The Fiscal Cliff looms as New England Casinos already try to regain financial momentum, especially Connecticut casinos. Travel expenses will cut into available bankrolls, general funds for recreation will be diminished, and players will be forced to stay closer to home. Let’s look at each states possible consequences:
MAINE – This may cause less of an increase in revenue for the two competing casinos (-) but many from the Pine Tree state may not be traveling elsewhere (CT, RI) to play (+). Maine Casinos could see the smallest decrease.
MASSACHUSETTS – Sending the economy over the fiscal cliff could cost Massachusetts more jobs than have been created in the past year(-). Jobs created by for the future casinos will be different from the jobs lost.job. These losses would be felt particularly in the state’s high-tech sector, where high-paying jobs in research and development would disappear. Moody’s Analytics, a forecasting firm in West Chester, Pa., predicted that the combination of tax increases and spending cuts would cost Massachusetts 74,000 jobs. “That is a huge job loss,” Clayton-Matthews said.(-) The change in jobs may cause the legislature to drag their feet in casino selection and postpone the decision to continue the process. Also, the players involved in getting licenced in Massachusetts (MGM, Caesar’s, Wynn, Mohegan Sun) may get cold feet if the state seems to be more of a “gamble” for success.(-)
RHODE ISLAND – A decrease in available luxury spending may keep the Ocean State’s faithful home, even in Newport! But their proximity to CT might not change where they gamble, just how much.(-)
CONNECTICUT – With both casinos having layoffs, and dealing with declining revenues over the last three quarters, the Nutmeg State may feel it the most. (–) New York still looms big, enticing CT’s gamblers. And Rhode Island’s Twin River continues to work on not only keeping it’s players at home, teasing CT gamblers and working on future prospects and a base of clients in Massachusetts before their casinos are up and running. The future seems rather difficult for the Sun & Foxwoods, although they continue to try different promotions, add shopping outlets and continue to offer the best concert talent of all northeast casinos.
Economists predict.Casinos nationwide could see their profits fall by as much as 10 percent if Congress and the White House fail to reach agreement to avoid a budget crisis, a top credit ratings agency warned Monday. Moody’s Investors Service said the gambling industry would be particularly vulnerable if Washington’s budget negotiations falter, leading to a series of spending cuts and tax increases that could harm consumer confidence and drive the country over the “fiscal cliff.”
“The gaming sector’s economic health depends entirely on customers’ discretionary spending habits,” Moody’s noted in a research report. “Even as the severe downturn during 2008-09 has faded, U.S. consumers remain under pressure from weak growth in their disposable personal incomes, as well as increasing living expenses. Any further drop in consumer confidence would keep even more potential gaming customers from spending their money at casinos.” Moody’s predicted that casino operating profits could decline between 5 percent and 10 percent if wary gamblers stay home. Atlantic City’s casinos, already suffering in the fragile economy, have seen their gambling revenue sink 8 percent in the first 11 months this year!
Let’s not forget hurricane Sandy that closed casinos in the northeast. Casinos are expected to take months to fully recover from the storm. Collectively, Atlantic City’s 12 casino hotels lost an estimated $5 million in gambling revenue each day they were closed in the hurricane’s aftermath.
Dear legislators, please do your job. We have enough economic “royal ” pains to deal with.