger site may be good, but the selection of Foxwoods as the partner seems unusual given its history.
According to the Hartford Courant, Will Flanagan, the mayor of Fall River, has worked closely with Foxwoods to arrive at a deal. The plans are in the early stages and there has yet to be a proposal drawn up to put before the Fall River voters. (http://www.courant.com/business/hc-foxwoods-fall-river-120-acres-20140519,0,6511046.story)
What also has yet to be seen is the answer to why Mayor Flannigan would invite such a partnership given the public problems of Foxwoods. The history is that Foxwoods has had to refinance its debt several times over the last 8 years in order to keep running. Investing in any new casino is a roll of the dice, but the question is what happens to a failed Fall River casino and its residents?