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CONNECTICUT NEWS
This is Big News about Foxwoods
Powerful New Player At Foxwoods
Deal Would Put MGM Grand Name On New Hotel-Casino; State Has Concerns
April 26, 2006
Gambling giant MGM Mirage and the owners of Foxwoods Resort Casino are teaming up to bring Las Vegas to Ledyard, infusing the state's older casino with new customers, new glitz and new money.
The agreement announced Tuesday - under which the new hotel and casino Foxwoods is building would be known as the MGM Grand - looks beyond southeastern Connecticut to further opportunities throughout the United States and abroad. MGM and the Mashantucket Pequot Tribal Nation detailed what they called a series of "ongoing relationships" that begin at Foxwoods and will continue wherever their joint projects take them.
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"This is marrying the most successful Native American gaming company in the country with one of the most successful commercial gaming companies in the country," said Mickey Brown, who was CEO at Foxwoods from 1993 to 1997. "It gives them both a national presence."
The announcement caught state officials by surprise, and they fired off a letter asking for details. The state's gaming compact with the tribe requires the state to sign off on any casino expansion.
The plans also riled anti-casino advocates.
"This is a thriving business making a [lot of money], and they're just getting bigger and bigger," said Jeff Benedict, a lawyer, writer and former head of the Connecticut Alliance Against Casino Expansion. "Where does it end? That's the real question here."
Should the deal be completed, industry executives such as Brown agree that MGM gives Foxwoods a jolt.
"It's going to push Foxwoods two or three clicks, because it's new, it's a recognized product, MGM Mirage is a top-line casino in Vegas and now they're coming to your neighborhood," Brown said. "To grow, Foxwoods had to find some way to [attract] a greater number of people, and this is certainly a very creative way of doing that."
Foxwoods is in the midst of a $700 million expansion that includes an 825-room hotel, a 5,000-seat theater, a convention center and ballroom, nightclubs and 1,500 additional slot machines. This complex would take the MGM Grand name.
Las Vegas-based MGM Mirage owns and operates 24 casinos in Nevada, Mississippi and Michigan. Its Las Vegas properties include the MGM Grand and the Bellagio and Mirage hotels.
The deal would give Foxwoods access to MGM's database of more than 22 million customers and allow it to use MGM's partnerships with other companies to help attract new restaurants and top-tier entertainers to eastern Connecticut, Foxwoods CEO William Sherlock said.
While Foxwoods officials were excited about the prospects Tuesday, state officials say they want to know more about the structure of the deal because legal hurdles could arise.
Attorney General Richard Blumenthal and Paul A. Young, executive director of the Division of Special Revenue, sent the tribe a letter Tuesday asking for copies of any documents and agreements that concern the deal.
"If [MGM has] anything to do with the casino, there has to be intense and critical scrutiny," Blumenthal said. "We certainly make no assumptions that there are legal problems, but there are also in this area a lot of uncharted waters and a lot of unanswered questions."
Officials at Foxwoods were careful to note that the deal does not include the transfer of ownership to MGM Mirage, something they know would be of concern to the state.
"This is not an ownership question at all," Foxwoods spokesman Bruce MacDonald said. "This is largely a branding, a marketing, a licensing arrangement. It has absolutely nothing to do with ownership. It's a business arrangement."
Benedict called the deal the "ugly but inevitable outcome" of Indian gaming on land that is largely immune from federal and state oversight.
"The idea here was never to allow Las Vegas or any other non-Indian casinos to get a foothold in states that bar them from operating," Benedict said. "The fact of the matter is that MGM and Trump and all these other casinos are not supposed to be able to come into Connecticut. There's no way around that and I don't care how you dress it up."
Mac Turner, who serves on the board of the Connecticut Alliance Against Casino Expansion, said it appears "southeastern Connecticut is being written off as the corner of the state where casinos are going to flourish and be allowed without any complaint from anyone."
Foxwoods officials said it was too early to talk about details such as whether patrons would be able to use Foxwoods wampum points at MGM properties. But the relationship will give both companies new ways to cater to customers.
Brown said, for example, that MGM could tell a patron who regularly gambles in Las Vegas, "If you're ever in the New York or Boston area, we can set you up at Foxwoods."
"It gives you more toys to give the player to play with," Brown said. "You have more ways to entertain the customer, to cultivate him and give him a better experience."
He also noted that at MGM's higher-end properties in Las Vegas, customers spend twice as much money on entertainment and food and beverages than the industry average.
"They have more disposable income and they're more affluent people," he said. "So while Foxwoods caters to everyone, this is going to bring in existing players and it will bring in a certain level of new players, too."
Specifically, the announcement sets out a series of "ongoing relationships" between the two corporations, including: the development of the $700 million casino and resort to use the MGM Grand brand, under a long-term license agreement; the planning of future "destination gaming resorts" at Foxwoods; MGM's provision of technical advisory services to Foxwoods; and cross-marketing between the two corporations. Also, MGM would provide the tribe with a loan of up to $200 million to finance a portion of the tribe's investment in joint projects.
The Mashantuckets already have been seeking ways to take their brand beyond Connecticut.
They are planning a 600-acre resort and casino in the U.S. Virgin Islands; they are competing for a license to build a slots parlor on the Delaware River in Philadelphia; and they said Tuesday they plan to file notice this week of their intention to invest $400 million in a casino resort in Biloxi, Miss.
