Conn. Gambling Industry Not So 'Recession-Proof'

Gambling is among the industries feeling the effects of the economic downturn — even though it has long been thought to be "recession-proof."

In southeastern Connecticut, the local economy is heavily dependent on two huge casinos that provide 20,000 jobs between them. They saved the area in the mid-1990s, when it was hit by defense industry layoffs.

Now, the casinos are feeling the pinch in turn.

The Mohegan Sun casino is one of the world's largest and a multimillion-dollar business for the Mohegan Tribal Nation. Just a few months ago, the tribe opened what it calls the Casino of the Wind as part of a planned $700 million expansion.

The Casino of the Wind looks busy, but slots revenue for the tribe has been slipping steadily. Retiree Dot Fisher says she and her husband used to be regulars — now they limit their visits.

"We just decided we don't want to spend as much money," Fisher says. "You know, we don't spend a lot anyway. When you're on a fixed income, you got to think."

Construction Slowdown

Right next to the casino complex is a massive construction area, where two cranes dominate the landscape. But the site is now all but deserted.

Ed Riley of the Ironworkers Local 15 says the area is the foundation for what was to have been a 900-room hotel, shops, restaurants and an entertainment complex.

"Several weeks ago, I got a call from the tribe on a Monday night that, in fact, due to the severe economic downturns, and what was going on in the economy, that the construction would have to be postponed," Riley says.

There would have been 1,200 construction workers employed at the site. Keith Brothers of the Laborers Local 547 says the fact that the gaming industry is under pressure is hugely significant in the region.

"With the work opportunities not there — I mean, our people have to go to work somewhere," Brothers says. "They go to work, whether out of state [or] they go to work somewhere else in the state. But as far as the gaming industry goes, for us, it's kind of our lifeblood down here."

'A Domino Effect'

Just eight miles away is Mohegan Sun's biggest competition, Foxwoods Resort Casino, owned by the Mashantucket Pequot Tribe. On Oct. 17, the casino handed out pink slips to 700 employees — the first large-scale layoff in its history.

"It's tough for some people to have to come through our doors," says Candace Bodenhofer, a social worker in nearby Norwich, where many casino workers live. "They're not used to having to ask for assistance."

The casinos are by far the biggest employers in the area, and Bodenhofer says the outlook for many of those laid off is bleak.

"The gentlemen that I saw today is 57, and he doesn't have a lot of skills — he was a groundskeeper, so, you know, people aren't going to be batting down his door to hand him work," she says. "If he goes to work for a landscaping firm, for instance, he will be making maybe the same amount of money, but he won't get any benefits. So then, you know, his health may suffer. ... It's one thing after another, kind of a domino effect."

The dominoes may fall on East Main Street in Norwich, where there are many small businesses that rely on the dollars put into this economy by the casino — the pizza parlor, the liquor store and Paul's Auto, where owner Paul Heard is concerned.

"It can't be a good thing. I mean, I have a good percentage of customers that work there, so I just hope that things — somehow they get the economy turned up a little bit and call people back," Heard says.

Beverly Goulet, who runs Human Services in Norwich, says it won't be easy to help those laid off.

"No way do we have any local money that could go beyond what already our regular needs are for families and individuals in this area," Goulet says. "We don't have any discretionary money."

The state of Connecticut derives revenue from the casinos under an agreement with the two tribes, and gaming revenue to the state is forecast to fall by $60 million this year. And that means less cash to help those most directly affected by the downturn in this key industry.

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