Foxwoods, MGM Grand to join in casino ventures
Foxwoods and MGM Grand, two of the biggest names in the casino business joined forces yesterday to develop gambling ventures around the globe and market a $700 million hotel-casino complex under construction in Connecticut.
The deal gives Las Vegas's MGM Grand access to the Northeast market and Indian gaming, and provides an experienced partner for the Mashantucket Pequot tribe as it tries to diversify its operations in the face of rising competition here in New England. Under terms released yesterday, the Pequots will license the MGM Grand name for the new resort the tribe is building adjacent to its existing facility in Connecticut. The complex, expected to feature a hotel, casino, 5,000-seat concert theater, spa, and nightclubs, is expected to open in 2008 and be operated by the tribe.
MGM Grand and Foxwoods also said they expect to jointly develop gaming and nongaming operations and share data for marketing purposes on the millions of gamblers who visit their respective properties. MGM Grand said it would provide a loan of up to $200 million to finance the gambling projects.
Richard McGowan, associate professor at the Carroll School of Management at Boston College, said the deal is a reflection of the rapidly consolidating gambling business. ''It's exactly like the airlines forming alliances. You've got to build alliances to get customers to come to your casinos,” McGowan said.
McGowan said Foxwoods already faces intense competition from the Mohegan Sun casino in Connecticut and may face a powerful new rival if Harrah's, the nation's leading casino operator, succeeds in winning approval for a casino it is trying to build in Rhode Island with the Narragansett Indian Tribe.
The Massachusetts House earlier this month rejected a bill to allow 2,000 slot machines at the state's dog and horse tracks. ''They don't want to put all their eggs in one casino in one location,” said BC's McGowan. Mitchell G. Etess, the chief executive of Mohegan Sun, declined to comment on his competitor's moves. ''Certainly this is an interesting development, and it pays tribute to the strength of this gaming market,” he said.