WGBH Radio; The Callie Crossley Show

I'm Cally Crossley This is the Cali crossover show. We're talking about casinos. In a recent piece for The New York Times magazine reporter Michael Sokoloff details boxwoods financial troubles. Once a bingo hall it has ballooned into one of the largest casino complexes in the world. Foxwoods claims close to 7 million square feet of southeastern Connecticut. It's bursting with ball rooms bars hotels spas and it boasts more slot machines than any other casino. But for all its glitter Foxwoods is short on gold. The casino is sound with two point three billion dollar debt some of Foxwoods troubles are self-inflicted. Some come from increased competition. Well Massachusetts is poised to eat Foxwoods lunch by taking a big chunk of its customers could Foxwoods current financial woes become our future problems. Up next Bay State's big gamble. First the news. From NPR News in Washington I'm Lakshmi saying the nation's high court

has ruled that prison guards can conduct invasive strip searches on inmates were being held on minor offenses. In a vote of five to four today the justices decided against a New Jersey man who argued that his civil rights were violated by two county jails. Albert Florence says he had to undress and get strip search after he was arrested for failing to pay a fine that as it turns out was paid but the high court's ruling places the need for prison security over the right to privacy. A credit card processor is estimating that less than one and a half million card holders in North America have been affected in a security breach of MasterCard and Visa accounts. Global Payment says names addresses and Social Security numbers have not been exposed. Last Friday he said MasterCard said their own systems were not compromised but they notify their customers anyway to guard against identity theft or fraud charges. The first months of the year were not especially strong for builders especially on homes as activity drops so did construction spending. The Commerce

Department finds that spending fell 1.1 percent in February the largest amount in seven months. But Mark Zandi chief economist at Moody's Analytics says he expects the picture to get brighter. I do think over the coming months and certainly by this time next year we'll see much better numbers coming out of the housing market and I also think the commercial. Sector will also turn Zandi says he's also encouraged by news that manufacturing is growing at a healthier pace the Institute for Supply Management says its activity index rose to fifty three point four in March. A different picture in Europe today the unemployment rate across the 17 countries that use the euro currency has risen to nearly 11 percent from London Larry Miller reports the rate is the highest level since the Eurozone was created in 1909. There are 17 million unemployed in the euro zone that's a million and a half more than this time last year and the eighth straight month the rates gone up. Even though Germany held at just under 6 percent a hiring survey points to a downturn there as well.

Spain had the highest unemployment rate at around 24 percent. With many eurozone countries implementing severe austerity measures analysts say unemployment is unlikely to come down soon in regard to manufacturing only to countries Ireland and Austria. So output increase negative growth in this financial quarter means the euro zone will officially be back in recession. For NPR News I'm Larry Miller in London. AirTran ranks number one among the nation's largest airlines for getting passengers to their destinations with the least hassle at least that's how the researchers at Wichita State and Pertti University see it. American Eagle ranked last at last check on Wall Street the Dow was up 71 points at 13000 to 83. This is NPR News. Afternoon from the WGBH radio resume in Boston I'm Christina Quinn with some of the local stories we're following. Webster Police have come up with a unique way to gather fines from defendants caught with an ounce or less of marijuana. Frustrated with efforts to collect the money Chief Timothy

Bent went to small claims court last week to get payments from 10 defendants. Two people paid fines and their cases were dismissed while a clerk magistrate ruled in favor of police in the other eight cases. A statewide referendum in 2008 allowed possession of small amounts of marijuana to be a civil offense rather than a crime. But with no consequences if the fine was not paid. Rhode Island law enforcement agencies that participated in an investigation that resulted in Google Inc forfeiting 500 million dollars last year are about to learn how much of that sum they will receive. U.S. Attorney Peter neuronal is holding a news conference this afternoon to discuss how the funds are being distributed. Google forfeited the money to settle a government investigation into his distribution of online ads from Canadian pharmacies that were illegally selling prescription drugs to American consumers. Federal officials have sharply reduced the commercial catch limit for Gulf of Maine caught the 20 percent cut that takes effect May 1st was far less than an 85 percent reduction considered after new data indicated the cod population is in worse condition than thought in Vermont pending state legislation would change the grading system for maple

syrup says the changes would unify classifications across North America. The bill has cleared the state Senate and is awaiting action in the house. Similar similar bills are pending in Maine New Hampshire and New York. We have light rain conditions in the Boston area with a temperature of 43 degrees right now it's it'll be mostly cloudy this afternoon rather than becoming mostly sunny at times with a slight chance of showers highs around 50 tonight mostly clear lows in the mid 30s Tuesday sunny and windy with highs in the upper 50s. Wednesday mostly cloudy highs in the mid 50s. Right now it's 43 in Boston 51 in wester and 46 in Providence. Support for NPR comes from Carnegie Corporation of New York foundation created to do what Andrew Carnegie called real and permanent good celebrating 100 years of philanthropy. This is WGBH. Good afternoon I'm Kelly Crossley. Today we're talking about casinos. Now that casinos are assumed to be reality in Massachusetts we're looking at what the fate of the state would be by looking at the financial health of casinos

