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Foxwoods may face long odds in Massachusetts, experts say

By Brian Hallenbeck

Publication: The Day

Published February 12. 2013 4:00AM
Mashantuckets' ability to offer financing questioned by some

Foxwoods Resort Casino has joined a decided long shot in the race for a casino license in northeastern Massachusetts, two New England gaming experts said Monday.

"For a number of reasons, I'm surprised" at Foxwoods' move, Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth, said. "Everyone has been puzzled by the fact that Foxwoods hasn't been involved (in Massachusetts), so in one sense, it's not totally unexpected."

But, he said, "I don't see what they can bring to it other than a recognizable name."

The Boston Globe reported Sunday that Foxwoods, the huge casino complex owned by the Mashantucket Pequot Tribe, is partnering with Crossroads Massachusetts LLC on the development and operation of a commercial casino in Milford, in southeastern Worcester County. The site is within the northeastern Massachusetts region that includes Boston.

Crossroads, whose members include David Nunes, a Colorado real estate developer with Massachusetts roots, and Las Vegas-based Warner Gaming, filed an application Jan. 15 for the one casino license the Massachusetts Gaming Commission will award for the region. A Milford casino would compete with Foxwoods and Mohegan Sun, both of which operate under Indian gaming laws.

"For us, it's the right place, right time," Scott Butera, Foxwoods president and chief executive officer, said Monday. "It's a great site, right off I-495 on a piece of flat, raw, developable land. There's a lot about the project we liked."

Foxwoods would be an equity partner in the project and would manage the casino. Butera said Foxwoods' investment in the project would be "substantial."

Barrow, however, questioned Foxwoods' ability to help finance the project, given the Mashantuckets' financial problems in recent years and the tribe's ongoing - albeit largely complete - efforts to restructure debt. He also said the Crossroads project would be hard-pressed to compete for a license against two of gaming's biggest Las Vegas-based names - Wynn Resorts, which is proposing a casino in Everett, and Caesars International, which is partnering on a plan to convert the Suffolk Downs racetrack in Boston into a resort casino.

"We know they're short of cash, so it doesn't seem to be financing that they're bringing - and that's what (Nunes) needs," Barrow said of Foxwoods. "They're not known as operators, either."

The Rev. Richard McGowan, a Boston College economist who studies gaming, said in an email exchange that he doubts Foxwoods' expertise in operating a casino can match that of either Caesars' or Wynn's.

While the Mashantuckets' Foxwoods Development Co. has pursued casino development and management projects in Philadelphia, Kansas, the Caribbean and elsewhere, none has materialized.

Butera said that although the Mashantuckets' restructuring of $2.2 billion in debt is not yet complete, the tribe is in a position to move forward.

"Now that a lot of the heavy lifting is behind us," he said, referring to debt-restructuring negotiations with lenders, "we have an opportunity."

With Massachusetts residents making up as much as a third of Foxwoods' customer base, the Mashantuckets' pursuit of a project in the Bay State had been expected earlier. Mohegan Sun, one of four applicants for the sole western Massachusetts license, first proposed a casino in Palmer in 2007.

"It's a market we know well," Butera said of Massachusetts. "It's good for us to be involved there. As things improve with the economy, we think we can bring a lot of growth to the market."

The rural Milford casino site has an advantage over the other western Massachusetts locations, which are urban, Butera said.

The gaming experts took another view.

"In general, I lean heavily towards the urban casino," said McGowan, the Boston College economist. "The rural one makes sense when you have a monopoly in an area such as Foxwoods had in New England for over a decade. But as they tried to make themselves into a 'destination resort' it was disaster, witness their bankruptcy."

Barrow, the UMass Dartmouth researcher, questioned whether a casino in Milford would produce the best return for the state since it could leave the "northeastern quadrant," - Boston and north of it - to New Hampshire, where lawmakers are expected to consider legalizing casinos. That area of Massachusetts represents the Bay State's most lucrative casino market, he said.

b.hallenbeck@theday.com

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