|By Scott Mayerowitz, Providence Journal, R.I.|
Knight Ridder/Tribune Business News
Jun. 8, 2004 - Foxwoods, the world's largest casino, is getting even bigger.
As Rhode Island lawmakers consider allowing a casino here, Foxwoods, in nearby Connecticut, is pumping $300 million into a renovation and expansion project: adding slot machines, restaurants, retail stores and thousands of extra parking spaces to its sprawling complex.
But what effect -- if any -- the expansion will have on the $600-million casino proposed by Harrah's Entertainment and the Narragansett Indians is unclear.
Foxwoods' expansion has not come up once during this year's casino debate even though Harrah's says its own "Foxwoods-style" casino -- right off the highway in West Warwick -- would intercept gamblers traveling to Connecticut.
"It's an example of how Harrah's is trying to make all of its projections as rosy as possible," said Lincoln Park spokesman Michael F. Trainor.
"Clearly an expansion at Foxwoods would decrease the amount of available market share that Harrah's assumes it's going to capture."
But casino supporters, such as Senate Finance Committee Chairman Stephen D. Alves, say that Harrah's would not spend $600 million if it could not compete with Foxwoods.
"Harrah's has been in the business a long time," said Alves, D-West Warwick. "They're a multibillion-dollar corporation, and they feel as though they'll spend whatever dollars it takes to compete with them."
Jan L. Jones, a Harrah's senior vice president, said "there is a tremendous amount of unmet demand that exists in the New England market."
Echoing those comments, when House Finance Committee Chairman Steven M.
Costantino was asked about Foxwoods' expansion, he said it shows him that this is "an underserved market."
However, Costantino, D-Providence, noted that the project could create "even more of an enticement to people north of us to ride right by Rhode Island and go to Foxwoods."
Foxwoods is already the largest casino in the world when comparing gambling space and the number of slot machines and table games, according to Foxwoods spokesman Bruce MacDonald.
Last summer, the casino started a $300-million capital improvement project that includes $99 million for expansion, MacDonald said. Besides adding Italian marble floors and other improvements, there will be more stores, 2,100 additional parking spaces, new dining facilities -- including a Hard Rock Cafe and a Ben & Jerry's ice cream -- and more gambling space. The first phase of the expansion is expected to open in August, MacDonald said.
In addition to the $300-million project, Foxwoods is also building two nearby 18-hole golf courses, featuring a 50,000-square-foot clubhouse and eight luxury villas, MacDonald said.
This latest expansion is one of several that Foxwoods has undergone since its 1992 opening.
It also comes on the heels of a $1-billion expansion at Mohegan Sun, which almost doubled the gambling space, added dozens of stores and high-end restaurants, a 1,200-room hotel, an indoor mountain under a planetarium dome, a 10,000-seat arena and an 85-foot waterfall.
The expansion also pushed Mohegan Sun's revenues through the roof. While Foxwoods is still larger, Mohegan Sun since October has been taking in more slot revenue than its neighbor on a monthly basis, according to data from the Connecticut Division of Special Revenue.
Mohegan Sun had $70.5 million in slot revenue in April compared with the $63.9 million at Foxwoods. This was despite the fact that Mohegan Sun had 400 fewer slot machines than Foxwoods.
There have been hours of testimony -- and thousands of pages of accompanying economic analyses -- presented to legislative committees this year. Nowhere was there discussion of growth in Connecticut.
Clyde W. Barrow, a University of Massachusetts-Dartmouth professor who did a $34,700 report for the Senate, said he did not include Foxwoods expansion because it is not completed.
"I don't think it would siphon away," Barrow said. "Obviously it makes the market more competitive, but we thought there's enough unmet demand as well as growth in the market."
Harrah's has been selling its proposal as a "destination-style casino" that will be able to compete with the two giant Connecticut casinos.
But at least from the standpoint of size, Foxwoods and Mohegan Sun will dwarf the Harrah's facility.
Few details of Harrah's proposal are available -- and many figures have changed in recent months, but from the information provided to date, the West Warwick casino would be about a third the size of Foxwoods, and have five places to eat, compared to 36 at Foxwoods.
Harrah's is proposing 3,000 square feet of retail space, while Mohegan Sun has 130,000 square feet.
While Harrah's calls its facility "a resort-destination casino," Newport Grand CEO Diane S. Hurley said that "it's not on the same terms whatsoever with what Mohegan is, what Foxwoods is and is becoming. Given the constraints of the acreage, I don't see how they could ever create that same environment."
Jones, however, says there is plenty of room on the approximately 60-acre site -- about a third the land that either Connecticut casino has -- for expansion.
"With the space that's available, there's enough room for a whole second build-out," she said. "You could do phase two of the casino, built to the demand."
For instance, Jones said, there is space for a second hotel tower, with another 500 rooms.
"We've scaled the project to what the legislature seems to be looking for.
You can always build a bigger project but that's really their determination," Jones added. "If the legislators, moving forward, would like to scale the project up, we'd always be willing to look at that."
Guy Dufault, longtime lobbyist for the Narragansetts, said, "It's always difficult to take people away from an existing facility . . . because there is customer loyalty."
But, he said, with a comparable facility closer to home, patrons will choose Harrah's.
When asked if a facility one-third the size of Foxwoods is "comparable," Dufault said: "None of these people built billion-dollar facilities right out of the box. You have to be prudent, you have to know the marketplace."
He said there are other things to compare besides square footage, such as the space between slot machines and the type of machines installed.
But many aspects of the proposed casino are still not clear.
Harrah's says it will have five "food and beverage outlets." Mohegan Sun has 30 and Foxwoods will have 36 after its expansion. Jones says those numbers are deceiving because the Connecticut casinos are counting each stand in their food courts as individual facilities.
Harrah's will have four restaurants and one buffet -- all sit-down facilities -- Jones said yesterday. But that statement differs from what was said in a Senate-commissioned report, based on Harrah's information.
That report said one of the five outlets would be an ice cream parlor.
Jones said yesterday that she did not know where that information came from, but said it was not true.
Another change in Harrah's plans is the number of parking spaces: from 4,500 in March to 5,250 last month.
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