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Inside Gaming: Wynn Resorts and Mohegan Sun Battle in Massachusetts, and More

Inside Gaming

In this week’s edition of Inside Gaming, we take a look at Wynn and Mohegan Sun battling in Massachusetts, gambling revenue falling in Detroit, and a proposed gambling amendment in Nebraska.

Mohegan Sun and Wynn Deliver Arguments in Massachusetts

Mohegan Sun CEO Mitchell Etess and Steve Wynn visited the Massachusetts Gambling Commission on Wednesday to argue for their respective proposals for the sole Greater Boston resort casino license.

According to The Boston Globe, Mohegan Sun presented a “polished argument” featuring a professional-grade video, music from Dropkick Murphys, and narration from local sportscaster.

Wynn presented his side essentially alone, speaking off the cuff without notes. He discussed his development record and business philosophy, touting some of the most famous and successful hotels in Las Vegas and around the world. Wynn also argued that Mohegan Sun would steer its high rollers to its flagship casino in Connecticut.

“We don’t give a damn about Connecticut,” Wynn said.

Both companies have already submitted several documents to support their respective applications. The public presentations on Wednesday took place before the five-member state gambling commission, and there were very few rules beyond the 90-minute time limit.

Mitchell Etess, chief executive of the Mohegan Tribal Gaming Authority, says their casino would be an “amazing” experience. Likewise, Etess believes the transportation network around the site is “really incredible.” Access from Logan Airport would be “super-easy.”

Mohegan Sun used nearly all 90 minutes, and focused on economic development, jobs, traffic planning, sensitivity to the environment, workplace diversity, and problem gambling.

Kevin Brown, chairman of the Mohegan Tribal Council, concluded the presentation by saying, “We are the home team.”

When Wynn took the microphone, he said that his presentation would differ from the “lovely job” done by Etess. The Wynn presentation took less than an hour, and one of their key points was that the casino would make about $800 million a year, thanks to a focus on big players in the national and international market. According to the Wynn team, a more traditional regional casino would only make around $500 million a year in Boston.

“That extra $300 million?” Wynn Resorts president Matt Maddox asked himself. “That’s the premium business.”

Wynn’s first attack on the Mohegan Sun plan focused on the horizontal layout. He believes his rivals would force staff and customers to walk more, and it will be difficult to run their property. Wynn also believes Mohegan Sun misfired by planning a “three-star hotel” as one of the two hotels on property.

That, he said, “is not going to bring anybody from outside the region.”

Wynn plans to build a five-star hotel.

After the meeting, the Mohegan team seemed shell-shocked with regards to Wynn’s boisterous presentation.

“Our presentation today was responsive and respectful to the Massachusetts Gaming Commission and the thorough process they have established,” Mohegan Sun said in a statement.

The panel expects to award the gambling license by May.

The Boston Globe has more

Gambling Revenues Decrease in Detroit

Detroit’s three casinos experienced their biggest year-over-year decrease in gambling revenue in 2013. Total revenues from MGM Grand Detroit, MotorCity Casino Hotel, and Greektown Casino-Hotel fell 4.7 percent to $1.35 billion, according to the Michigan Gaming Control Board.

Industry experts expected the decrease, and blame the decline on four new Ohio casinos, particularly Hollywood Casino Toledo. There was also the January 2013 expiration of the Social Security payroll tax cut, which cost the average worker $1,000 a year.

Gambling revenues in Detroit were above $1.4 billion in both 2012 and 2011.

According to the Detroit Free Press, taxes from casino gambling are a financial lifeline for the city. By pledging casino revenues as collateral in 2009 to Bank of America Merrill Lynch and UBS, the city avoided a potential debt default.

“If the pie is not growing and new supply continues to be added, it means that the size of everyone’s slice is going to continue to decline, and I think that’s what we’ve been seeing,” said Alex Calderone, senior vice president of the gaming consultant Fine Point Group.

Greektown Casino, the smallest of the three Detroit casinos by size, fell 6.7 percent to $328 million. MGM Grand dropped 6.2 percent to $566 million, and MotorCity Casino fell 1.1 percent to $454 million.

Fore more, check out the Detroit Free Press

Nebraska Lawmaker Wants Casino Gambling

Nebraska state Sen. Russ Karpisek is fighting for casino gambling, arguing that it will raise money for tax relief and state aid to schools, among other things.

The Cornhusker State currently allows keno, horse racing, and the lottery, but video gambling and casinos are illegal. Casino gambling is allowed in the four states surrounding Nebraska.

“We’re giving so much of this [gambling] money to other states. Why not save it for ourselves?” Karpisek asked.

Karpisek introduced a proposed constitutional amendment on Tuesday (LR416CA), which proposes that voters could approve casino gambling in the state. Citizens in a specific city or county in which a casino is proposed would then have to vote again in order to approve or disapprove a property.

The Nebraska state legislature would be allowed to establish fees and taxes on the casino. According to the proposed amendment, 50 percent would to go reduce statewide property taxes, 25 percent to public schools, 12 percent to the state Game and Parks Commission, 12 percent to the Department of Natural Resources, and one percent to fight compulsive gambling.

This isn’t the first attempt to bring casino gambling to Nebraska. Last year, Sen. Paul Schumacher, introduced his own amendment (LR34CA), where 50 percent of the proceeds from taxes would go to public education, 49 percent to health care, and one percent to compulsive gambling. The amendment remains in the General Affairs Committee.

Casino gambling was brought to a vote a decade ago, and was voted down twice. The first amendment received 47 percent of the vote, the second 36 percent.

The Sioux City Journal has more

Photo courtesy of The Boston Globe

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