elsewhere. I'm joined by Michael Sokoloff He's an author and contributing writer for New York Times Magazine. His recent piece for the magazine is titled Foxwoods is fighting for its life. Michael Sokoloff welcome. Thank you great to be with you. So Michael Fox was of course is one of the NC knows casinos and Connecticut very close to Massachusetts and heavily frequented by the way by some Massachusetts residents. I have to say that reading the article it was like a flashing red light cautionary tale for me. Yes it sure is it's because it's if Fox was in trouble what does that mean for us. We wondered as we read your piece. So folks first I thought I'd ask you if you could in broad strokes talk about some of the key issues that are leading to Foxwoods fighting for his life. Well Foxwoods for a long time. In the beginning was was the only game in town it was the big property where you could gamble between New York and Boston and then it was joined by Mohegan Sun which is very close to

Foxwoods and they were the two properties. And as you might imagine you know they just raked in the money because it was a market starved for gambling. So two things happened. One is that the economy tanked and you know this affected lots of businesses including casinos KMI casinos are not immune. But the other is that that more gambling came into the market and and gambling became ubiquitous and it is becoming more so. So this immense market they that they commanded began to shrink and it is shrinking. More each year the third thing that I'll add rather quickly is that Foxwoods made a lot of bad business decisions and in addition the tribe that owns Casino the Mashantucket peak watts took a lot of money out of the property. You know people don't handle sudden wealth well as a rule. Few of us do. And this tribe

really fell into some money you know on historical and sort of accidental grounds in some ways. You know it just took a lot of the money out of the property and as if it would always keep flowing it has not kept flowing in the same way. So let's talk about Fox wood specifically because you know as I read your piece I realize I don't think I've ever been there I've been to my Hagen son but I've never been to Foxwoods and I really didn't have a sense of how large it is and and what the property was like so. Would you describe what Foxwoods for those of us who haven't been there what is it like. Well I think that in some ways all casinos are a little bit surreal they're meant to be surreal they're meant to transport us into you know some on to others zone of reality where we do something that we wouldn't necessarily normally do which is poor lots of money into whether it's a table game or a slot machine and knowing that money's probably not coming back. So that's what Foxwoods is but it's bigger than you can possibly imagine it covers

more square footage than the Pentagon does 6.7 million square feet and it just sprawls and sprawls and sprawls one of the people there described it to me as like your grandmother's house. Not everything is where you expected to be you. You cross through the kitchen to get to a bedroom to get to the back porch to get to you know maybe the powder room on the first floor I mean it's just. It shows the signs of a place that was built without a lot of care to too careful business or design practices because in the beginning all they had to do was add square footage put table games and slot machines there because everyone was flocking to the place and losing losing their money and that's all that that they had to do in the beginning to make these enormous profits. So what does it look like because again I realize that most of the TV ads I've seen are for my he going in they are portraying.

You know sometimes they have like you know singers and dancers it is with little Jingles It's feels very hip and kind of sort of Las Vegas the I have been to Las Vegas and visited many of those casinos. So is it like that since it's a large and can have many things going on at once. Well it's a little bit like that they certainly have lots of entertainment there you know Frank Sinatra played there long ago and you know when one time when I was there. Back in the summer Snoop Dog hosted a pool party although I must tell you I'm not sure that Snoop Dog ever showed up. But lots of people were there as if he was going to show up. So you know it's a casino it's got all that glitz going on. However even the management the current management lots of people work there acknowledge that it's not hip if you're looking for New York if you're looking for Las Vegas if you're looking for you know good music and cool lighting Foxwoods has never quite gotten on board with that they're trying to fix some of that. But it's

very New England I think. I think in the in the story I said at one point that you know the sexiness and the lore of casinos can be overrated even in Las Vegas it depends what kind of mood you're in. But that Foxwoods is not that Foxwoods is very New England as you know some of it you know some of the rooms look like country in sort of rooms and I'm not sure that's conducive to to gambling or not I don't I don't know that it is so it's not a Steve Wynn belies Yale feel. Absolutely not. OK. Look I'm sure it's not your place I think you know it by the way and we may be getting to that they built a new big new tower to try to move into that direction a little bit. But you know the whole psychology of gambling is meant to create a certain feel and I think it's fair to say that they didn't quite get that the first time around and it didn't matter for many many years.

Well I think that's the point because it didn't matter and you know people have been saying in some quarters here certainly throughout our big discussion about bringing casinos to the state that having this casino is really pretty much a license to print money. So they made a lot of money but now they find themselves by virtue of what you outlined at the beginning. In a lot of debt now it's still the economy tanked. It would was didn't take enough so that they couldn't make up with the numbers of people who were coming there and the kind of money they were spending close the gap I guess. Well as is often the case whether it's someone's personal debt or or mid-sized companies debt or something like this it's a combination of things. If they had not expanded so vastly and had so much debt they would have done a lot better when the economy tanked but they had expanded expecting that the business would continue to grow and it went in the opposite direction and they're.