This is Big News about Foxwoods
Powerful New Player At Foxwoods
Deal Would Put MGM Grand Name On New Hotel-Casino; State Has Concerns
April 26, 2006
Gambling giant MGM Mirage and the owners of Foxwoods Resort Casino are teaming up to bring Las Vegas to Ledyard, infusing the state's older casino with new customers, new glitz and new money.
The agreement announced Tuesday - under which the new hotel and casino Foxwoods is building would be known as the MGM Grand - looks beyond southeastern Connecticut to further opportunities throughout the United States and abroad. MGM and the Mashantucket Pequot Tribal Nation detailed what they called a series of "ongoing relationships" that begin at Foxwoods and will continue wherever their joint projects take them.
ADVERTISEMENT
"This is marrying the most successful Native American gaming company in the country with one of the most successful commercial gaming companies in the country," said Mickey Brown, who was CEO at Foxwoods from 1993 to 1997. "It gives them both a national presence."
The announcement caught state officials by surprise, and they fired off a letter asking for details. The state's gaming compact with the tribe requires the state to sign off on any casino expansion.
The plans also riled anti-casino advocates.
"This is a thriving business making a [lot of money], and they're just getting bigger and bigger," said Jeff Benedict, a lawyer, writer and former head of the Connecticut Alliance Against Casino Expansion. "Where does it end? That's the real question here."
Should the deal be completed, industry executives such as Brown agree that MGM gives Foxwoods a jolt.
"It's going to push Foxwoods two or three clicks, because it's new, it's a recognized product, MGM Mirage is a top-line casino in Vegas and now they're coming to your neighborhood," Brown said. "To grow, Foxwoods had to find some way to [attract] a greater number of people, and this is certainly a very creative way of doing that."
Foxwoods is in the midst of a $700 million expansion that includes an 825-room hotel, a 5,000-seat theater, a convention center and ballroom, nightclubs and 1,500 additional slot machines. This complex would take the MGM Grand name.
Las Vegas-based MGM Mirage owns and operates 24 casinos in Nevada, Mississippi and Michigan. Its Las Vegas properties include the MGM Grand and the Bellagio and Mirage hotels.
The deal would give Foxwoods access to MGM's database of more than 22 million customers and allow it to use MGM's partnerships with other companies to help attract new restaurants and top-tier entertainers to eastern Connecticut, Foxwoods CEO William Sherlock said.
While Foxwoods officials were excited about the prospects Tuesday, state officials say they want to know more about the structure of the deal because legal hurdles could arise.
Attorney General Richard Blumenthal and Paul A. Young, executive director of the Division of Special Revenue, sent the tribe a letter Tuesday asking for copies of any documents and agreements that concern the deal.
"If [MGM has] anything to do with the casino, there has to be intense and critical scrutiny," Blumenthal said. "We certainly make no assumptions that there are legal problems, but there are also in this area a lot of uncharted waters and a lot of unanswered questions."
Officials at Foxwoods were careful to note that the deal does not include the transfer of ownership to MGM Mirage, something they know would be of concern to the state.
"This is not an ownership question at all," Foxwoods spokesman Bruce MacDonald said. "This is largely a branding, a marketing, a licensing arrangement. It has absolutely nothing to do with ownership. It's a business arrangement."
Benedict called the deal the "ugly but inevitable outcome" of Indian gaming on land that is largely immune from federal and state oversight.
"The idea here was never to allow Las Vegas or any other non-Indian casinos to get a foothold in states that bar them from operating," Benedict said. "The fact of the matter is that MGM and Trump and all these other casinos are not supposed to be able to come into Connecticut. There's no way around that and I don't care how you dress it up."
Mac Turner, who serves on the board of the Connecticut Alliance Against Casino Expansion, said it appears "southeastern Connecticut is being written off as the corner of the state where casinos are going to flourish and be allowed without any complaint from anyone."
Foxwoods officials said it was too early to talk about details such as whether patrons would be able to use Foxwoods wampum points at MGM properties. But the relationship will give both companies new ways to cater to customers.
Brown said, for example, that MGM could tell a patron who regularly gambles in Las Vegas, "If you're ever in the New York or Boston area, we can set you up at Foxwoods."
"It gives you more toys to give the player to play with," Brown said. "You have more ways to entertain the customer, to cultivate him and give him a better experience."
He also noted that at MGM's higher-end properties in Las Vegas, customers spend twice as much money on entertainment and food and beverages than the industry average.
"They have more disposable income and they're more affluent people," he said. "So while Foxwoods caters to everyone, this is going to bring in existing players and it will bring in a certain level of new players, too."
Specifically, the announcement sets out a series of "ongoing relationships" between the two corporations, including: the development of the $700 million casino and resort to use the MGM Grand brand, under a long-term license agreement; the planning of future "destination gaming resorts" at Foxwoods; MGM's provision of technical advisory services to Foxwoods; and cross-marketing between the two corporations. Also, MGM would provide the tribe with a loan of up to $200 million to finance a portion of the tribe's investment in joint projects.
The Mashantuckets already have been seeking ways to take their brand beyond Connecticut.
They are planning a 600-acre resort and casino in the U.S. Virgin Islands; they are competing for a license to build a slots parlor on the Delaware River in Philadelphia; and they said Tuesday they plan to file notice this week of their intention to invest $400 million in a casino resort in Biloxi, Miss.
