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Part 8: How Casinos Could Devastate Worcester Theaters

Thursday, February 23, 2012

 

Worcester may be out of the running for a mega casino, but a bevy of proposed wagering palaces are just close enough to the state’s second largest city to cause headaches for its bustling performance venues, theater directors say.

Managers of Worcester’s performance venues are hoping that defensive measures tucked into last fall’s casino bill will be enough to halt a potential onslaught in entertainment competition.

The concerns come as Las Vegas tycoon Steve Wynn pushes plans for a giant casino and entertainment complex in Foxborough to the east, while Mohegan Sun and MGM tout destination resort proposals just to the west of Worcester.

The proposed casinos are all encompassing, with plans for everything from hotels to restaurants and shops to entertainment, and, of course, thousands of slot machines and table games.

For Worcester’s performance venues, the main fear is that of one or more Massachusetts casinos competing for the same shows and acts – and throwing money around to lock them up.

“There are some people who want one, but nowhere close,” said Troy Siebels, executive director of the Hanover Theatre, of the prospects of casinos coming to Massachusetts. “I am in that camp – I’d prefer they be in the Berkshires or Boston – that far away.”

Boxed out of casino bidding

The rise of casino gambling comes as a crucial time for Worcester, which lost out on the chance to snag a giant casino project after what amounted to a case of gambling legislation gerrymandering.

The casino bill that passed last fall divides the state up into three zones, each with its own casino license. Worcester in early versions had been placed in the western zone, where it would have been a formidable competitor, going up against Springfield and Palmer.

Instead, in a move to keep a casino out of Worcester, lawmakers put the city in the eastern zone, where Boston’s Suffolk Downs enjoys a commanding lead in the competition for a casino license.

While city residents passed a nonbinding referendum in 2007 in favor of bringing in a casino, some influential city leaders have been less enthused.

“This is a city that has ten colleges,” said Roberta Schaefer, executive director of the Worcester Research Bureau. “I think most people see eds and meds as the future, not casino gambling.”

Casino show subsidies stir concern

But Worcester may still have to deal with the fallout from casino gambling nonetheless - and without the benefit of a big infusion of new tax revenue.

Proposals for mega casinos now popping up the outer suburbs of Boston, Worcester’s big performance venues – the DCU Center, the Hanover Theater and Mechanics Hall – are bracing for the impact.

The casino legislation was designed to spur construction of Foxwoods and Mohegan style mega casinos that would offer a full array of amenities, not just slots and tables.

And both Connecticut casinos have delved aggressively into the entertainment sector, building out performance venues and aggressively courting a wide range of musical acts to keep the gamblers coming in.

The casinos will pay a premium – as much as 50 percent more – to lock up popular acts, while subsidizing the tickets as well.

A Denis Leary show might cost $20 at one of the Connecticut casinos and twice that at the Hanover, Siebels notes.

Moreover, such popular acts are often prevented, under their contracts with the casinos, from appearing anywhere else within a hundred miles, knocking the Hanover completely out of the competition.

“We can’t compete with that,” Siebels said.

New competition too close for comfort

Meanwhile, concern is the Bay State’s newly minted casinos, as they scramble to attract gamblers, will also go aggressively into the entertainment sector, to the detriment of performance venues in Worcester and elsewhere.

The fear, Kennedy said, is that the new casinos will corner acts and draw away some of the audience that now patronizes Worcester’s performance venues.

“You want to make sure there is a level playing field,” Kennedy said. “The casinos often use entertainment as a loss leader. They feed them well, they entertain them well and they hope they will gamble, because that is where they make their money.”

Kennedy notes the bill does build in protections. Casinos that open in the Bay State won’t be able to build any performance venues that range in size between 500 to 3,500 seats. That, in theory, should protect mid-range size theaters like Mechanics Hall and Hanover.

There are also plans for a $2 million to $3 million a year fund to help out performance venues facing new casino competition, with the money coming directly from the state’s gambling take.

The new Massachusetts Gaming Commission would also have the power to designate a theater as “impacted” and force the casino into negotiations with it. The end result, in turn, could be everything from a joint marketing plan and coordination when it comes to booking shows to outright payments.

“There are lots of people coming to downtown Worcester because of Mechanics Hall, the Hanover Theater and the DCU,” Kennedy said. “The bill is the best possible deal we are going to get. Now I think we are all going to wait and see what happens.”

“Casinos are a big unknown for everyone,” he said.

 

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