Legislation enabling three Las Vegas-style casinos and one slot parlor in Massachusetts is credit negative for casinos throughout the Northeast, but particularly for those in neighboring Connecticut and Rhode Island, Moody’s Investors Service said.
Gov. Deval Patrick and House and Senate leaders support the legislation.
The rating agency said increased competition for Massachusetts gamblers would have an acute, long-term impact on the two Connecticut casinos, Foxwoods Resort Casino, which is unrated, owned by the Mashantucket Pequot (Western) Tribal Nation, and Mohegan Sun, owned by the Mohegan Tribal Gaming Authority, rated Caa3 with negative outlook.
According the “New England Casino Gaming Update, 2010,” published by the University of Massachusetts Dartmouth, almost 19% of Mohegan Sun’s customers are from Massachusetts, while Foxwoods draws 36% of its customers from the state. Many Massachusetts patrons also gamble at the Rhode Island casino owned by Twin River Management Group Inc., rated B2 with positive outlook.
If Massachusetts allows casino-style gambling, the Twin River casino will experience a significant, negative impact on earnings and cash flow, analysts wrote.
“However, because it often takes time, even years, for casinos to open after states legalize gambling, Twin River has an opportunity to further pay down debt and absorb the hit,” Moody’s said.