Other States Soon ... a Casino Near You

It has been many years since gaming in the United States was limited to the meccas of Las Vegas and Atlantic City, N.J. As gaming has expanded to more and more states, the culture of those two cities has changed as well. Las Vegas has become the tradeshow and convention capital of the country, and Atlantic City is not far behind in diversifying its economy beyond viewing itself merely as a gambling destination into one that also offers meeting and tradeshow venues.

Research by the American Gaming Assn. found that casino resorts, including tribal casinos, such as Foxwoods (in Mashantucket, Conn.) and the Mohegan Sun (in Uncasville, Conn.), currently offer 12 million square feet of meeting and exhibition space, albeit more of it as smaller meeting space and less as larger exhibit halls.

Some new gaming facilities also are including meeting and exhibition space, according to Judy Patterson, AGA senior vice president and executive director. The decision on whether a new casino resort will devote more space to casino or meeting space often depends on how the local governmental entities plan to levy taxes.

“The higher the tax rate, the more gaming you'll have and the less of such things as meeting and convention space,” Patterson said.

Still, she added, the more amenities – including meeting and exhibition space – a gaming resort offers, the better for the resort and the local community because of the jobs created and the extra boost to the economy.

Joan Esneault, MGM/Foxwoods vice president of resort sales, said her company's aim, whenever possible, is to diversify business holdings for long-term sustainability and viability. She noted that ideally MGM/Foxwoods likes to have the space to host meetings and conventions of all sizes and to accommodate all needs.

“With both Foxwoods and MGM Grand at Foxwoods (which opens May 17), groups have been a large and successful part of our business,” Esneault said, “and we'll continue to seek out prospective properties in well-traveled destinations where we can continue this trend.”

The last major U.S. casino boom came in the early 1990s, when the country was in the midst of a long-term economic downturn and governments were looking for ways to generate revenue. Even then, most of the new gaming was centered in states along the Mississippi River.

Today, the major gaming companies are already in states like Mississippi, Louisiana, Connecticut and Michigan. Other U.S. locales have recently passed legislation legalizing gambling or are considering it, Patterson said, and the biggest players have their eyes on all the other states and cities that might be the most likely candidates for further expansion. Currently, 33 states allow some form of casino gaming.

Bill Weidner, president and CEO of Las Vegas Sands, said it's a constant monitoring process, not only for where legalization will come next but also for changes in the type of gaming permitted. He expected even more states to at least explore allowing gaming in the next couple of years.

The most recent state to legalize gaming was Pennsylvania, about 18 months ago. So far, all the activity has been limited to racinos (race tracks with slot machines) and standalone casinos in the Philadelphia and Pittsburgh areas.

However, Las Vegas Sands is building a major, 126-acre operation in Bethlehem, Pa., 90 minutes from New York. The Sands Bethworks, with a casino, hotel, conference facilities and a 50,000 sq. ft. multi-purpose event center, is in keeping with the Sands' practice of locating its operations near major metropolitan areas – Las Vegas, Macau, Singapore and formerly Atlantic City – to tap into the larger employee bases to be found there and to realize the advantages of being near big-city infrastructure and transportation options.

For instance, when Massachusetts Gov. Deval Patrick recently discussed the possibility of legalizing gaming, the Sands proposed a similar large integrated resort near Boston that would include significant meeting and tradeshow space.

“Our smallest projects are in the 2- to 3-million square foot range, including our projects in Macau and Singapore,” Weidner said. “In all, we now have under construction about 50 million square feet of retail, gaming, meeting and tradeshow space.”

Las Vegas Sands is not alone. The MGM Grand at Foxwoods, set to open this spring in Mashantucket, Conn., will include an 825-room hotel tower and 115,000 sq. ft. of meeting and convention space. MGM and Foxwoods are also working together to develop and manage a resort casino in south-central Kansas.

According to the New Jersey Casino Control Commission and Spectrum Gaming Group, there is nearly as much casino-related development in the pipeline for Atlantic City as has been invested there since the legalization of gaming in 1976.

Pennsylvania projects include The Mount Airy Casino Resort, which will have a conference center with more than 6,000 sq. ft., and the Meadows Racetrack & Casino, which will enlarge its current Pittsburgh-area facility by early 2009, creating about 12,500 sq. ft. of multifunctional space. The Philadelphia Park Casino and Racetrack expansion will feature a luxury hotel and conference center.

In Michigan, the MGM Grand Detroit casino offers 30,000 sq. ft. of meeting and convention space; Detroit Entertainment's MotorCity Casino-Hotel is expanding with banquet and convention space and a 1,200-seat theater.

And other states without gambling could be looking to legalize the pasttime and profit.

This fall, gaming will be on the ballot in Maryland. Voters in that state might not be the only ones: During his election campaign, Kentucky Gov. Steve Beshear suggested gaming as a solution to the state's economic woes. Now that he's in office, it may be put to a vote in the initiative process.

Patterson said most studies suggest that even in a downturn, people look for entertainment and escape. “No industry is recession-proof, but we'll hold our own,” she said.

Weidner agreed that gaming isn't recession-proof, but it is recession-resistant.

“We might see some lessening of demand (during an economic slowdown),” he said. “It's the same with tradeshows. The major shows will still take place. They may get slightly less attendance, but the business will still be there.”

As Patterson noted, whether or not every new gaming project will include meeting and tradeshow space is hard to know. Nevertheless, it is clear that as destinations mature they do tend to diversify their revenue-generating sources to include tradeshow and meeting space, just as Las Vegas has.