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 Message was posted: 01:41 Oct 18th, 2006     
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PROVIDENCE -- Some Rhode Islanders say it's easy to see where their gambling losses have gone over the last decade - and they're not happy about it.

They've helped pay for new jobs, business growth and public services in nearby Connecticut.

That concern is a card one of the country's largest gaming companies is trying to play as it pushes for approval of a major casino outside of Providence this fall.

From a local Rotary Club debate to TV commercials, the winnings of the two casinos in eastern Connecticut are being painted as the Ocean State's losses.

"Every year, thousands of Rhode Islanders drive these roads taking hundreds of millions of dollars in taxes and tourism and creating thousands of jobs - in Connecticut," says the narrator in a recent television ad.

That commercial is a result of more than $8 million Las Vegas-based Harrah's Entertainment has spent in recent months, mostly on advertising, to win support for a casino in West Warwick.

The company joined with the Narragansett Indian Tribe to propose a state constitutional amendment allowing a Rhode Island casino that could divert gamblers from Foxwoods Resort Casino and Mohegan Sun.

State residents will vote Nov. 7 on the proposal, which is creating heated debate on an issue that's been simmering here for years. Independent polls have shown a variety of possible results, from a close race to casino opponents leading by double digits.

If approved, the casino would bring the first real competition to the stranglehold Foxwoods and Mohegan Sun have on gambling in New England.

"I might hurt your feelings, but I won't go to Connecticut anymore" if the $1 billion Rhode Island casino project is built, Mary Mastronardi said while waiting at the Warwick Mall for a bus to Foxwoods on a recent evening.

The retiree from Johnston, R.I., said she would stay in her home state for her monthly trip to play 50-cent slot machines. The possibility of a shorter trip and chance to get home quicker after losing her self-imposed limit is appealing.

Rhode Island is a lucrative market for the Connecticut casinos. I-95 and other major routes through the state serve as a gateway for gamblers from the Boston area as well.

An annual study by the Center for Policy Analysis at the University of Massachusetts Dartmouth estimates that Rhode Islanders last year spent an estimated $323 million at Foxwoods and Mohegan Sun, which brought about $45 million in revenue to the state of Connecticut.

The numbers climb higher for Massachusetts, whose residents spent an estimated $889 million at the two casinos last year, according to the study.

Clyde W. Barrow, director of the center, estimated that New England can support $4 billion to $5 billion a year in casino gambling. Right now, the region has a $3.4 billion market, leaving room for new entries.

Gambling industry analyst Sebastian Sinclair, president of Christiansen Capital Advisors, said the region has enough betting potential to make an additional casino successful. But he said Harrah's, which owns Showboat, Caesars and other brand names, could reduce the number of visitors to Foxwoods and Mohegan Sun, especially in the new casino's early years.

"What you have to do is give people a reason to drive the 45 extra minutes [to eastern Connecticut]. It is not going to be the slot machines. It is not going to be the table games," said Sinclair, who studied the Rhode Island gambling market for the town of West Warwick, about 10 miles southwest of Providence.

For their part, executives at Foxwoods and Mohegan Sun said they expect competition and have been taking steps for years to get ready for it.

"We have always been preparing for that day," said Mitchell Etess, president and chief executive officer of Mohegan Sun.

That has meant expanding the casinos into resorts by adding golf courses, hotel rooms, shopping and concert venues.

Even if the Rhode Island casino proposal wins approval, Harrah's will need several years to build it. By that time, Foxwoods and Mohegan Sun probably will have spent hundreds of millions of additional dollars to build new space.

Mohegan Sun is working with an architect on adding hotel rooms and other amenities. Foxwoods is in the middle of a $700 million expansion that includes a partnership with MGM Mirage, another Las Vegas-based industry giant.

"It will be tough to match that on a short-term basis," said John A. O'Brien, president of Foxwoods.

Both casinos and the tribes that own them, the Mohegans and Mashantucket Pequots, said they're staying out of what's become an increasingly contentious fight in Rhode Island.

Accusations of private deals and political connections are being lobbed back and forth between the Harrah's/Narragansett partnership and Save Our State, a coalition fighting the casino proposal.

For example, a recent letter written by Narragansett Chief Sachem Matthew Thomas to the coalition accuses the group of having ties to at least one Connecticut casino.

The coalition is working hard to paint the Harrah's project as a bad deal for Rhode Island. Among other things, they say the casino would stunt Providence's rebirth, hurt small businesses and cannibalize millions in state revenue collected from two existing slot parlors in Lincoln and Newport.

Opponents say the casino will bring people through its doors - then try to keep them from going anywhere else. Former Rhode Island Gov. Lincoln C. Almond, who is chairman of Save Our State, during a recent debate mocked Thomas' claim that a casino would boost businesses in the state.

The casino, he said, isn't going to say "OK, everyone on [the bus], and we're going to a restaurant on Federal Hill [in Providence]. Stop your gambling and come on out."

But Thomas, the Narragansett chief, said the opposite is already happening in Rhode Island. He pointed to a recent convention in Providence where busloads of attendees headed across the state line in the evening to gamble instead of staying downtown.

"At night, when they got done with their convention, they went to Connecticut," Thomas said.

Details of the tax structure and regulations wouldn't be decided until after the vote. The partnership plans to give the state at least 25 percent of its gross gambling revenue, which would go to property tax relief, said Clare Eckert, a spokeswoman for the Harrah's/Narragansett campaign.

The West Warwick casino would include a hotel, entertainment, dining, slot machines and table games. The longer vision for the site along I-95 is a full-scale resort.

A leading opponent of the casino is a Lincoln dog track and slot parlor owned by a partnership that includes Len Wolman, a Connecticut-based developer who helped build Mohegan Sun and developed and operates the Connecticut Convention Center in Hartford.

The track, named Lincoln Park, is an antiquated facility with about 3,600 video slot machines.

The partnership, BLB Inc., is spending $220 million to add restaurants, a performance space and additional slots.

The Harrah's proposal presents a problem for Lincoln's upgrade because it would take away customers. The partnership has given $750,000 in recent months to the campaign against the casino.

Newport Grand, an off-track betting and slots facility in Newport, also is funding Save Our State.

George Papanier, president and chief operating officer of BLB, said Rhode Island doesn't have enough people to support Lincoln Park, Newport Grand, Mohegan Sun, Foxwoods and a Harrah's casino in West Warwick.

The goal of the renovation and expansion of Lincoln Park is to dominate the Rhode Island market for slot machine gambling. The refurbished track, which will be completed next year, will try to challenge Foxwoods and, to a smaller extent, Mohegan Sun, for the Rhode Island visitor.

"We have to give them a reason not to go to Connecticut. We have to give Massachusetts a reason not to bypass us," Papanier said.





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