Wednesday, June 19, 2013
It was a surprising statement coming from the CEO of the largest casino in the Western Hemisphere. Gambling is not enough.
The entrance to Foxwoods Resorts and Casino in Ledyard, Conn.
That was the analysis of Scott Butera, chief executive officer of Foxwoods Resorts and Casino in Ledyard, Conn., the super-profitable Indian-run casino that was caught up short when the economy took a dive in 2007.
Butera said that gambling would remain the core business for the casino, but it would rely on entertainment, conferences and retail, eventually relying on non-gambling activities for half of its revenue.
This change is being driven by competition, and that's why Maine policy makers should pay attention.
The Connecticut casinos, Foxwoods and Mohegan Sun, shared a near monopoly on East Coast casino gambling with Atlantic City and profited handsomely.
Their take was so dramatic, other states took notice.
Connecticut's neighbors, New York and Massachusetts, have now legalized casino gambling and significant investments are planned for facilities close enough to compete.
Maine has also joined the gambling game on a small scale, with Hollywood Slots in Bangor and the Oxford Resort and Casino. Neither facility hopes to compete with Foxwoods for entertainment or shopping; all they offer is a chance to play slots and table games. It is hard to imagine players from New York or Boston making the long drive to Oxford or Bangor, past more glittering options, just to gamble, so these Maine businesses will rely more on local customers.
This is where the policy makers should take note: The state should do a thorough job of tracking where the money gambled in Maine is coming from and report it to the public.
Moving Maine money around inside the Maine economy is not economic development. If these businesses are not capable of attracting a significant amount of their business from out of state, they really offer very little to the state.
Butera says that gambling, by itself, is not enough, and if he is right, the Maine operations are likely to be in trouble.
How this plays out in the next few years should drive state policy on gambling's expansion.