Rolling the Dice/ Gambling/ Opinion/ Spring 2014

Spring 2014 Editor’s note

Casino questions

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the massachusetts gaming Commission has a tough choice to make in awarding the Greater Boston casino license. The two finalists, Mohegan Sun and Wynn Resorts, are both strong companies, pledging to create 4,000 jobs and pump more than $1 billion into their projects. Yet, as our Conversation package with the leaders of the two companies reveals, their proposals and operating philosophies are very different. Here are some questions to consider as decision-time nears.

Do we want someone who already knows the local market? Mohegan Sun knows Massachusetts well. Many of the customers at its Uncasville casino in Connecticut come from Massachusetts and are already familiar with how Mohegan Sun operates. Steve Wynn, by contrast, is an unknown commodity from the Las Vegas Strip. He says Mohegan Sun faces an inherent conflict building a casino in Revere just 111 miles away from its Uncasville property, particularly when there is no tax on table games in Connecticut and a 25 percent tax in Massachusetts. Mitchell Etess, his counterpart at Mohegan Sun, says he has an arrangement with his financial backer, Brigade Capital, that keeps the two operations separate. He also notes the Las Vegas tax on table games is less than half the Massachusetts rate, yet Wynn offers no assurances about not steering business to Vegas. Steve Wynn: Don’t bet against me

How important is saving a dying horse track? Mohegan Sun says its deal with Suffolk Downs will guarantee the racetrack remains open. In its 3-2 vote approving a slots license for Penn National in Plainville, the three Gaming Commission members who voted for the company felt that keeping the harness-racing track open in Plainville was the deciding factor for them. Wynn says approving a casino to save a horse track is preposterous because the racing industry is dying. “Every slot machine joint put in every track hasn’t made one speck of difference,” he says.

Is the goal of the state gaming law to promote gambling or tourism? Etess boasts that his Connecticut casino brought in $911 million in gaming revenues last year, more than any other casino in the Western Hemisphere. Wynn, by contrast, says his noncasino revenue (hotel, food, entertainment) in Las Vegas last year was $1 billion, more than he earned from gambling. Wynn’s Vegas operation has far more hotel rooms than Mohegan Sun, so the comparison isn’t apples to apples, but Wynn clearly sees himself as a hotel operator who offers gambling. Etess is quite emphatic about Mohegan Sun’s focus. “This isn’t the Massachusetts non-gaming bill. This is the Massachusetts gaming bill,” he says.

Mohegan Sun CEO Mitchell Etess: We’re a better player Is speed or development more important? Mohegan Sun’s location in Revere is ready to go, while Wynn’s land in Everett, the former site of a Monsanto chemical plant, needs to be cleaned up. Choosing Mohegan Sun would get the casino up and running faster and deliver tax revenue to the state sooner. Choosing Wynn could help transform an ugly piece of land that developers have shown no interest in and give a break to a struggling community.

Who do we want to deal with? Mohegan Sun’s proposal for Revere is a team effort, with separate companies handling operations, design, retail, and restaurants. A New York hedge fund is handling the financing and Suffolk Downs will be the landlord. Wynn will own his proposed Everett casino and he and his staff will do just about everything in-house, from designing the hotel to running the restaurants and nightclubs.

Meet the Author

Bruce Mohl

Editor, CommonWealth
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About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Who do you trust? Wynn is telling us where the Massachusetts gaming law is deficient in several key respects and threatening to take a walk if changes aren’t made. Mohegan Sun says it is fine with the law as written but wouldn’t object if some changes were made. The Gaming Commission has already sided with Wynn on a tax withholding issue.

How the commission answers these questions will say a lot about what we as a state want out of a resort casino.