Foxwoods Underwater, Just Like Many Homeowners

March 16, 2012
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Think you have financial problems with your home that is worth less than the mortgage?

Check out Foxwood’s problems:

“These days the tribe is dealing with the latest improbability in its turbulent history: financial havoc. The casino is underwater, like a five-bedroom Spanish colonial in a Nevada subdivision. The Pequots misjudged the market, borrowed too much and expanded unwisely. Foxwoods’s debt is on a scale befitting the size of the property — $2.3 billion,” writes the New York Times about the Ledyard mega-casino that provides thousands of  jobs for Connecticut residents and hundreds of million in revenue to the government.

The Times story says Foxwoods with 6.7 million square feet is bigger than the Pentagon. But with competition from the Mohegan Sun and soon from others, the billions it spent on expansion – like we did with our homes – will bite them.

“Foxwoods has had its own in-state competition since 1996 from the Mohegan Sun, which lies just west, across the Thames River. Owned by the Mohegan Tribe, it is a more modest property, though only by comparison — Mohegan is the second-largest casino in the hemisphere. In October, a casino opened at the Aqueduct racetrack in Queens with 4,500 slot machines, and Gov. Andrew Cuomo is pushing an expansion plan for the site that includes a hotel and what would be the nation’s largest convention center. And lawmakers in Massachusetts recently voted to issue licenses for a slots parlor and three full resort casinos — an especially ominous development for the Connecticut casinos, which draw about 30 percent of their clientele from Massachusetts, because many gamblers are ruled by what is known in the business as the law of gravity. They stop where the pull is the strongest, which is usually the nearest casino.”

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