Connecticut tribal casino closures sting rural area
The Associated Press
NORWICH, Conn. (AP) — Unemployment in eastern Connecticut is soaring, despite relatively few cases of COVID-19 in the region, largely because the pandemic forced two giant casinos to suspend operations.
The closures of Mohegan Sun and the Foxwoods Resort Casino, among the world's largest, have sent economic ripples toward local vendors, which have had to close or cut staffing. The casinos themselves have furloughed roughly 10,000 workers.
“The first thing is, like, the rent and food. That’s where the stimulus package and everything else is going. Just maintain. You don’t have anything for extras and stuff. You hope the car don’t break down,” said John Delmonte, a former craps dealer and now president of the union local that represents table dealers at Foxwoods.
And when they don't get paid, he doesn't get paid.
“More or less right now, we’re at the point of getting by with the necessities,” said Delmonte, who gave credit to the Native American tribes that own and operate the casinos for maintaining their workers' health insurance. On Friday evening, however, NBC Connecticut reported that Foxwoods officials announced they could no longer sustain those benefits and would lay off workers on May 31.
Neither casino has closed since they opened in the late 1990s, and Delmonte lauded the difficult decision the tribes had to make. The closures may be wreaking economic damage, he said, but they probably saved the region from a direct hit by the virus.
Nearby Rhode Island, Massachusetts and New York, which along with the rest of Connecticut send the casinos many customers, have among the nation's most virus cases and deaths.
“I'm very grateful,” Delmonte said. “Because if you think about it and we stayed open, where are people going to go but there, you know?”
Still, frustrations abound in a largely rural area where the pandemic is not as visible as in more-populous counties closer to New York. In Norwich, a city of 39,000 near the two casinos, there have been just 58 confirmed coronavirus infections and two deaths, out of over 32,400 confirmed cases and nearly 2,900 deaths statewide.
The economic calamity is underappreciated in the rest of the state, where more people can work from home, said Rodney Butler, chairman of the Mashantucket Pequot Tribal Nation, which owns Foxwoods.
“I wish that we had the opportunity for our employees to work from home and work remotely ... but that’s just not the reality in this industry," he said.
State data from March, the most recent available, showed the leisure and hospitality industry led employment declines that month.
The casinos themselves are also taking a large financial hit.
“It’s millions per week, and it’s just straight cash burn," Butler said.
Jeff Hamilton, president of Mohegan Sun, said he doesn't have a firm figure on losses but called the absence of revenue “significant.”
The state has not set a restart date for casinos, which are not among the businesses it is allowing to reopen May 20.
Hamilton and Butler both sit on the governor's economic reopening committee. The casinos are following the guidance of health experts, and skeleton crews are studying how to reduce risks when gambling restarts, they said.
The labor market encompassing Norwich and New London, Connecticut, and Westerly, Rhode Island — essentially southeastern Connecticut — shed 129,000 jobs in March, state data shows, ranking third in job losses out of six.
During a single week in mid-March, more than 3,700 people applied for unemployment benefits in Norwich, the highest one-week figure in the state.
And the region is still feeling some effects of the Great Recession of 2007-2009.
Another major employer, submarine builder Electric Boat, has stayed open and made recent hires. But the casinos also have contracts with more than 2,000 vendors apiece, many of them local and dependent on gambling floors keeping the lights on.
James Ridenour, owner of Riddys Tire Service in Norwich, said that even though he has a business that’s allowed to operate during the pandemic, things have still been slow.
Besides losing the $5,000 a month he makes selling tires to Mohegan Sun for its vehicles, customers worry about spending money at a delicate time, and if they buy at all go for the cheapest options, he said.
He had to lay off two of his six employees.
“Normally right now we’d actually be pretty busy, just because we’re going into the springtime months here,” he said. “Normally my parking lot’s full. And I’m empty.”
The waves are rocking municipal budgets, as well.
One commercial laundry company in Norwich that serves the casinos has closed temporarily, and therefore is no longer buying 100,000 gallons of water daily from Norwich’s municipal utility. State Sen. Cathy Osten, whose district includes Norwich, said that has led to a $137,000 a month drop in revenue, when coupled with the electricity the company is no longer purchasing. Additionally, Mohegan Sun is not spending nearly $89,000 a month on water. Ten percent of the utility's profits go toward the city's budget.
“This is why I have said all along that the two tribes together are important to all of us in this area,” said Osten, who wants Gov. Ned Lamont to sign an executive order authorizing the tribes to have internet gambling to help them generate some revenue.
Robert Bell, who owns a property management company in Norwich and relies on casino patrons for short-term rentals, believes it’s time for gambling to return.
Helping with a weekly food drive has given him a clear view of the shutdown's financial toll, he said.
“We really just need to reopen it, reopen the economy now. We know how to take safety precautions. We can do that,” said Bell, a Republican candidate for state representative. ”I know that might be an unpopular opinion with a lot of people."