Running the casino numbers

Edge to Wynn, but do numbers add up?

Judging from this week’s deliberations by the Massachusetts Gaming Commission, the high-stakes battle for a Greater Boston casino license may hinge on which company can give the greatest boost to the local economy by attracting gamblers from outside the region. The edge so far has gone to Wynn Resorts, which has portrayed itself as a company that wants to build a very high-quality casino in Everett, attracting big-time gamblers from across the country and the world. Mohegan Sun, by contrast, has been dubbed a regional casino operator focused primarily on tapping local players.

One commissioner’s analysis of the economic impact of the two casino proposals gave a decisive edge to Wynn. According to the presentation, assembled by Commissioner Bruce Stebbins, Wynn would employ 1,210 more full- and part-time employees than Mohegan Sun, pay out nearly twice as much in wages and benefits, and spend $30 million more locally in the first year. Two-thirds of Wynn’s customers would come from less than two hours away, 14 percent would come from more than two hours away, and 24 percent would apparently come from farther distances and stay overnight. By contrast, 97 percent of Mohegan Sun’s customers would come from less than two hours away and only 3 percent would overnight.

Those numbers are powerful, which explains why Mohegan Sun responded to them forcefully on Wednesday, submitting letters to the commission that called the local purchase numbers “extraordinary” and attempted to refute the notion that it wants to build a low-rent casino in Revere targeting locals. The company said it will market aggressively to customers nationally and abroad, and suggested Wynn was overselling its ability to attract high-rollers to Everett.

While acknowledging Wynn draws lots of foreign visitors to its casinos in Las Vegas, Mohegan Sun CEO Mitchell Etess said Greater Boston is not Las Vegas. “It is not a town focused on a constant party atmosphere,” Etess said of Boston. “It does not have the same climate. It is a wonderful place steeped in culture and history that has its own unique appeal to visitors.”

Etess said Wynn’s “high-roller strategy” for Everett is iffy. How, he asks, will Wynn convince high rollers from Asia to fly all the way across the United States (and bypass Wynn’s properties in Vegas) to come to Everett, which Etess said is not convenient to the airport, located in a congested area, and relatively far from Boston’s restaurants and shops. “High rollers do not take the T and wait for shuttle buses,” he said. “This is especially true in the winter months.”

Etess also questioned some of Wynn’s numbers. Wynn’s consultants are forecasting that 1,427 “high-yield international players” will visit the Everett casino each year and lose nearly $72 million, or $50,000 on average per visit. “Our market review finds that no East Coast casino has ever sustained an international high yield average of $50,000 in play per visit, even when there was no competition whatsoever in the Atlantic City market,” Etess said.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Wynn is projecting 7.4 million visits in the first year to its Everett casino, which translates to an average of 20,274 visits per day. If 24 percent of those visits are overnight, as Wynn estimates, that works out to 4,785 overnight visits per day. It sounds great, but Wynn is only building 500 hotel rooms in Everett. Where are all these overnight visitors going to stay?

Wynn officials and several of the commissioners say the overnight numbers include people who are staying at other hotels in the Boston area and visiting Wynn while they’re here. But that sounds a lot like visitors who happen to be in the area and spend an evening at the casino. They should be counted as visitors to the casino, but it’s unclear whether Wynn should be credited for their overnight stay.