October saw a high-stakes game of musical chairs unfold on the East Coast as Caesars Entertainment and MGM Resorts International shifted their commitments to various casino projects.
With Massachusetts preparing to award its first casino licenses, state regulatory pressure all but forced Caesars to withdraw from a $1 billion hotel-casino slated for East Boston.
At the same time, MGM announced it was ending its licensing agreement with Connecticut's Foxwoods Resort Casino to further its commitment to an $800 million project planned for Springfield, Mass.
Caesars last month terminated its own partnership on a Las Vegas hotel site with New York-based Gansevoort Hotel Group in order to appease Massachusetts regulators. Nevertheless, it was asked by its project partner, Suffolk Downs, to withdraw from the Boston project after the state's gaming commission published a report expressing suitability concerns about Caesars, the country's third-largest hotel-casino operator.
Last week, MGM Resorts, which overtook Caesars in annual revenue in 2012, said it would phase out its 6-year-old licensing agreement with the Mashantucket Pequot Tribal Nation and its Foxwoods Resort Casino. MGM Resorts spokesman Clark Dumont said the agreement had helped the company expand its brand's presence on the East Coast but that its branding efforts would henceforth center on MGM Springfield.
Both companies were looking at Massachusetts as a way to tap into the lucrative East Coast drive market. Massachusetts in late 2011 enacted a law allowing for three gaming licenses for casino resorts: one each in western Massachusetts, southeastern Massachusetts and the Boston area.
The pull of such products was enough to get Caesars to oust Gansevoort from a licensing agreement for a 188-room boutique hotel slated for the old Bill's Gamblin' Hall site on the Las Vegas Strip.
Caesars, which has not announced how the hotel will be rebranded, parted ways with Gansevoort after the Massachusetts Gaming Commission noted in its 558-page report that one of Gansevoort's principals was alleged to have connections to organized crime in Russia.
In addition, the state noted concern about Caesars' $23.7 billion in debt, spurring Suffolk Downs, the owner of the 161-acre East Boston site, to end the partnership.
Caesars spokesman Gary Thompson lashed out at the commission report in an Oct. 25 statement.
"The commission is attempting to set standards of suitability that are arbitrary, unreasonable and inconsistent with those that exist in every other U.S. gaming jurisdiction,"Thompson wrote. "We strongly disagree with the staff recommendation and were prepared to thoroughly address each of the concerns raised by the report."
Caesars expanded its U.S. presence this year and last with the opening of the Horseshoe Cleveland in May 2012 and the Horseshoe Cincinnati last March. Both casinos are operated by Caesars.
Meanwhile, in addition to the Springfield, Mass. casino project, MGM Resorts is pushing for approval to develop a $925 million hotel-casino resort at Maryland's National Harbor near Washington. The company last week released further details on the project, which is slated to include a 300-room hotel, 35,000 square feet of meetings space and 3,600 slots.
"We recently shared our architectural vision for this project, one that was respectful of this opportunity to create an iconic gateway to Maryland," MGM Resorts CEO Jim Murren said in an Oct. 25 statement.
While both companies benefited last year from record visitor numbers to Vegas, MGM boosted its 2012 revenue by 17%, primarily on its interests in Macau, while Caesars' revenue was little changed as Vegas gains were offset by the effect of Superstorm Sandy on its five Atlantic City properties.