Connecticut could lose as much as $68.3 million a year in revenue starting in fiscal 2019, once MGM Springfield casino opens, according to an estimate from the state’s Office of Fiscal Analysis.
OFA revenue analyst Christopher Wetzel reported the information online Friday, basing it on the April 29, 2016 consensus revenue forecast and the projected opening of the Massachusetts casino in the fall of 2018.
In the spring of 2015, the Massachusetts casino was expected to cost Connecticut $63.5 million in lost tax revenue in fiscal year 2018, according to the OFA at the time.
In mid-September, the Mashantucket Pequot and Mohegan tribes reopened their request for proposals for a third Connecticut casino site with a new deadline of Oct. 15. MMCT, the Mohegan-Mashantucket Pequot joint venture, is authorized by the legislature to seek a site.
“We are fully aware of the negative impact MGM’s facility will have on both jobs and revenue,” MMCT said in a statement emailed to the media. “A hit like this to the state’s bottom line will lead to more cuts to essential social services, and more tough choices for our state leaders. We need to get this right, and make sure that losses of this magnitude never come to fruition.”
MMCT did not elaborate on questions about the timing of the selection and building process for Connecticut’s new site.
In August, Fitch Ratings said it favorably viewed MGM’s development pipeline, which includes the opening of a $1.3-billion MGM National Harbor near Washington, D.C., in December and the $865-million MGM Springfield. At the time, Fitch questioned the return on investment for the Springfield casino, however, because of the Connecticut tribes’ efforts to build a casino in the Greater Hartford region, saying a third Connecticut casino has the potential to siphon off customers from MGM.
In a statement, Alan Feldman, executive vice president of MGM Resorts International reiterated that, “if Connecticut wants to maximize job creation and revenue for the state, it needs to open up the process so that it is fair, transparent, and competitive. At least one economic report has suggested that a casino in southwestern Connecticut has the potential to generate many more jobs and far more revenue than the number contained in this OFA report.”
It is unclear who solicited the new update. OFA Director Neil Ayers declined comment.
