Boston (Reuters) – Foxwoods Resort Casino, North America’s biggest casino, announced plans on Tuesday to lay off 700 workers or about 6 percent of its work force, citing a drop in gambling and the weakening U.S. economy.
The 340,000-square foot casino in Connecticut, owned by the Mashantucket Pequot Indian tribe, is the biggest player in the thriving Native American gaming industry, which was worth more than USD 27 billion nationwide in gross revenues in 2007.
„As is happening to so many organizations, the economic issues facing our nation and regional consumer economy have negatively impacted our revenue growth,“ Tribal Council Chairman Michael Thomas said in a written statement.
The job cuts come just four months after Foxwoods opened with much fanfare a new USD 700 million skyscraper in the woods of Connecticut adjacent to the main casino. The MGM Grand at Foxwoods added 1,400 slot machines to Foxwoods‘ previous 7,200, as well as a new 4,000-seat theater.
„People are gambling less“ said tribe spokeswoman Lori Potter. „It’s been sudden.“
The credit crunch, combined with higher prices for energy and food staples, has sapped consumer spending power — a double whammy for casinos, which depend on customers with plenty of disposable income.
Gambling revenue on the famous Las Vegas Strip is down 6.5 percent in the year to July, recent data show. That’s hurt gaming giants such as MGM Mirage and privately held Harrah’s Entertainment — owned by private equity firms Apollo Global Management and TPG Capital LP.
At Foxwoods, gambling activity fluctuated over the summer before slowing sharply, Potter said. „There was a significant enough decline over just the past several weeks that we needed to make this adjustment,“ she said.
The Mohegan tribe, which owns the rival Mohegan Sun casino, last week announced plans to scale back a USD 734 million expansion project at that facility, citing the weak economy.
Foxwoods, which employs about 11,000 people, and Mohegan Sun generate combined annual gambling revenues of around USD 2.5 billion, according to the Indian Gaming Industry Report by Alan Meister, an economist with Analysis Group, based on 2006 data, the latest available.
The Mashantucket Pequots — numbering around 800 to 900 people — have given some USD 2.6 billion to the state, 25 percent of slot revenues, since the casino opened in 1992. As a sovereign nation, the tribe is not required to pay taxes or to make public its financial reports.