Mass. casinos may need Legislature’s help
Recent slots numbers indicate
I GET IT! Massachusetts is slowly beginning to emerge from the cocoon of the COVID-related shutdown of a significant portion of the Commonwealth’s economy. The effects of that shutdown have been felt across all ranges of business activity, especially our nascent gaming industry. I have read, with some amusement, the news stories touting the post-pandemic bounce in the casino gaming sector, buoyed primarily by an increase in gaming revenues at Encore Boston Harbor. But those results are not as rosy as some journalists would have you believe.
The true barometer of the success of a gaming establishment is its per machine per day slot revenue. If you breakdown monthly slot revenue on that basis, it allows you to compare a 31-day month with a 30- or 28-day month; or a 2,000 slot machine facility with a 1,200 slot machine venue. In short, it allows for an objective measure on an “apples to apples” basis with a common frame of reference, at least insofar as slot revenues are concerned.
When we look at the May 2021 slot machine revenue numbers, we see that – at Encore Boston Harbor – monthly slot machine revenues were up over April’s numbers by almost $1.5 million , which appears to be a positive sign. But May was a 31-day month and Encore was able to operate 843 more machines in May than in April (due to the easing of many COVID-related restrictions). While Encore earned $531 per machine per day in April, its slot machine revenues for May dipped to $369 per machine per day (a 30.44 percent decrease in revenues per machine per day). This should be a cause for concern by both the Massachusetts Legislature and gaming regulators.
MGM Springfield showed a relatively small decrease in total monthly slot machine revenues (almost $400,000), but when viewed through the lens of per machine per day slot revenues, we saw a 13.38 percent drop in revenue, from $516 per machine per day in April to $447 per machine per day in May.
By contrast, the two tribal casinos in Connecticut saw modest increases in total monthly slot revenues (they do not report table game revenues to the state of Connecticut) of $1.6 million for Mohegan Sun and $706,000 for Foxwoods, which puts total Connecticut monthly slot revenue for May at $77.6 million versus $60.2 million for Massachusetts with three gaming venues.
Foxwoods slot revenue, per machine per day, increased from $442 in April to $451 per machine per day in May, a 1.8 percent increase. Mohegan Sun saw a slight decrease in per machine per day revenue from $569 in April to $536 in May, a 5.8 decrease. The Foxwoods monthly revenue exceeded Encore Boston Harbor’s monthly slot revenue by $2 million, with 300 machines less than Encore. Mohegan Sun’s monthly slot revenue exceeded Encore’s by $14.4 million, almost 48 percent higher than Encore.
What do these numbers mean? That is tough to say. Connecticut is a much more mature gaming market
What do these numbers mean? That is tough to say. Connecticut is a much more mature gaming market than Massachusetts; and, as many would argue, Massachusetts is still a newcomer to the world of expanded gaming. However, both Connecticut and Rhode Island have taken steps to keep their gaming operators competitive, at least on a regional basis, by allowing for mobile sports betting and undertaking other measures designed to give their operators a competitive edge.It’s not easy predicting what will happen over the next three to twelve months, but it may be time for the Massachusetts Legislature to re-examine the provisions of the state’s gaming law to see what can be done to modify the regulatory environment of the gaming industry to allow Massachusetts casinos to compete more effectively with our neighbors to the south.
Paul L. DeBole is an assistant professor of political science at Lasell University.