Making the News

The Day, New London

Originally Published:Saturday, May 17, 2008

“Is it the perfect time to open? Who knows?” said Michael Pollock, managing director of the Spectrum Gaming Group, a consulting firm near Atlantic City. “But the opportunities that they have identified will outlast any short-term economic concerns.”

Pollock, the gaming consultant, said “the conventional wisdom has been turned on its head” in that those in the gaming industry, at one time, believed that “slots were the future,” but now younger people are gravitating toward table games.

In addition to attracting gamblers, diners and concert-goers, Pollock said MGM Grand has “the potential to have significant inroads in convention and meeting business.”

“It's a developing trend in gaming everywhere,” he said. “To have a convention venue, it gives (MGM Grand) a leg up over markets that don't have casinos.”


MGM Grand Hopes To Put The Glitz In Gaming

By Heather Allen
The Day, New London

If Foxwoods is a rum and coke, then MGM Grand at Foxwoods is a martini.

Everything at MGM Grand, from the bronze chandeliers to the restaurant decor, looks chic compared to the older, very teal, Foxwoods proper.

And that's the point.

Foxwoods is relying on the power of the MGM Grand brand - sophisticated styling and customer service - to attract a younger, more affluent clientele, setting it apart in the Northeast gaming market and establishing itself as a national resort and entertainment destination.

The glitzy $700 million project makes its grand entrance at a time when the economy is sagging, gaming revenues across the country are increasingly soft and unions continue to bang on the door of Foxwoods.

Both Foxwoods and the state's other tribally owned casino, Mohegan Sun, have experienced year-over-year declines in revenues attributed to the economy and increased gaming competition within the Northeast - especially in Rhode Island, New York and Pennsylvania.

It remains to be seen whether MGM and its iconic lion will allow the Mashantucket Pequot Tribe to roar back into the market, attracting new patrons, or if deflated consumer confidence will hamper the success of the project.

"Is it the perfect time to open? Who knows?" said Michael Pollock, managing director of the Spectrum Gaming Group, a consulting firm near Atlantic City. "But the opportunities that they have identified will outlast any short-term economic concerns."

And that seems to be the conventional wisdom among economists and gaming experts when it comes to MGM Grand at Foxwoods, which officially opened its doors to the public today.

MGM Grand's run at attracting younger, more affluent patrons includes its culinary offerings, which feature Craftsteak, award-winning chef Tom Colicchio's restaurant; chef Michael Schlow's Alta Strada; and New York's own Junior's Cheesecake.

The new property also features Shrine, an Asian-inspired restaurant and 20,000-square-foot nightclub.

"Truly, it's a place where you want to feel youthful," said Gillian Murphy, the senior vice president and general manager of MGM Grand at Foxwoods. "It's contemporary and edgy."

A higher concentration of table games is another feature built into the property with a younger audience in mind.

Pollock, the gaming consultant, said "the conventional wisdom has been turned on its head" in that those in the gaming industry, at one time, believed that "slots were the future," but now younger people are gravitating toward table games.

Murphy said she believes that if the approximately 2,000 employees of MGM Grand at Foxwoods are expected to give customers a high level of service, then management must provide a model.

While giving visitors a tour recently of the almost-ready building, Murphy walked briskly though the hallways and greeted every employee with a firm "el-lo" in her British accent. She went so far as bending down to make eye contact with employees who were on their hands and knees working on finishing details.

Employees throughout the building, from security guards to bartenders to the dealers on the floor, are expected to make eye contact and offer a salutation to visitors.

But even as employees greet their first customers today, union members have scheduled a rally at the entrance of MGM Grand at Foxwoods.

Poker and table-game dealers voted in favor of representation by the United Auto Workers last year and, since then, several unions have filed petitions seeking to do the same.

In addition to attracting gamblers, diners and concert-goers, Pollock said MGM Grand has "the potential to have significant inroads in convention and meeting business."

Foxwoods has been diversifying its business by focusing on conventions and meetings with 115,000 square feet of meeting and convention space, which includes a 50,000-square-foot ballroom, at MGM Grand.

"It's a developing trend in gaming everywhere," he said. "To have a convention venue, it gives (MGM Grand) a leg up over markets that don't have casinos."

But Foxwoods is not alone. The casino across the river, Mohegan Sun, is in the midst of a $925 million expansion project that emphasizes non-gaming amenities to create new customers.

"There's no doubt that is one thing that both these expansions will accomplish. It makes them individually - and certainly the area when you combine them - very, very compelling destinations," said Mitchell Etess, president and CEO of the Mohegan Tribal Gaming Authority. "And I think it's possible that one of the outcomes, of first the MGM, then Mohegan Sun expansions, would be additional people making Connecticut a destination than they have in the past."

But both of the state's tribally owned casinos will have to weather the current economic storm, which has caused slot revenues to slide for the past eight months.

"It's probably not the ideal time to be opening, primarily because of the economy, but on the other hand, one could argue it's better to enter at the bottom of the economy with the expectation that things will get better year over year," said Clyde Barrow, the director of the Center for Policy Analysis at the University of Massachusetts-Dartmouth. "You're already in a position and ready to go."

And both casinos have the staying power to ride out this rough economic patch and dominate the Northeast gaming market once the economy improves, said Arthur Wright, emeritus professor and former department chairman of economics at the University of Connecticut.

"Clearly, this is part of the long-term strategy that both of Connecticut's Indian-led casinos have pursued: building big and keeping it big," said Wright.

That will make it difficult and expensive for another casino to enter the Northeast gaming market.

"The higher they can make the entry barrier, the longer they can enjoy a local and regional monopoly," Wright said.

Which could, at least in theory, bode well for the state.

Both casinos have a revenue-sharing agreement with the state in which they pay 25 percent of net slot earnings each month.

"If this current slippage in volume is temporary, because of economic conditions ... then Connecticut can only benefit," Wright said.

The Connecticut Division of Special Revenue has projected that slot revenues will begin to slightly increase in the next fiscal year.

In fiscal year 2008-09, which begins on July 1, the casinos are projected to bring in $420 million, with $195 million from Foxwoods and $225 million from Mohegan Sun.

In 2009-10, the division expects about $422 million to flow into state coffers, with Foxwoods contributing $196 million and Mohegan Sun bringing in $226, said Paul Bernstein, spokesman for the division.

"As a citizen and a taxpayer, I wish them all the luck," Wright said.

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