Gambling

Can Steve Wynn Beat the Odds in Massachusetts?


A rendering of Wynn Resorts' proposed casino complex

A rendering of Wynn Resorts' proposed casino complex

Gaming magnate Steve Wynn doesn’t shy away from a fight. In Foxborough, Mass., the founder of Wynn Resorts (WYNN) has been battling hard to get a $1 billion casino built. He’s sent a video pitch, bought full-page newspaper ads, and sent canvassers door-to-door to persuade residents to support the project.

Wynn faces plenty of obstacles: Civic leaders won’t negotiate with him, an opposition group has attracted 1,200 members, and rival Caesars Entertainment (CZR) wants to build its own Boston-area casino. On April 16 a supporter of Wynn’s project was arrested for allegedly threatening the life of a town selectman, according to police. “I don’t think Steve Wynn anticipated the negative feeling in the community,” says Ray Poirier, executive editor of Gaming Today. “He’s got to turn the town around.”

Massachusetts Governor Deval Patrick signed legislation in November authorizing three casinos and a slot machine parlor in the commonwealth. The law divides the state into three regions, allowing one casino in each. The winning proposals will be picked by the Massachusetts Gaming Commission based in part on their potential economic contribution to the state. Before the commission can review an application, however, the operator must negotiate an agreement with the host community and win a local referendum. Licenses aren’t expected to be awarded until mid-2013.

The prize is the permit for the Boston region. With 4.5 million residents, it’s the 10th-largest metropolitan area in the U.S. Per capita income in Boston, at $31,856, is 16 percent above the national average. Clyde Barrow, a professor at the University of Massachusetts Dartmouth who studies the New England gambling market, figures a Boston-area casino could generate as much as $800 million in gaming revenue a year. (The state will be entitled to a 25 percent cut.)

Wynn identified Foxborough, a town of 17,300 that lies 30 miles south of Boston, as his site of choice last year. He wants to build the casino on land leased from New England Patriots owner Robert Kraft and adjacent to Gillette Stadium. Neither Wynn nor Kraft responded to requests for comment.

The Las Vegas billionaire shouldn’t be surprised that Foxborough’s residents are digging in their heels. The town twice rejected zoning changes that would have allowed gambling, in 2004 and 2011, says Paul Mortenson, a former selectman. In a December letter to government officials and Wynn, the board of selectmen said Foxborough did not want to pursue casino negotiations. Yet the balance could shift after elections on May 7 in which two of five seats are being contested. Two candidates oppose the casino and two favor negotiating with Wynn, according to Mortenson.

Residents are just as divided. Collin Earnst, a marketer at a software company, says he’s concerned about the effect the project will have on traffic and property values. “The zoning they applied for is the size of the Statue of Liberty,” says Earnst, who has joined the No Foxboro Casino group. Real estate agent Millie Cetrone, who supports the casino because it will bring in tax revenue, points out that the neighboring town of Walpole has a prison, “and the [property] values there are a lot higher than Foxborough.” She calls the decision “a no-brainer.”

Wynn claims the casino would create 4,000 permanent jobs and could generate as much as $15 million in revenue for schools and other public services. The billionaire has funded a grass-roots group called Jobs for Foxboro, which has organized three town meetings to drum up support.

Barrow questions whether Wynn has chosen the right locale. A casino north of Boston would have less competition and keep more dollars in Massachusetts in the event that New Hampshire legalizes gambling, he says.

Caesars, Wynn’s longtime rival, has teamed up with Suffolk Downs, a horse racing track in East Boston, to pursue its competing bid. On April 12, Boston Mayor Thomas Menino named an advisory panel to pursue a deal with the Caesars/Suffolk Downs group, a move he likened to firing the starting gun for the Boston Marathon. In a statement, Menino predicted the outcome of the race “could be the largest economic development game changer in Boston’s recent history.”

The bottom line: Residents of Foxborough, Mass., are resisting Wynn Resorts’ plan to build a casino that could generate $800 million a year.

Palmeri is a reporter for Bloomberg News and Bloomberg Businessweek in Los Angeles.

Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • WYNN
    (Wynn Resorts Ltd)
    • $181.58 USD
    • 1.71
    • 0.94%
  • CZR
    (Caesars Entertainment Corp)
    • $12.83 USD
    • 0.22
    • 1.71%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus