When Everett mayor Carlo DeMaria was asked about the possible sale, he said, “Enough is enough.”
Talks between MGM Resorts and Wynn Resorts about the sell of the Encore Boston Harbor casino could anger local business and political leaders. That is the story Boston media sources told after the two Las Vegas casino companies admitted they’ve had talks about a sale in recent weeks.
Any transaction would be complicated. MGM Resorts opened the MGM Springfield in August 2018 after years of building a relationship with the residents and city council of Springfield.
More than that, Massachusetts state gaming laws assure that a single casino company cannot own more than one license in the state. If MGM Resorts buys Encore Boston Harbor, it would mean the sale of MGM Springfield.
The Massachusetts legislature could vote to waive the requirement, but that isn’t likely to happen. After years of kind words and good talk, Massachusetts lawmakers probably would not be happy with a quick sale of both casinos.
Will Wynn Resorts Sell Encore Boston Harbor?
Nevertheless, it might happen. Wynn Resorts received a $35 million fine from the Massachusetts Gaming Commission recently for its board’s role in the Steve Wynn scandals. The MGC decided Wynn’s board members covered up Steve Wynn’s conduct for more than a decade.
More than that, it found current Wynn Resorts CEO Matt Maddox also looked the other way as his boss engaged in alleged misconduct. The MGC fined Matt Maddox an unprecedented $500,000. If Wynn Resorts sold the $2.5 billion casino resort in Everett, it would rid the MGC of a public relations problem.
Fred Carstensen on MGM Springfield Sale
Fred V. Carstensen, who serves as Connecticut Center for Economic Affairs at the University of Connecticut, floated an interesting scenario. Carstensen said the two Connecticut gaming entities, the Mohegan and Mashantucket Pequot tribes, might buy the MGM Springfield from Jim Murren’s company.
Carstensen said, “If Wynn really wants to sell, MGM would — if permitted — sell the Springfield casino. But what is fascinating is the possible dynamics that flow from that for the tribes and for Connecticut.”
“Then, they wouldn’t have to bother with their ‘convenience’ casino in the (East) Windsor and won’t have to share the proceeds with the State of Connecticut!”
Mohegan Tribes’ Boston Ambitions
The Mohegan Tribe partnered with Suffolk Downs on a rival casino proposal to Encore Boston Harbor. Then Mohegan Sun and Foxwoods Casino (the Mashantucket Pequot tribe) launched a joint partnership to build a satellite casino in East Windsor, Connecticut — a suburb of Hartford.
The idea was to build a firewall for Hartford area gamblers. Instead of driving 30 miles down the road to the MGM Springfield (instead of an hour to Foxwoods or Mohegan Sun), they could stay in town to gamble. MGM Resorts filed a lawsuit against Connecticut to stop the casino. Later, its lobbyists convinced the US Department of the Interior to deny the East Windsor Casino a license (if you believe the two tribes).
MGM vs. Mohegan Sun & Foxwoods
In short, MGM Resorts and Mohegan/Foxwoods partnership have been at odds for years. In Fred Carstensen’s scenario, the two sides patch over their differences and make a deal over the MGM Springfield.
Questions remain about such a deal. The Foxwoods/Mohegan Sun joint venture planned a $300 million to $400 million investment in the East Windsor casino. The MGM Springfield cost $960 million to build, so the tribes would have to invest 2 to 3 times the cost to make the deal happen.
Of course, it would be lucrative and would solve a lot of their problems. For one, slots taxes are lower in Massachusetts than Connecticut.
Will Massachusetts Leaders Approve Encore Casino Sale?
Another problem is the simple matter of goodwill. The Massachusetts congressional delegation is moving heaven and Earth in the US Congress to pass H.R. 312, which would ease the way for the Mashpee Wampanoag tribe to build First Light Casino in Taunton. That effort likely will fail, because US President Donald Trump opposed HR 312 (and might veto the bill).
Would the Massaschusetts legislature favor a deal that helps Native American tribes in an adjacent state, while its own domestic tribe goes without a casino? Maybe, if nothing else because the Mashpee Wampanoag don’t have casino funds to buy the MGM Springfield. On the other hand, the Mashpee Wampanoag parntered with Genting Group to build First Light Casino, so Genting might be recruited for a Springfield deal.
Complicating everything is the local aspect. MGM Resorts promised to build community ties and invest in Springfield’s culture when trying to win the casino license there. Wynn Resorts established a close enough relationship with Everett Mayor Carlo DeMaria that the mayor threatened to veto a sale to Mohegan Sun. These relationships might not matter in the grand scheme of things, but casino companies are in the PR business, so they must consider public opinion to some degree.
