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MGM Unveils $800 Million Entertainment Proposal, Intensifying Competition for Sole Casino in Western Massachusetts

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Mohegan Sun—previously the leader in the pack—is now up against industry titans for a chance to build the one casino the state will allow in Western Massachusetts, reported The Day.

Gov. Deval Patrick signed a bill November 22, 2011 allowing up to three regional casino licenses and one slots parlor in the state. At least one of the three casino licenses was slated for a federally recognized tribe—and officially awarded to the Cape Cod-based Mashpee Wampanoag with the July 30 signing of the tribal-state compact. The tribe intends to build a $500 million destination resort casino in Taunton, the southeastern part of the state.

The Mohegan Tribe of Connecticut is hoping to win one of the remaining two licenses to operate a commercial casino in Palmer in Western Massachusetts, modeled on its successful Mohegan Sun in Uncasville, Connecticut. State gaming law requires local communities to pass a binging referendum to permit a casino in their city; the Mohegan Tribal Gaming Authority (MTGA) is currently negotiating the host community agreement.

While the MTGA's proposal has long been on the planning table, competition is heating up for the sole casino permitted in Western Massachusetts, especially with an industry heavyweight's recent announcement.

On August 22 at the MassMutual Convention Center, MGM Resorts International unveiled plans for its $800 million entertainment complex on 10 downtown Springfield acres, reported Massachusett's The developer has promised MGM Springfield—the corporation's name for the project—will not only provide 3,000 much needed jobs but also economically revitalize the area that was damaged last year by a tornado.

Other contenders include Las Vegas-based Ameristar Casinos, which in January purchased the former industrial Westinghouse site off Interstate 91 in Springfield for $16 million, Hard Rock International of Orlando, Florida—owned by the Seminole Tribe of Florida—which partnered with Paper City Development to pursue a Springfield casino license, and Penn National Gaming of Wyomissing, Pennsylvania, which is reportedly eyeing Springfield as well, reported and the Associated Press.

MGM Chairman and CEO Jim Murren has said he welcomes “robust competition” for the Western Massachusetts casino license.

If MGM gets the green light, it intends to "recapture" 30 to 40 percent of the Commonwealth's gaming market that commutes to play in neighboring Connecticut—namely at Mohegan Sun and Foxwoods Resort Casino—as well as New York and Rhode Island's gaming facilities, said Bill Hornbuckle, MGM's chief marketing officer and president of MGM Springfield.

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"If we can't do that, we can't make this work," Hornbuckle said in announcing the proposal, noting the company's $400,000 nonrefundable application fee to the Massachusetts Gaming Commission is in the works.

MGM Springfield's 10-acre entertainment complex would include a 25-story, 250-room hotel, and an entertainment district with 25 dining and retail outlets, a 12-screen cinema, a bowling alley, an outdoor stage and gaming. The outdoor model is designed to foster partnerships with existing facilities and promote tourism to the area.

MGM also noted that the company would have to examine ts relationship with Foxwoods. The casino owned by the Mashantucket Pequot Nation branded its second Ledyard, Massachusetts-based casino "MGM Grand at Foxwoods," adorned with MGM's lion's head logo at the helm of the tower. The freestanding casino opened in 2008.

In 2006, MGM, then known as MGM Mirage, formed a "strategic alliance" with the Mashantucket Pequot Tribe, the owner and operator of Foxwoods, agreeing to collaborate on off-reservation casino projects. MGM lent Foxwoods Development Co. $200 million, but ultimately, no projects were conceived.

"I haven't sat down with Scott [Butera, Foxwoods CEO] yet," Murren told The Day. "That's something we'll have to talk about, especially if we get the license."

Butera told The Day on August 22 that Foxwoods understands MGM's concerns. "If they thought it was a problem, I'm sure we could work something out on a friendly basis," Butera said. "Right now, no change has been planned. It's working well."

In late August, gaming executives vying for a Springfield casino are expected to meet with city officials concerning the vetting process, Hornbuckle told The Day. Once Springfield officials decide which proposal to stand behind, that applicant will pursue a host community agreement with the city.

Mitchell Etess, CEO of the MTGA, acknowledged to The Day in a phone interview that MGM is known for proposing large-scale developments, and underscored why the Mohegan Tribe's Palmer proposal is best suited for Western Massachusetts. "We know this market very well," Etess told the newspaper. "We know what's appropriate to drive the right amount of revenue for the commonwealth. We have a great sense of the region. We think our location brings an awful lot to the table."