Wednesday, August 17, 2011

The Pay for 2 Get 1 Deal

I've heard of Buy 1, Get 1 Free. I've even heard of Buy 2, Get 1 Free. But would anyone ever seriously consider paying for 2, and only getting half of what you paid for? That's what any prospective slots deal in Massachusetts is looking to become.
For the Mashantuckets, the effect will be higher rates for any further borrowings, he said, probably crimping Foxwoods' ability to expand anytime in the near future. 
"We probably won't see them in our lifetimes return to the status where they'd be considered any kind of prime asset," Lanza said. 
For Mohegan Sun, which also has been looking to refinance some of its $1.6 billion in debt, there may be an opposite effect, he said, as the Mohegans point to the low rates given to the Mashantuckets in an attempt to gain favorable financing terms. 
And for the proposed expansion of casino gambling in other states, the effect of the restructuring may be to scare investors away, he said, thereby eliminating some of the potential competition that both Mohegan Sun and Foxwoods might otherwise have expected. 
"The pots are getting smaller in the poker game, and it's costing more for a seat at the table," Lanza said.
First we were going to get "world class" resort casinos, now? Not so much. Remember when Mohegan Sun bought land in Palmer, saying they were going to build a mega resort casino, the Mohegan of the West(ern Mass)? Well, that nice 5,000 seat theater just got swapped out for a 39x39 multipurpose room in the most recent plans, perfect for your next high school reunion. WINNING!

The Governor said he'd agree with the Speaker on a single, competitively bid racino or slot parlor to get a "deal" done, but it's looking more and more likely the slot barn variety of gambling is all he has left. Trying to field three "resort" casinos in this economy, with this much saturation of the market and with the enemic condition of the actual resorts in Connecticut would be a big joke, were it not for the fact that the joke would be on us.

Slot parlors are the only thing with a low enough cost margin to be viable here -- with little to no investment, economic multiplier or net job growth for the region, and that stay in business purely by preying off the poor. It's not clear that any bigger casino effort could even get the financing to build here. In fact, given what's going on in nearby Connecticut, it's pretty clear that it couldn't.

Even the well-funded lobbyist machine up at Suffolk Downs are only looking to build a glorified slot barn for their race track, geared toward shuttling in the easy prey all along the Blue Line. With a no-frills facility, they'll make money -- at the cost of our small business community, college students who are at greater risk of falling prey and what little the working poor in the area have left -- and Massachusetts will get less than half of what we were promised, and not nearly enough to cover all the costs associated problem gambling, traffic or what our local small businesses will lose out in the net-sum game that is our wallets.

With the Speaker trying to reward his district friends at Suffolk and Wonderland, he's not going to listen to that kind of sanity. So, what we get is all or nothing. If a deal is passed, we'll be sold a bill of goods and get half of what we paid for. Maybe enough people on Beacon Hill have realized that, and that's why I'm not hearing as much about it anymore?


Anyway, for a bloggy bonus, here's a great clip from the wonderful movie Contact that this 2:1 "deal" reminded me about.

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