|By Ralph Ranalli, The Boston Globe|
Knight Ridder/Tribune Business News
Feb. 2, 2005 - Foxwoods, the world's largest casino complex, which draws some 14 million visitors a year, is planning a $700 million expansion to meet a hard-charging challenge from its nearby competitor, Mohegan Sun, and gambling industry analysts also see the move as a preemptive strike against potential future competition from Massachusetts and Rhode Island.
The project, approved by Mashantucket Pequot tribe members in a referendum Monday, will add 2 million square feet to the complex. The expansion, expected to be completed by 2008, will include a 825-room hotel, a new casino, a 5,000-seat concert theater, six nightclubs and restaurants, and a 21,000-square-foot luxury spa. William Sherlock, Foxwoods president and chief executive officer, also said that with the expansion, the casino will increase marketing to blacks, Hispanics, and Asians. For example, bookings and menus in the restaurants will be designed to attract different ethnic groups, he said.
"If you look at the demographics of New England's growth pattern, that's where you see the highest percentage of growth," he said.
The expansion is occurring on the heels of a $300 million project that included a casino, a Hard Rock Cafe, and a shop this fall, and two lakeside golf courses that are scheduled to open this spring.
The move, casino executives and industry analysts said, is aimed at accelerating Foxwoods' transition from a regional gambling mecca to an international convention and destination resort.
"It's definitely another step in that direction," Sherlock said yesterday. "We are not minimizing the gaming, but we believe that the other amenities around it are a key to penetrating the market."
Analysts said the Foxwoods expansion is in part a response to the rapid growth of Mohegan Sun, which has a 10,000-seat arena and more upscale restaurants and themed areas, and which has done a better job adding other sources of revenue to complement its gaming income.
But both Sherlock and the analysts said the expansion is also aimed at fending off potential local competition from two states where political opposition to gambling is perceived as eroding.
"It is certainly preemptive," said the Rev. Richard McGowan, an economics professor and gaming industry analyst at Boston College. "They are trying to beat back any potential challenge."
In Massachusetts, the departure last year of House Speaker Thomas M. Finneran, a staunch gambling opponent, has left racetrack owners and gaming executives more hopeful for legalized slot machines, and perhaps eventually, Indian casinos, analysts said.
Lawmakers on both sides of the issue said yesterday that they believe that with Finneran gone, proposals to allow video slot machines at state racetracks will be closely contested.
"I would say it's probably a close vote in the House," said Representative Thomas O'Brien, a Kingston Democrat who is opposed to legalized gambling. "Clearly, it is an issue we're going to be taking up."
Representative James B. Leary, a Worcester Democrat who said he would back racetrack slots and even an Indian casino if he saw that negative social impacts could be addressed, said the state's lingering financial woes dictate that the Legislature must consider any potential revenue source. "If we can address the local impact issue and if there is a solid return for the state, then it is something worth considering," he said.
The possibility of racetrack slots in Massachusetts, meanwhile, has been used by some Rhode Island lawmakers to fuel a renewed push for a full-fledged Indian casino resort. Rhode Island has already allowed two video slot machine parlors at the Lincoln Park dog track and the Newport Grand jai alai complex.
Overriding Governor Donald L. Carcieri's veto, Rhode Island lawmakers last year approved a ballot question to allow gaming giant Harrah's Entertainment to build a casino complex in West Warwick in partnership with the Narragansett Indians.
The referendum was canceled after the Rhode Island Supreme Court declared that the ballot question violated a provision in the state constitution that bans all "lotteries" except those operated by the state, but pro-gaming lawmakers say they believe they can rewrite the legislation and again put it in front of voters.
Clyde Barrow, a University of Massachusetts at Dartmouth professor who has published studies stating that Massachusetts residents spend $800 million annually at Foxwoods and Mohegan Sun, said that even as they expand their markets, both casinos seek to protect their status as the dominant New England gaming powers.
"Studies have shown that, given the option between comparable facilities, gamblers will choose to go to the closer one," he said.
Information from the Associated Press was used in this article.
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