Perversity in Macao; MGM Springfield gets underway

In a seemingly perverse move, Macao Chief Executive Fernando Chui rejected a lifeline that the Beijing government was trying to throw to his city. The former had announced its intention to “optimize and adjust” the Individual Visit Scheme that brings tourists to Macao. Chui said he was neither seeking an increase in the number of visitors to Macao nor in the number of cities (49 at present) to which the IVS applies. “We will ensure that the quality of life of local residents will not be hugely influenced,” he said by way of explanation, adding that he was concerned about the negative impact that a precipitate increase in tourism might have. The argument doesn’t quite wash. Last year, Macao welcomed 30.7 million gamblers and other tourists, three million down from the optimum number reached in 2014. That’s 92,325 a day. If Macao has been — as implied — maxed out, casino operators are going to have to adjust their expectations of the market.

* The beauty of Class II gaming, for the Miccosukee Tribe of Florida, means that it doesn’t have to share revenue with the state. Sure, the tribe could seek a Class III compact with Gov. Rick Scott (R) — although that’s proven to be anything but easy for the rival Seminole Tribe — but the Miccosukee are content to make as much as $106 million (per columnist Nick Sortal‘s math) and keep it for themselves. “Class II slot machines actually play an instantaneous game of bingo, but the results are represented by diamonds, cherries, etc., as a regular slot machine would – except if you look carefully, you’ll see the bingo card is on display as well,” Sortal explains This Class II policy ensures that tribal members are living on six-figure stipends. If there’s a flaw in the plan it’s that Uncle Sam says the Miccosukee are into the IRS for over $1 billion in unpaid income taxes. If you’re living on $160,000 without having to lift a finger, the bill comes due at some point, I suppose.

* A year after ground was broken on MGM Springfield, construction has finally begun in earnest. It will take MGM until September 2018 to complete the $950 million project. Historical-preservation issues, nearby highway construction and MGM’s own massive revision of the megaresort’s design have all conspired to create the delay. This, of course, buys time for a Foxwoods Resort Casino/Mohegan Sun joint venture to get legislative approval for slots in a box in the all-important Hartford market. This hasn’t been MGM best-managed project: Despite changes meant to save money, the budget has ballooned by nearly a quarter. Accentuating the positive, President Michael Mathis said, “it’s such a sprawling site that we were able to do some work all along the way.” That includes installation of subterranean utilities and a bit of demolition work. And the City of Springfield has already collected half of its pre-opening $16 million fee, with the last $4 million expected some time next year. So MGM is making good on its obligations, no question.

Springfield City Council President Michael Fenton is taking a skeptical view, however, saying that any further dilution of MGM Springfield should come with additional compensation, if events reach that pass. He’s also concerned about MGM’s sudden pursuit of a Connecticut casino, saying, “I have no issues with MGM trying to stop the expansion of Connecticut gaming. But if they’re teaming up with another tribe to compete with the Springfield casino, I have a real big problem with that.”