Underwater. You know they just could not pay the the ongoing monthly debt that they had because of a combination of these things. You know if they hadn't borrowed so much maybe they'd be OK if the economy had tanked maybe they'd be OK if the gambling market nationwide hadn't changed in certain ways maybe they'd be OK but all these things really combined and exposed a business that had not been very well run or had not been very stable a run for quite a few years. Well except for some of the what you said last which you know hadn't been stable a run which can happen and in any business any of the other things can happen to any casino seller. You know as we in Massachusetts look at this we have to you know ask ourselves. Could any combination of the rest of the stuff impact what we want to have happen here. The people who are supporting casino gambling to be successful and to make a good return for the state. But so for a while. Foxwoods did have a good return for the state now they've got to try to manage this debt and get out of it. Here's something that I found very

interesting because of the complicated in your piece because the complicated bank situation and the tribal affairs the lenders can't foreclose and Foxwoods can't qualified for bankruptcy. That that's an and unusual situation where it is an unusual situation and you know I'm not someone who writes about high finance all the time. But I think that what really shocked me and I think there are echoes of this in the rest of the economy. You know we think of people who lend vast sums of money with it where they've done their homework they've thought of everything right. Right. But no and so people you know conglomerates lending huge amounts of money to Indian casinos apparently never considered the fact that if they got in a bankruptcy like situation they couldn't necessarily go in and and seize the asset and run the business as might normally happen or that asset

could not go into bankruptcy because this is sovereign land the Mashantucket Pequot are a sovereign nation within. You know the very complicated rules and laws that exist in this country. So the lenders said Oh my goodness this we're sort of stuck here and Scott be terror the CEO of of the of the property right now. Foxwoods you know businesses sometimes want that option of chapter 11 to work things out it's meant to be there was sort of a convenient thing and he said well it might be good for us too but it's not really an option. So they've got to work it out a different way. So they're having to work this out while they're the other impacts are taking place I want to ask you as you walked around and did your reporting. Who are the people gambling we know some big part of them are come from Massachusetts. Who are they. What do they look like who they seem to be.

Well as you would see in nearly any casino they're older. They're very old I should say very old because I'm in my 50s. But but demographically they are 50 and up and when I walked around the casino floors with Scott be chair of the CEO he said look around forty five is young and this has implications for the casino business is not unlike the newspaper business where you look at your core customers and you say gosh they're getting pretty old I hope that younger people like newspapers because you know they're going to be they're going to have to be our customers after a while it's the same thing with the casino business. The people in there are older I think there is a perception that many of them are poor and they're gambling away money that they don't have and certainly that happens and that's a whole other discussion that we may or may not have. But there are lots of people in there who have money that this is the way

they entertain themselves we can make value judgments about that. But I won't say that I got the impression at Foxwoods or most other casinos that these were people hoping you know in some crazy way to make a killing and and they were walking out having spent their last dime. I don't think that's the most common thing you see in a casino I think you see relatively comfortable older people. And a lots of cases who are gambling. You know some bankroll at some regular interval and generally losing it. All right so here's a scenario we understand there's some specificity this is just applicable to Foxwoods probably But beyond that the economy tank is just coming up. But you know that's that's a concern. You've got to borrow some money to put this whole thing in place. And with regard to tribal casinos there's often some pay out I note in your piece

that for a long time tribal members is not a very big tribe were getting $100000 a year was that a great impact on their ability to survive or to go into debt. Rather I guested that forced them into debt faster. The payouts. It absolutely did and that $100000 is perhaps a conservative figure depending on the status within the tribe and whether you were in trouble government. Those payments in some cases were larger and a lot larger. There were people who had government jobs in this tribal nation which is only 900 people that were pretty well paid for that. And then there was lots of other spending on all kinds of facilities on tribal land. And it was to tell you the truth just staggering. You know that you could that such an amount of money could be spent on such a small number of people. I mean you can see these as dividends. The tribe doesn't own the casino.

And these were dividends to the owners of the casino but they were quite generous when times were good. Wow. So the other piece of that that I think it's instructive for us to pay attention to is your piece about what you call cannibalization. Many other casinos popping up around sometimes and near the same space but even maybe not so near it has an impact so Mohican I guess had the most immediate impact but as I understood it lots of Massachusetts citizens were going to both casinos so I don't know that that was such an immediate effect in other words and Mohegan drew away from a lot of Foxwoods customers maybe it did but certainly having to wear a lot of Massachusetts customers or going means if we have our own which we're going to have they go away and that's more casinos out there so the cannibalization effect is really quite intense. How has you. How have you seen that work there and I don't know how you get out of it. How does

that change. Well there's a there's something in the casino industry called the Law of Gravity and what it just means is that a lot of gamblers not all of them but a lot of gamblers will just go to the closest casino. You know they just want to slot machine if you put a slot machine in the back of a 7-Eleven that's where they would go. And it's you know difficult for them to battle against I got interested in this story not specific to Foxwoods or Mohegan But just because I do a lot of traveling for the New York Times Magazine and the stories that I do. And I realized after a while that nearly everywhere I went anywhere in America whether it was rural or urban suburban whether I was in an area that I might have imagined was socially conservative there was always some billboard saying turn off the highway here and go play you know the loo slots you know wherever and or go play blackjack. And I thought well this is this is different you know this is new and gambling is everywhere and gambling is everywhere. And the key thing

