Foxwoods Looks to Expand Its Empire

In less than two decades, Connecticut’s Foxwoods Resort Casino has blossomed from a modest bingo hall to the world’s largest casino resort.  Now the Mashantucket Pequot Tribal Nation, owners of Foxwood, is looking to expand.  This may come in the form of a slots parlor in Philadelphia on the Delaware riverfront.

On Wednesday, confirming the yearlong rumor that they were planning to build a slot parlor in the state of Pennsylvania, Foxwoods Development Co. filed an application with the Pennsylvania Gaming Control Board, joining the current race for one of their limited gambling licenses.   

Foxwoods has set their eyes on a very desirable 16-acre lot on South Columbus Boulevard, between Tasker and Reed Streets.  The location has been fingered as a likely gambling center since the early 1990’s. 

The Gaming Control Board plans to release its list of bidders in early January of next year.  For now the list remains confidential, however, between 20 and 30 groups are believed to be competing for the 14 available licenses. 

Foxwoods’ president and CEO, Bill Sherlock, has an optimistic view about a slots parlor in Pennsylvania, “The Pennsylvania and southern New Jersey markets are much like our friends and patrons back home in the Northeast - great household incomes and strong population numbers, with folks near you already attuned to the significant Atlantic City market.”

Foxwoods is only one of five companies vying for the two available licenses in Philadelphia.  Competitors include Chicago’s Sugar House Gaming, Las Vegas’ Pinnacle Entertainment Inc., Trump Entertainment Inc., and Planet Hollywood.

Industry observers can only speculate, but the billion-dollar Foxwoods Resort is believed to be one of the most profitable casinos in the business.  The Mashantucket Pequot Tribal Nation is not required to report their earnings like publicly traded casinos. 

With an impressive count of 7,400 slot machines, the Foxwoods Resort has the most machines of any casino within the United States.  In 1992, when Connecticut law allowed table games in casinos, Foxwood made adjustments to accommodate the new games.  Since then the casino seems to be in perpetual expansion.

John O'Brien is the executive vice president and chief financial officer for Foxwoods Casino, he is also on the Foxwoods Development Board.  Expressing his hopes for the future, he stated simply, “It's been a win-win in Connecticut. We hope to do the same thing in Pennsylvania.”

Foxwoods insistent growth strategy and notable cash flow proceeds itself in the gambling industry.  “They are aggressively going after other opportunities outside of Connecticut, and outside of Indian gaming,” said Attorney Howard Dickstein.  Dickstein represents many of California’s largest casino operating tribes.  Dickstein continues, “They took Indian gaming to a whole new level of magnitude.”  According to Dickstein, it is no secret that Mashantucket Pequot Tribal Nation’s casino management team has recently been researching expansion options in Southern California.

John O’Brien said that when Foxwoods created its Development Branch years ago it was for the express purpose of helping the tribe explore hospitality and gambling projects outside of Connecticut.  Three years ago, Foxwoods began aiding other tribes in improving their own casinos or building brand new ones.  The Chuckchansi Tribe in Northern California is currently receiving such aid from the company.    

Executives and analysts in the gambling community speculate that The Mohegan Tribal Gaming Authority’s recent business in the Poconos may have sparked Foxwoods’ Pennsylvania endeavor. 

The Mohegan Tribal Gaming Authority, owners of the Mohegan Sun Casino Resort in Uncasville, Connecticut, happens to be Foxwoods most competitive rivals.  They have recently filed an application to run Mohegan Sun at Pocono Downs.  The Pocono Downs racetrack, in Wilkes-Barre, has many slot machines.  This past January, Mohegan Sun put up $280 million to purchase the racetrack from Wyomissing’s Penn National Gaming Inc. 

Pennsylvania law has designated seven of the 14 new licenses to racetracks and Mohegan Sun is all but guaranteed to be licensed. 

O’Brien made an effort to downplay Mohegan Sun’s activities in the Pennsylvania.  “The fact of Mohegan Sun being in the Poconos didn't really influence us. We didn't even consider them.” He said, “We viewed it more from the perspective that the Pennsylvania, specifically Philadelphia market, is a very strong market.”

Mohegan Sun at Pocono Downs’ president and CEO, Bobby Soper, openly admits that his company and Foxwoods keep a close competitive eye on each other.  Either way, Foxwoods and Mohegan Sun are a mere 15 minute car trip apart in Connecticut.  They are locked in fierce competition to pull from the same Connecticut, New York, and Massachusetts customer pool. 

When Mohegan Sun opened its doors in 1996 it split Foxwoods’ monopoly into a duopoly.  Connecticut is “an extremely competitive market” according to James Rigot.  Rigot is a former executive at Foxwoods, he currently works for Atlantic City’s Trump Plaza Hotel and Casino.

Compared to Foxwoods, Mohegan Sun has much less in the way of slot machines and table games but has still managed to grow rather quickly.  To keep its identity separate from its competition, it provides more entertainment and retail options. 

Both Foxwoods and Mohegan Sun made over $800 million off of their slot machines last year.  The state of Connecticut receives a 25% cut of their annual slots revenues.  This is the main reason Foxwoods could not allow Mohegan Sun to corner Pennsylvania says industry observers. 

Out of the $350 million dollar casino Foxwoods has planned for Southern Philadelphia, it will only control 30%.  The remaining 70% will go to local investors such as Comcast Spectacor Chairman Ed Snider and developer Ron Rubin’s family. 

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