Mohegan Sun on Thursday signed a $16 million annual deal with Palmer to host a casino in the Massachusetts town, according to the agreement.
The agreement from the Uncasville gaming operator in essence compensates Palmer for the expanded services it would need to provide in order to host the planned $1 billion casino that includes two hotels, a waterpark, and a shopping mall. The extra services includes fire and police departments, economic development, water and sewer, and roadways.
The deal details a $15.2 million annual payment plus a portion of the gaming revenues from the property, bringing the total to $18 to $20 million annually, depending on the success of the project. Mohegan also will provide a one-time payment of $2.9 million to Palmer in the first year.
The host community agreement is a required part of Mohegan’s attempt to win a gaming license in Massachusetts. The casino also must win a town-wide referendum before the selection process is scheduled to begin.
Mohegan is competing with MGM Grand in Springfield and Hard Rock in West Springfield for the sole Western Massachusetts license. A similar competition is playing out in the eastern half of the state, where Foxwoods Resort Casino in Mashantucket is vying for a license.