about that is gamblers are not everywhere people in the industry will tell you there are a finite number of people who want to go to casinos and that number does not grow at the same rate that the opportunity to gamble is growing. So in Massachusetts or anywhere else I think the key is expectations. What do you really think your customer base is going to be and how much of that is the state going to take and. You know what it was going to be used for but. But the market is not growing it anywhere near the rate that that the availability of gambling has. Well wait that's the point for Massachusetts that well that's what we're working wondering about here. What's going to happen. We're talking about casinos looking at how the financial health of casinos and other parts of the country could be a predictor for how the Massachusetts casino culture welfare. My guest is journalist Michael Sokoloff. His recent piece for The New York Times Magazine is Foxwoods is fighting for its life.

Up next we continue the conversation with a look at how casinos in New England are doing. You can join us at 8 7 7 3 0 1 8 9 7 8 8 7 7 3 0 1 89 70. Well casino in Massachusetts be good for the economy. I know we've asked before. Answer it again. Did you cross state lines to hit casinos in Connecticut and New Jersey. Will you be a patron. That's what's important. Of these resort style casinos once they're up and running in Massachusetts. This is WGBH Boston Public Radio. We love our contributors. That means you. And Ellis insurance offering personal and business insurance plus financial planning and their online insurance tuneup identifying timely and relevant Risk Management Solutions. Exceptional service intelligent insurance Ellice insurance dot com. And it's your move. We are a group of professional women who have gotten together to help families move from where they are to where they want to be. Janice are more

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right now and you'll automatically be entered into a drawing for a brand new Apple iPod. Use it to go behind the scenes of WGBH radio and television with our new digital numbers guide. Entry and full rules at WGBH dot org slash itat. Great question has a great question and that's a great question. It's a great question. Rick great question on fresh air you'll hear unexpected questions and unexpected answers this afternoon at 2 here on eighty nine point seven. WGBH. Welcome back to the Calla Crossley Show. If you're just joining us we're talking about casinos asking if financially trouble casinos in other parts of the country could be a predictor for how Massachusetts will fare. I'm joined by Michael Sokolov. He's an author and contributing writer for The New York Times Magazine. His recent piece is Foxwoods is fighting for its life. Also with us are Clyde Barrow and Jason Schwartz Clyde Barrow is an expert in the New England casino market and the director of the Center for Policy

Analysis at UMass Dartmouth. Jason Schwartz is the senior editor of Boston magazine. He's been tracking casino developments here in Massachusetts. Now you can join us at 8 7 7 3 0 1 89 70 8 7 7 3 0 1 89 70. You can also send us a note to our Facebook page or send us a tweet. You've heard how Foxwoods Foxwoods is doing. Do you think Massachusetts is taking a risk and do you see this as a boon for the state. Will you be among the patrons hitting the slots and crap tables when casinos come here. 8 7 7 3 0 1 89 70 8 7 7 3 0 1 89 70. So Jason Schwarz welcome you've been following this very closely in Massachusetts. I imagine that many people had their teeth a little bit rattling after reading Michael's piece. What lessons do you think that Massachusetts to take from what was laid out in great detail at Foxwoods. Yeah that's sort of the worst case scenario down the road I'd say you know I think the

big thing is when you compare Foxwoods and Mohegan Sun you look at how Sun did a much better job sort of separating the politics of tribal governance from actually operating the casino. So that's I think is something the mask you want to know should really play. Pay close attention to especially considering how toxic and just sort of crazy and wild their politics can be. And we should say that because the Mashpee have put in for it's in Lakeville. Right. Is that the area they won ton ton right. The point to have now asked for a spot in Lakeville. So just to be clear. The way I understood it there was only one tribal casino approved under the legislation that was passed. So now what happens. Right. The point of going rogue I guess would be the answer that they're trying to put a CEO everywhere back in the 80s when they were seeking federal recognition as a tribe.

They essentially traded in their rights to a casino by saying if you let us be a tribe of federally recognized tribes we will follow the laws of the land. And just about everyone I think outside of the tribe has taken that to mean that they can open a casino because they have to follow the laws of Massachusetts. The tribe feels otherwise. So they're going about trying to do this. We'll see if it's successful I sort of have my doubts. So in the end you really think it's going to be one tribal casino and probably the Mashpee will have the best shot. Yeah that's what I'd say for sure. OK. So you know I know. Not too long ago I remember reading about layoffs at both my son and I thought Foxwoods but I don't know I can't say that for sure but I know my son. So even so my he can son now is in Michael's piece anyway. It is set up to be in a better position not great but they're certainly surviving. They're smaller they don't have as much debt. All of that kind of stuff. But still it's not looking good. No. I mean it's not been the best time for casinos anywhere lately I think. But I think again for especially for the masses who want to know the difference between

