Massachusetts Four Years On and Counting

The Massachusetts gaming commission released the revenue numbers for the racino in Plainville, Massachusetts on November 16th. The 1500 slot machine racino had $58 million in coin-in and $12.9 million in net revenues, a $277 win-per-day. All of the media outlets reporting cited the declining win per day and the Penn National property’s failure to meet pre-opening forecasts.

Plainridge Park Casino generated $12.9 million in gross gambling revenues in October, the figures reflect a slight decline. Daily revenue per slot machine has steadily declined from $389 in July to $277 in October. The racino has generated over $65 million since opening in late June. Associated Press, 11-16-15

The revenue announcement could almost be considered a birthday card to gaming legislation in the state. On November 22nd the Act Establishing Expanded Gaming in the Commonwealth celebrates the fourth year since the governor put his signature on it. The act was optimistic, it promised: “thousands of jobs for Massachusetts residents while also generating $300-$500 million in new revenue for the Commonwealth.” The act created a rather complicated process, but it still garnered a great deal of support in the state and within the gaming community. After all, how could casinos in Boston and Springfield fail to be anything but spectacular successes?

On November 22, 2011, Governor Deval Patrick signed Chapter 194 “An Act Establishing Expanded Gaming in the Commonwealth,” legislation designed to provide significant benefits to the Commonwealth by advancing job creation and economic development. Massachusetts Gaming Commission

The legislation includes a number of key principles to ensure the successful implementation of expanded gaming. The principles include: a transparent and competitive bidding process, maximum long-term value to the Commonwealth, protection for host and surrounding communities, mitigation for social impacts and costs and ensuring the nation’s best and most rigorous public safety, regulatory and enforcement mechanisms. Massachusetts Gaming Commission

That premise may still be valid – but after four years there is just one casino – the Penn National Plainridge Park slots only racino – and it only has 1500 slot machines. The property is currently generating a mere $12-14 million a month in revenue; the state gets 49 percent of that. Since Plainridge opened on June 24, 2015 the Commonwealth of Massachusetts has earned a whopping $31.8 million from legal casino gambling within its borders.

Today the promises of the act read like a medieval horror tale and it may get worse. The next casino scheduled in Massachusetts is the MGM project in Springfield; the opening is planned for 2018. It was originally planned for 2017, but MGM asked for a year delay. It has also asked for permission to reduce the size of project by 14 percent. However, that is getting pushback from the gaming commission and the city of Springfield. The politicians, bureaucrats and businessmen do not see the same future. MGM can see the future is far less certain and much less profitable than it saw in 2012 when the company embarked on its efforts to gain a license. If MGM foresees less revenue, its lenders will most certainly see even less and balk at the cost of project.

The other project that has been granted a license is Wynn in Everett. Wynn is mired down in litigation with the city of Boston and governmental approvals and anticipates a 2019 or 2020 opening, much later than MGM. There are two additional possibilities for casinos. Mass Gaming & Entertainment has applied for a license for Brockton, but the gaming commission says it will not rule on the application until sometime in 2016. Additionally, there is the possibility of an Indian casino. The Mashpee Wampanoag Tribe has only recently had land placed into trust and expressed its desire to have a casino. However, that will be a long, twisted and highly contested path for tribe.

Massachusetts may no longer represent a cash bonanza for casino developers…Signs of trouble abound. MGM recently announced scaled-down plans for its project in Springfield. Legal battles continue to dog Wynn Resorts’ plans for an Everett facility and state officials are sorting through dueling proposals for casinos southeast of Boston. Derrick Perkins, New Boston Post, 11-13-15

While the Commonwealth is stuck in the quicksand of regulation, bureaucracy and a lack of urgency, Rhode Island and Connecticut are moving ahead to put slot machines as close to the border with Massachusetts as possible. Twin River casino in Rhode Island is asking the state to allow it to open a new facility on the border to fight against the casinos in Massachusetts and the casinos in Connecticut are engaged in the same process. And, New York is in the process of licensing at least three additional casinos in that state; talk about kicking a guy when he is down. It has only been four years, but conditions in Massachusetts and on its borders have already changed dramatically. That is the good news, it will be another three years before a second casino can open and that is the bad news. It is not a rosy picture to put on a birthday card.


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