N.E. gaming market is not saturated yet

Slot growth suggests the market is still growing

A YEAR AGO I would have said the gaming market in New England was saturated, with a relatively fixed number of customers bouncing between casinos based on promotions or geographical convenience.

But a closer look at the numbers, particularly at gross receipts for slot machines, suggests the market is continuing to grow even with nine gaming facilities in the region.

Over the last four years, gross slot revenue has kept rising. It grew 2.17 percent in fiscal 2017 compared to 2016, and .62 percent in fiscal 2018, before rising by 7.34 percent in fiscal 2019.

In fiscal 2020, which ended June 30, gross slot revenues nosedived 21.57 percent because of the shutdowns imposed by COVID-19. But when you correct for the shortened year, and extrapolate the data to reflect a full year, we see gross receipts would have increased by 10.72 percent.

These numbers are truly amazing and show the market is growing. One of the only ways to explain the bump in gross receipts over the past two years is to point to the entrance of three new facilities into the gaming market — MGM Springfield and Twin River Tiverton in August of 2018 (early fiscal 2019) and the opening of Encore Boston Harbor in late June 2019 (just prior to the beginning of FY2020).

These new entrants didn’t cannibalize the existing market. Instead, they helped it grow, presumably because the new facilities brought gaming options to new customers.

What we have in the six New England states is a $23.5 billion industry. If you factor in table games, it’s an estimated $35.25 billion segment of the regional economy.

Although COVID-19 creates uncertainty about gambling, these numbers have a strong bearing on the debate over whether the market can absorb additional casinos and where.  The attitude so far in New England has been every state for itself, with each state and its casinos competing for market share against other states and their casinos.

Meet the Author

Paul DeBole

Assistant professor of political science, Lasell University
Where do we go from here?  The market appears to show signs that it is continuing to grow and mature, but we know from experience that phenomenon will not continue forever.  Obviously, an optimal number of profitable gaming venues spread throughout the region is a laudable goal, but how should we do that?  If each of the New England states is looking to maximize its revenues, it may be time for a regional approach to the economics of this sector of the economy to allow for planned region-wide growth rather than mere patron swapping.

Paul L. DeBole is an assistant professor of political science at Lasell University in Newton.