where Foxwoods is right now and Mohican Sun is really an instructive lesson and sort of how they should proceed. If you look at a lot of the mistakes Foxwoods makes and talks about the great story you know a lot of more politically motivated build build build you know their captors make everyone happy. Those are not the dividend payout the dividends. Those are things that can get you in trouble. So I think he can sign even for all their troubles finds themselves in a recoverable position at least and they're looking to come into Massachusetts and sort of salvage what would otherwise be a real disaster of the opening of the Massachusetts market. So the match fees could you know really benefit from all of the mistakes they've made then. You like to think they are learning. Sure. You never know. I hope they're paying close attention. All right let me take a phone call before I go to Clyde Barrow Harry from Weymouth Go ahead please. You're on the tele Crossley Show. Good afternoon. Hi. My wife and I go to Mohegan pretty regularly. We do it instead of going on vacation because more you can made it very easy for us to go

there we bring the children and when they were younger it was much better there's not that many things for a teenager to do there other than the shows. But yes Massachusetts resort casinos make it attractive enough for us to spend our vacation money there. We will do that we don't go out of the country and spend it at an island we'd rather spend it right here. Harry I just want to be a little bit nosy How old are you. I am 61. OK so you're in the group of people who are who tend to go to casinos when you go to Mohegan Sun is supposed to be a little bit hipper. Do you see younger people even though they didn't have the stuff for the teenagers. You see people younger than yourself. Well I've seen a lot of younger people when they have big shows like Korn or shows like that. And I have sat through them even though there's been a lot they've moved the organs in my body. We have enjoyed them all and we have seen adult shows and kids shows those things that brought us the applause. The rooms were not so overly expensive but it it broke

the budget. I enjoy gambling My wife likes to socialize and have cocktails. We love the restaurants. All of those things bring us there and we've been going there now for about 11 years. OK so it's a good so it's a good thing that meant for you that Massachusetts is about to have casinos. Well it's a great thing but I was a part of me that feels it's a little johnny come lately. OK got you right Clyde Barrow. Let's talk about that you are an expert in the New England casino market and the director of the Center for Policy Analysis at UMass Dartmouth. You have been saying from the beginning that all of those Massachusetts folks that go across the way to Connecticut will come home to Massachusetts. Now you heard Harry say it might be a little late. Well you know it would have been different had we done this 15 years ago when we first started talking about it in Massachusetts there's no question Massachusetts would have dominated and dictated the market at that point in time. So we are coming in late but I would say two things about that. One is we do have the benefit of learning the lessons of other states.

There are 36 states now that have class 3 casino gaming 38 now with Ohio and Massachusetts so we can learn what they've done well and we can learn from their mistakes and I think the legislature did its due diligence in trying to put together a piece of legislation that incorporates those lessons. The second thing of course is that Massachusetts residents right now spend about a billion dollars a year just in Connecticut Rhode Island on casino gambling. Does it include what they're spending in places like Las Vegas in Atlantic City where one of the larger feeder markets so a lot of that will come home. Not all of it will come back instantly because there are people who aren't going to walk away from their player points. There is just sort of the attractiveness of going to a different venue on occasion but I certainly think that within one year you will probably see at least two thirds of that money coming back into Massachusetts and the overall market will grow. You know Michael earlier talked about the propensity to gamble that as you move casinos closer to population centers people who don't gamble will and

people who do gamble will do it more often. And the reality is we see in the overall northeastern market grow considerably over the last five years in fact if you look at the northeast as a whole. Even though Connecticut and New Jersey have suffered as a consequence of expansion the northeastern casino market has actually grown into a 15 billion dollar market over the last five years. All right well let's talk. About a couple of things that Michael raised in his piece that you know would seem to be troubling possibly from as Ji is it's one one piece one point was cannibalization. So you know I know you say they're there everywhere and the more there are sometimes people you know go but will that have no impact in the way that you see it. It will certainly have an impact on in Atlantic City and it will have an impact even more dramatic on Connecticut. And those are the two venues that have seen their revenues decline partly as a consequence of gaming expansion elsewhere in the country.

The problem is difficult to know how much of that decline is the result of cannibalization from increased competition versus how much is due to the recession and that's because both of these factors get at exactly the same time. And so it's really difficult to know which is which. I would say though that we've been monitoring very closely whether or not the opening of Aqua duct in New York would have an impact on the Mohican Sun which everybody thought it would. And as of this point we can't see any impact. In fact they seem to be drawing on a on a local market around New York City that's very vibrant and robust and they're actually expanding the market as a whole. Michael Ware in your travels have you seen the casino market expanding in that it could potentially lead to the kind of cannibals and that people worry about. Well first of all I think I think Professor Barrow is right. You know both of these things came together at the same time I think for

sure the cannibalization which is a tough word but only going to use it once in Atlantic City Pennsylvania is a huge casino market now there are 10 large casinos they're taxed very heavily. So the state is benefiting. Philadelphia is right on top of Atlantic City in the same way that these Massachusetts casinos are going to be right on top of Connecticut Atlantic City has been devastated by by the casinos in the Philadelphia area. I don't know that Connecticut is going to be devastated in the same way. Certainly they're preparing they know they need to shrink some. They need to have different expectations. But there's no way that this. Growth in Massachusetts is not going to have a huge impact on Connecticut. The one thing I should add quickly Foxwoods is not going to perish for the first time in a long time they have very competent management. As long as the tribe you know follows this management

