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Casino Series Part 5: Where Developers Are Looking For Land

Monday, February 20, 2012

 

Boxed out of the high-stakes competition for a billion-dollar resort casino, Central Massachusetts may wind up with a consolation prize of sorts.

A range of would-be gambling developers, including the concessions and gaming empire that owns the Boston Bruins, are scouring potential sites in the Worcester area and across Massachusetts for land to build a slot hall on.

While public attention has been focused on the budding competition for the state’s three resort casino licenses, there may be as much if not more interest on part of the gambling industry in the smaller slot parlor license, industry experts say.

The slot license may only come with 1,250 machines and no table games, but it is seen as a way to break into a market where a few big players have spent years lining up local and state political support for the three casino licenses.

“There is a belief the slot parlor license is wide open,” said David Nunes, the developer behind a proposal to build a full-scale casino off I-495 in Milford.

Bruins owner joins the hunt

Delaware North may be the most surprising contestant in the slot parlor sweepstakes.

The Buffalo-based concessions empire, run by multi-billionaire Jeremy Jacobs, has scouted out potential sites in both Central Massachusetts and the Merrimack Valley, according to industry executives.

Delaware North is best known locally as owner of the Boston Bruins and the TD Garden, but it also oversees a gaming empire that includes thousands of racetrack slots in the Empire State.

Vincent Iuliano, who controls hundreds of acres of land abutting the Charlton service stop on the Massachusetts Turnpike, said he has  received inquiries from Delaware North.

The interest by Delaware North is a break from past practice, in which the concessions and sports giant, despite having gambling interests elsewhere in the country, has stayed clear of pushing any plans for Massachusetts.

Still, there have been signs that Delaware North was starting to take interest in the budding Bay State gambling market, with the company having shelled out money for casino lobbyists over the past few years the debate over expanded gambling heated up.

Consolation prize for Central Mass?

Iuliano said he has also had interest from Hard Rock and from Churchill Downs, the Kentucky racetrack owner, among other suitors.

However, all are interested in building a slot parlor, not a casino, because his land, even though it is in Central Massachusetts, falls within the eastern licensing zone, he said.

In strange geographic twist, Worcester and a big chunk of the center of the state was lumped into the eastern/Boston zone in the casino bill that passed last fall.

With Suffolk Downs perceived as having a major edge in the competition for the eastern casino license, putting

Worcester in the eastern zone was a ploy, according to one lawmaker, to keep a casino out of the city.

However, while this casino gerrymandering may have closed the door to a Worcester area casino, it may have left enough room for a slot parlor developer to slip in.

Iuliano contends the developers he is talking to reason a slot parlor could get them in the eastern zone without having to go head to head with Suffolk.

“If it wasn’t for zones we would have a casino today,” contends Iuliano, who argues he is perfectly positioned to siphon off gamblers heading south to Connecticut’s two tribal casinos. “We are the best location.”

“I have four people currently looking at it,” he said, noting the interest is exclusively for a slot parlor, not a casino. “If you are on the road to the Connecticut casinos, you go past me.”

Still, hasn’t stopped a few Central Massachusetts landowners from pitching their sites as potential casino building pads.

An Uxbridge landowner has seen preliminary interest by Las Vegas-based Boyd Gaming while the owner of several hundred acres of farmland on the Auburn/Oxford line has also said he’s interested in selling to a casino developer.

But some are skeptical of their chances.

“I think what you are seeing is everyone with 150 acres is trying to get into the game,” said Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth.

Moreover, a slot parlor could prove to be a poor substitute for a full-fledged resort casino of the type being pitched by developers at Boston’s Suffolk Downs or across from the Patriots stadium in Foxborough, Barrow said.

Slot parlors support roughly three jobs per $1 million in revenue, compared to seven to ten jobs for every million generated at a full-scale casino.

That’s the difference between a few hundred jobs and thousands, he said.

There is also little spinoff in terms of supporting local businesses, with even a motel hard to find around some slot complexes in Upstate New York, Barrow said.

“I don’t know of any place you can look at in the country where a slot parlor has been a significant economic development driver,” he said.

 
To the west, east and southeast, casino proposals bloom 

Photo of Mohegan Sun: Wikimedia grendelkhan

Yet by contrast, just a few miles away in what is the western license zone, developers are looking at full-scale casinos, not slot parlors.

 Mohegan Sun has pitched plans for a major casino in Palmer and MGM is gearing up to pitch its own casino plan in Brimfield. In Springfield, Ameristar is putting together its own casino proposal.

To the east in Boston and its suburbs, Suffolk Downs, backed by Caesars Entertainment is gearing up for a showdown with Steve Wynn, who has teamed up with Patriots owner Robert Kraft on a $1 billion casino proposal for Foxboro. Out along I-495 in Milford, Nunes is working on his own casino plans with Las Vegas-based Warner Gaming.

The wild card in the eastern region is Sheldon Adelson, the casino tycoon who grew up in Dorchester and who runs another global gambling empire, the Las Vegas Sands.

When Patrick first unveiled his casino proposal in 2007, Adelson had eyed plans for a resort casino in Marlborough. But since then Adelson has made big investments in Asia and is now pursuing plans for a mega casino in Florida.

Meanwhile, in Southern Massachusetts, the third casino license zone, the Mashpee Wampanoag tribe could secure a monopoly if it is able to nail down a site and ink a deal with the Patrick Administration by mid-summer.

Backed by Asian casino giant Genting, the tribe has been spotted looking at land in Plymouth, among other locales.

Still, finding a town that will welcome a gambling project could be a challenge, though more in Eastern Massachusetts and its relatively well off suburbs than in Central and Western Massachusetts.

“To find a community that would accept a casino, it pares down pretty quickly,” said David Begelfer, chief executive of NAIOP Massachusetts, which represents commercial developers across the state. “It’s pretty tough.”

 

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