Mass. gambling threatens Foxwoods, Mohegan Sun

Already in debt, Conn. facilities brace for rivals

December 27, 2011|By Andrew Caffrey, Globe Staff

LEDYARD, Conn. - Kyle Dacey is a regular at Foxwoods Resort Casino, driving the 100 miles from Brookline as often as five times a month. And he knows exactly what he’ll do once new casinos open in Massachusetts.

“There is no reason to drive an hour and a half when there’s one 20 minutes away,’’ said the 28-year-old Dacey as he concluded a recent evening of card-playing at Foxwoods.

Meanwhile, at the nearby Mohegan Sun casino, Dracut couple Luiza and Greg Harding recently caught a show by pop star Jennifer Lopez. They occasionally go for the full package - dinner, a show, maybe a little gambling, and a relaxing overnight.

The Hardings would certainly prefer to be entertained closer to home, but said they could be persuaded to return if Connecticut casinos make it worth their while, with special deals on hotel rooms, for example, and other promotions.

Such is the challenge facing the once invincible gambling tandem of Foxwoods and Mohegan Sun that - even before the threat of losing customers to Massachusetts - was struggling with declining revenues and big debts. The two are now plotting for the day when they will outright lose customers such as Dacey and scramble to keep those like the Hardings.

Industry specialists estimate that Connecticut’s two casinos could lose as much as 20 percent of their business to Massachusetts and other new competitors, in a mature market that is not producing many new gamblers to replace them.

“I don’t know where they go. Neither has much capacity to respond,’’ said Richard McGowan, an economist at Boston College who studies the casino industry.

While the recession was hard on the casinos, each remains a $1 billion enterprise and their executives said business appears to have stabilized lately.

Foxwoods and Mohegan Sun have mapped out overlapping strategies that will have them competing against each other even more intensely - for customers who live nearby and for the high rollers who flit from casino to casino, depending on the personal service and gambling adventure that awaits them.

In other respects their strategies diverge. Foxwoods, for example, aims to expand its convention meeting business, while the parent company of Mohegan Sun is trying to diversify with casinos in other states, including Massachusetts.

Foxwoods is the bigger of the two, a sprawling complex that rises from the Connecticut woods. Its roots go back to a bingo hall operated in 1986 by the Mashantucket Pequots, who opened the first casino in 1992. The Mohegans followed four years later, and their brightly lit 34-story tower can easily been seen from downtown Norwich a few miles away.

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