Foxwoods just produces too much money on an ongoing day to day basis not to survive. But it's going to change it's going to become smaller and so is Mohegan because mainly because of Massachusetts. So Jason one of the things that's become very clear Michael's piece from Harry from you know everything that we know is that the people in the gambling can see right now are older. And you know that's a group that is sort of been constant. And we know that that's going to happen in Massachusetts. But at the same time we just had this huge study that came out about how so many older people in Massachusetts are headed in the poverty or teetering on the edge. And I know that Michael said that that doesn't mean that the people who are gambling away their money but are in the casinos. But that seems to me to be something that we will have to look at closely. Well definitely I mean it's definitely something you have to keep an eye on and just you know off the top of my head it can't be that great a sign that I'm in my mid late

20s and I can't think of any of my friends who go to Foxwoods or Mohegan Sun on any sort of regular basis or really ever. So it's definitely trending toward older people. But you know it's something that's going to watch as time goes on. Is the player award systems these casinos used to you know drop people and are so advanced and so sophisticated they can you know get you to do things that you're not even sure you're doing it. You may remember the New York Times Magazine story a few weeks ago about target knowing people were pregnant. It's sort of like the gambling version of that. So certainly you know they all know where all those you know people who are potential customers live and have a way to get in touch with them. Is there no way that people that people your age will be attracted can't you. You know I mean I think that there are these casinos are moving in that direction as I know glad to get you in there you know. You know with with all due respect to Korn I don't think current concerts are going to do it anymore. You know it's I think a lot of it's location I mean I think a lot of it will come down to whether you

know we end up with one in Foxborough or whether we end up with one in Boston and you know most young people around here at least live clustered around Boston in you know the sort Allston Brighton Cambridge Summerville you know that sort of sphere. I know East Boston would be a perfect site if you're trying to get younger people there. Yeah but you know like you say it's definitely trending toward an older demographic. So Clyde Barrow looking at this older demographic and you know it you know it is what it is. How do you keep this going with so many casinos with one group that's maintaining it. Well a couple things One is you're absolutely correct something like two thirds of casino gamblers are age 40 and older. And that's partly because the average casino gambler has a median income for the region where they live and of course that's when people start to hit their peak earnings on a lifetime basis and have disposable income to spend at a casino. However casinos have been looking toward a younger market as well. Part of that has to do with

diversification into the non gaming amenities. You know we've mentioned things like like like concerts and other kinds of entertainment venues dance clubs are becoming increasingly popular at casinos and they will be looking that demographic and in fact I think you if you just go through Mohegan Sun on a weekend you'll notice that about 10 p.m. the whole demographic starts to turn over that the older people are playing and the machines go to sleep. The younger people come in from the colleges to go to the dance clubs the bars and maybe to play some table games and casinos are certainly very much aware that I would add a second important thing is that nationwide now and in New England as well about 20 percent of the visitors to casinos don't gamble at all. They are going there for the other entertainment options. So that's become one of the primary growth areas for casinos in terms of diversifying their offerings. Well I have to say that you know I'm in that 20 percent because I'm so uninterested $10 I'm done. But if there's a good spot there we can have a conversation.

And a good you know restaurant I have to say that that that could be appealing but I don't like all the other stuff that's surrounding it. So I don't know that it would be in the end we'd have to see. Let me take this call. Janine from Brookline Go ahead please you're on the callee Crossley Show eighty nine point seven. I Cali. How are you. I want to spend with you all the time. Thank you. And I really enjoy your show. The reason I called is that I actually went down to Foxwoods a couple months ago my husband and I just we're doing a little driving around doing when we've been here we thought have an adventure and I have never been to a casino before and I just found it to be the most depressing place I've ever seen. I and I'm in the demographic they might be shooting for I'm in my 50s I play bridge which is also having a problem trying to get younger people to play. But the people I thought playing the slot it was just very sad and depressing. I mean they were just putting these cards. And that was the other thing that speaking

to the person saying about getting people to come and gamble. For example I had no idea I thought I could put some quarters in and didn't have a place for quarters. There was nobody to ask how do you use a slot machine. You know I want to thank I mean I just had no idea. So you know we walked around I wanted to see the roulette wheel. It didn't look exactly like James Bourne but it was kind of cool where you know you would you gamble in Massachusetts. Well I'm assuming there's the other guy that the gravity thing might work for me I would. I'm not a gambler but I would definitely go once or twice a year I'm sure. Just to hang out it is a dance club I would do that. OK. Oh look at the cable going. Well you're part of the demographic that's going to support the casino industry in Massachusetts. I think they're counting on you. Clyde Barrow also saw the law of gravity works.

