Nevada casinos wrangle with Buffett; Mashpee Wampanoag take the lead

We’ve written about the solar-panel installation atop Mandalay Bay‘s convention center and now the 20-acre array — soon to be the United States‘ largest — is making international headlines. The high priority on solar power at MGM Resorts Mandalay-Bay-picInternational puts a spotlight on the company’s battle with NV Energy, from whose grid it would dearly like to extricate itself. MGM alone consumes some 7% of the utility’s power output and NV Energy maintains that residential customers would have to bear burdensome rate increases if MGM weren’t dunned handsomely for the privilege of taking its energy business elsewhere. Not only is MGM using solar power to lower its dependence on NV Energy, it’s replacing no fewer than 1.3 million light bulbs with energy-conserving LEDs.

In NV Energy’s defense, American Solar Energy Society economist Bill Ellard asked The Guardian, “They need to maintain the grid. You cannot let these utilities go bankrupt or else every business in the city dies. What will happen if they don’t maintain the grid properly and the transformers blow?” (If that sounds fanciful, be warned that there was a major blowout in Chinatown last Sunday.) MGM, and other companies which have turned to compressed natural gas as an energy source, are putting further pressure on NV Energy to maintain current revenue levels. “It’s natural gas, wind, coal, smart grid, big data, oil – it’s all connected. We’re at this next change point where wind and solar [battery] storage and smart software are going to start to replace all those energy sources,” said Ellard.

While MGM and Las Vegas Sands mull their legal options, Wynn Resorts has taken NV Energy to court, accusing owner Warren Buffett of price gouging. “The PUC has simply made up rules as it goes along so as to discourage any applicants from exiting [its] service.” Las Vegas struck a Faustian pact by going to an all-renewable policy for civic infrastructure — at the price of buying solar power from NV Energy’s Boulder City array. In the meanwhile, MGM, Sands and Wynn are being given pause by the $126.5 million it would collectively cost them to wean their operations from NV Energy’s teat.

* South Korea‘s not looking like the next Macao — not when it’s coming off a 10% gaming-revenue decline, and is looking at competition from new Macanese casinos and ones in the greater Vladivostok area. Fitch Ratings says a trio of tourist-only casinos
Inspirenear Incheon International Airport “will have difficulty achieving robust returns on investments … Fitch believes chances that locals will be allowed to gamble elsewhere in the medium term are remote based on our conversations with the country’s officials and incumbent operators,” added the report.

That’s not good news for Mohegan Sun and KCC Corp., whose Inspired megaresort is budgeted at $1.6 billion just for its initial phase and will open well behind — three years behind — a $1 billion Paradise Co./Sammy Sega casino scheduled to debut next year. On the bright side,“Incheon International Airport is one of the most heavily trafficked airports for international passengers in the world.” Although a Caesars Entertainment/Lippo Group project is theoretically still alive, it’s been inactive for some time now and doubts have been voiced over whether it will ever get off the ground. According to Fitch, the best hope for these projects is keeping other casino development limited and for Japan to continue to fail to legalize casinos. (No problem there.) Also, while not eligible to play in the casinos, locals may well flock to the retail and amusement attractions offered at Incheon.

In Massachusetts, the Mashpee Wampanoags are treating their Taunton casino, Project First Light as a fait accompli. The tribe will hold a groundbreaking next month and begin site work on April 5. Meanwhile, the Massachusetts Gaming Commission is waiting until late April to decide the fate of the Region C gaming license, the Bay State’s last. The MGC might look favorably on Taunton, where the community has been supportive of the Wampanoag, as opposed to Neil Bluhm‘s proposal for Brockton, which has aroused vehement local opposition.

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