It definitely works. There's no question that this is a well-established model and it works everywhere where everywhere in the country. I would point that as an interesting observation that that one of the things that happened with casino gaming is that the slot machines are basically automated at this point so you don't have the floor attendance the way you used to do dispensing quarters and giving out change. You know you put dollars or you put tickets in and usually Now what will happen with most people is that they get introduced to actually gambling by going with somebody who already knows how to do it. Because you're not going to probably in most places find dealers or for attendance are going to actually teach you how the dealers might explain the game to you very briefly if there's nobody else around. But it's really something you have to go with somebody who knows what they're doing to sort of teach you how to do it. Clyde and Clyde Barrow I know we have to say goodbye to you but I want to ask one question before we get before you go and that is there's an interesting piece in The New Yorker magazine about a guy who'd who decorates Ford Steve Wynn's casinos.

And one of the points that he's making is that a lot of these casinos were designed with men in mind but there's a great amount of trying to reach out to women. Yeah well women are actually about 45 percent of casino gamblers on the whole. They're over two thirds of the slot machine players and so you know so the very important driver of casino revenues. You know demographics. All right. So it's going to be a success as far as you think as you look at the scenario. We'll be rolling in the dough here in Massachusetts right. We will find out soon enough. OK. Thank you so very much for joining us. We're talking about casinos looking at how the financial health of casinos and other parts of the country could be a predictor for how the Massachusetts casino culture will be here. Well casino is in Massachusetts be good for the economy. And do you cross lines to get casinos in Connecticut and New Jersey. You can join us at 8 7 7 3 0 1 89 70 8 7 7 3 0 1 8 9 7 8. 8 7 7 3 0 1 89 70. This is WGBH Boston Public

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Stories you'll want to share. News Online. At the GBH news. Welcome back to the Calla Crossley Show if you're just joining us we're talking about casinos asking is the state of casinos and other parts of the country. Could that be a predictor for how Massachusetts casinos will do. I'm joined by Michael Sokoloff He's an author and contributing writer for The New York Times Magazine. His recent pieces Foxwoods is fighting for its life. Also with us are Jason Swartz. He is the senior editor of Boston magazine and he's been tracking casino developments here in Massachusetts. You can join us at 8 7 7 3 0 1 8 9 seventy 8 7 7 3 0 1 89 70. Or write to our Facebook page or send us a tweet. Now Jason Schwarz one of the things that Michael's piece makes quite clear is that politics is a big part of all of this. And that was a lot of the reluctance and even approving this casino

legislation to go forward. We finally got in the commission with all of the members on it. But there are these incredible deadlines that are right on us in fact by April 1st something was supposed to have happened and they're just getting together. How is this going to impact who gets selected when selections are made when it kicks off all of that. Well here and that is April Fools Day joke line. You know I think everyone agrees that they need a little bit more time. The question is will the legislature go give them more time. You look at some other states that have tried to rush this. Pennsylvania is one that people often bring up and it's just not worth doing you run into trouble you leave holes that corruption can get through. I think it's better for everyone if maybe we take a deep breath realize that this is a very very complicated thing that's going to have a big big impact on the state for a very long time. You know it's worth you know taking the time to get it right. Michael one of the things you make clear in your piece was that Ed Rendell former governor of Pennsylvania played hardball with these casinos and got a 55 percent what they called a hold from the

casinos meaning the return to the state. I know that's not it's going to go back to Jason is that that's not as high as we can. We've negotiated here. That's pretty incredible. Right that's that must be the highest in the country. I believe that is the highest in the country and it shows what casino operators owners will tolerate to get into the market shows are profitable. The industry can be you know even in Connecticut over the last 20 years and the state only benefits from the slots hold but over the last 20 years the state of Connecticut has taken in 6 billion dollars in direct flow of money from the slot machines and that doesn't count the spin off effect of the 20000 some jobs between the two casinos and all of the other all of the other multipliers you know you mention that these casinos are doing other things besides gambling I think Professor Barrow mentioned that and that's true but nothing profits like the gambling itself. And the states have realized that you can take a big chunk of that if you play hardball.

So the spas and the restaurants nothing's happening there because that's the only part that's the only way to get my money. Well they're hoping they're hoping that you know you'll change your mind and go down there and have a drink and then have another drink and and empty your wallet a little bit. Now $10 my limit now Jason. What we've negotiated in our legislation is a 40 percent hold I believe that's the top right. I I I may be mistaken I thought it was that the state was going to take 25 percent of all revenues. You can go back and check that. OK that's that's oh it sounds so paltry next to 55 percent. Well yeah but you also need to strike the right balance. You know you get the investment in the development from the casino operators in Connecticut like you guys were saying it's 25 percent of just a slot. So we'll see what they come up with. All right. But I'm concerned Jason about these deadlines and that what does this mean though that if they have to go back and ask the legislature for more time as we've seen in because

we're look at using Michael's piece as a cautionary tale it's not a good thing when what would happen what is what's the worst case scenario for us given that we haven't built anything yet. The worst case scenario is that we rush it we don't get the regulations right we don't get the oversight right and allows for wasting corruption. And you know things that happen in Massachusetts politics that happen in Massachusetts politics that's the worst case scenario. Hopefully there are enough mechanisms in between you know the attorney general's oversight in this and the five member committee that will be able to do this without too many problems. I do want to ask you there was an interesting piece in The Eagle Tribune to both of you. That's a newspaper that looking at issues in the New Hampshire governor's race and gambling has come up back to this point about cannibalization. So now all four of the declared candidates say that they would consider casinos because what Ding ding ding they're concerned about Massachusetts building and taking away the people from New Hampshire. What do you think about that.

Jason I will I will bet you the entire contents of the New Hampshire state liquor store that has just over the border from Massachusetts that before too long there's going to be a casino pretty near it. It's going to happen eventually. New Hampshire is losing too much money. It's not going happen right now but it might happen five years may have been 10 years. But it's something that we should be prepared for and just assume is going to be there because in Maine it's happening and you know Rhode Island they're working to expand the gambling options so other New England states are definitely going after it. That's my guest Jason Swartz He's the senior editor of Boston magazine and he's been tracking casino developments here in Massachusetts. Other than slowing everything down and taken our time and trying to eliminate fraud. Good luck with that. Here in Massachusetts is there any other huge lesson that you think comes out of Michael's piece for us your messages. Yeah I mean it's I think competent management It sounds so basic to say but Foxwoods made a lot of unforced errors. You know they had a lot of balls into the

net or out of the court and it just didn't need to happen. So you know this is this is sort of I was saying earlier right now the Mash Up knows are trying to figure out their corporate governance how they're going to actually operate their casino. And I think getting that right will be pretty much the most important thing they do between now and the Time Doors open assuming the doors to open. So Michael if you were teaching the lesson for the Massachusetts Gambling Commission which really just got itself together all the members just got a name what would be the chief lesson you'd want to point to in your piece and say to them pay attention to this. Well I would agree with Jason. You know get it right. Make sure that that that it's done so that there's not corruption. But I would have had to do it quickly because I would also agree that New Hampshire is going to have gambling and probably everyone eventually other than Utah perhaps is going to have gambling and there's going to be less to go around. So whether or not this is a good thing I think it's an unfortunate way to raise public funds but it can be an effective way.

But the pie is going to be split in so many different ways that whatever you think you're going to get out of it may be last and the sooner you get in as a quote early mover the better off you may be. Well even with the law of gravity as even some of the callers said they might be interested because if it's close they check it out. Is there a tipping point. There's a tipping point it seems to me with most everything else in business this seems to. I can't figure out where the tipping point is here. Well you know it may not be so much the issue as a tipping point as you know it sort of pockets a little bit smaller. There's only so much may go around in the end. But we've been speaking of New Hampshire I think sort of one of the interesting things and Professor Barrows talked about this a lot too is where we put our casinos when we put them somewhere because a lot of the proposals are sort of along the southern half of the state. In fact I don't think there's about as north as you can go as Boston to have sort of a serious contender right now I think. So you know that's you know not good for Connecticut but good for New Hampshire to leave that

open to people who go north. So you know these are all the types of things I think we need to be thinking about. It says to me that their casinos are no longer Michael as you think about building one is you know back in the day when Las Vegas and then later Atlantic City was coming together it was merely about slots machine slot machines and you know maybe some table games. But now from what both of you are saying it's really about thinking about you know geography hugely. Population relative to geography take away a tipping point cannibalization is a lot going on. And let's not mention that if the economy doesn't come back fully I don't know that you have a whole lot of people with money to spend. I think all of those things are true and and certainly it would help to build a great property. You know there's no doubt that that that would help and not everyone is going to go to the closest place and certainly some of the people with more money to

spend and more money to lose are going to go to a really cool property and the more properties there are the probably the more important it's going to be to build a very attractive place that's one of the issues Foxwoods says it is not as attractive a property as it could be. And first to face that problem with the Mohegan Sun which has a much higher cool quotient. And if these places in Massachusetts are also in that same vein it will be even tougher for Foxwoods. Last word Jason. Well you know I think that Michael's last point about attractive property we come back to this question we're all having about Suffolk Downs whether any spots in there whether it's out in Foxboro. So in Boston you have the very location and Foxboro you probably get a better building. Who knows what the right way to go is but I'd say that Steve Wynn design isn't quite my taste but there must be some people out there who like it so well the fact is that Steve Wynn design and this guy who they just scribing in The New Yorker magazine sounds pretty impressive I have to say.

Yeah. Making it for the ladies now. Thanks to both of you for interesting conversation I guess I'll see you at the blackjack table. Jason the money right now Michael's not go on. Thank you both very much for conversation. We've been talking about casinos with author Michael Sokoloff a contributing writer for The New York Times Magazine and Jason Swartz the senior editor of Boston magazine. You can keep on top of the Kalak Ross Lee show at WGBH dot org slash Calla Crossley follow us on Twitter. Or become a fan of the Calla Crossley Show on Facebook. Today Show was engineered by Jane Pitt produced by Chelsea Merz will Rose left and Abbey Ruzicka This is the Calla Crossley Show a production of WGBH Boston Public Radio.