Northeast Casino Saturation – Here We Go Again

“Northeast casino saturation looms in the background of MGM Springfield opening.”

That’s according to Howard Stutz, Executive Editor, CDC Gaming Reports. In his article on  August 21, 2018 he goes on to write, “See if this sounds familiar. At a gaming conference in Atlantic City, a panel debated the casino saturation point for the Northeast U.S. gaming market.  “There’s a finite amount of gaming revenue out there,” said one panelist. “We are in a very volatile time and we’re in a frenzy of gaming expansion. It needs to stop.”

“Those comments were made three years ago.”

We have heard this since Maine opened a second casino, and wanted a third.  It was said by opposition to the Massachusetts Casino Law.  The demise of 5 casinos in Atlantic City started saturation talk as Pennsylvania added numerous casinos.  The Massachusetts Gaming Commission is still considering keeping only three casinos instead of the original four, worried that the the additional southeast Mass. license would cannibalize Encore Boston Harbor and Plainridge Park patronage. Rhode Island’s legislators are also concerned about the impact on Rhode Island’s Twin River and Tiverton Casinos.

Stutz writes “MGM expects to draw business from Massachusetts communities – Springfield is 90 miles west of Boston. At the same time, the property will try and poach business from Connecticut’s two large Indian casinos, Foxwoods and Mohegan Sun. Springfield is just 26 miles north of Hartford, Connecticut, and roughly 70 miles from the two casinos……The whole Northeast has been on a casino development streak since long before Massachusetts passed its gaming legalization plan, with casinos opening in Pennsylvania, Delaware, Maryland, New York, and Rhode Island.”

Since 2015, the following has happened:

MGM National Harbor

  • MGM National Harbor opened in Maryland
  • Resorts World Catskills opened (80 miles northwest of New York City.)
  • Plainridge Park Racetrack, & MGM Springfield opened
  • Oxford Casino, Maine opened its hotel with casino expansion
  • Twin River Casino will open its hotel and has already moved the Newport Grand operation to the MA/RI state border battle lines with their new Tiverton Casino & Hotel
  • Pennsylvania approved the addition of “mini-casinos” to the 12 brick-and-mortar casinos which are raking in record gaming revenue from their existing operations.
  • New York State has added three casinos, but have under-performed so far.\
  • Resurgence and growth in Atlantic City with Ocean Casino Resort & The Hard Rock Cafe Casino Resort opening in place of the closed Revel and Taj Mahal, respectively.

Will Encore Boston Harbor, a true destination resort, with table games and other expanded amenities, be considered the final straw in the New England Camel’s saturated back?

Connecticut’s two immense resorts, Mohegan Sun Resort Casino & Foxwoods Resort Casino, are expected to feel the brunt of all this expansion. Revenues dipped in September with the opening of MGM Springfield, but no where near what was expected. Michael Pollock, managing director of casino industry consultant Spectrum Gaming Group doesn’t believe Foxwoods and Mohegan Sun will succumb to the new competition.

“The existing properties [in CT] are not without their arsenal,” Pollock told the Hartford Courant. “Both … have made significant capital investments in their properties. They have their own databases covering a huge swath of New England. They are going to be leveraging that.”  After visiting and staying at MGM Springfield, I truly feel the MGM name and its vast MLife members will be what keeps it on the cusp of being called a “destination casino.”  Next year when MGM completes its acquisition of Empire Casino and Yonkers Raceway in New York – just 15 miles north of Times Square and the heart of Manhattan – we could be discussing the “S” word again.

And then there are always the improbable, but still breathing, additions of:

First Light

First Light Resort Casino, Wampanoag Tribe, Taunton

  • Mashpee First Light in Massachusetts (although it seems to be on it’s last leg)
  • The 4th SouthEast MGC casino license in MA (delayed by MGC)
  • The MMCT joint venture for an East Windsor casino by Mohegan & Foxwoods tribes (which received a huge blow by federal court)
  • THE MGM BRIDGEPORT RESORT (CT’s gambling laws would have to be rewritten, with the state losing all of its revenue from the tribes)

A related posts you might find interesting is

“CASINO SATURATION IN THE NORTHEAST 2017” by NETG  and

“Northeast’s casino landscape growing crowded” by

Brian Hallenbeck

In Martin Derbyshire’s fascinating post for PLAYUSA.com, entitled “ARE NORTHEAST CASINOS REACHING A TIPPING POINT?” he writes, “So many casinos have been built across the Northeast, market saturation looks like its right around the corner.”

After seeing 150,000 enter the MGM Springfield opening, I don’t see the corner yet.

Binbin – “Embrace the math in Gambling, not the myth!” 

Referendum for Maine’s Third Casino Arriving Soon

A rendering of the proposed York County Casino, courtesy of the Portland Press Herald

According to  Scott Thistle of the Portland Press Herald, “a relatively small number of voters will decide whether to expand Medicaid and approve a casino in York County in November…..But if 2017 ends up looking anything like 2011 – the last year voters had no statewide races to decide except ballot questions on casinos – then less than half of the state’s registered voters will cast ballots.”  There is still a question whether the Pro Casino will get permission for absentee voting, and reeking havoc with the low voter turnout.

Overall voter turnout in 2011 was 43 percent, as voters decided against two casino ballot questions for Lewiston and Biddeford.

Shawn Scott, on the right, with attorney Courtesy Herald Press

It seems like the casino thing in Maine is like washing your hair – mix shampoo in hair, rinse out shampoo for clean hair, and repeat. However in Maine, they are always seemingly rinsing out the dirt from Shawn Scott & Co.

Economic experts continue to be skeptical about the York County casino bringing more than 2,000 jobs and $45 million in annual tax revenue to the area.  After all, the building of Oxford Casino included the prediction of $60 million in annual tax income, but has only produced about $32 million annually.

And then there is the referendum that is written to allow only one person, Shawn Scott, to apply for a permit to build a casino at an unspecified location in York County. Scott is an international gambling entrepreneur who won voter approval to add slot machines to Bangor’s struggling horse track in 2003. He then sold those rights to Penn National – which still operates what is now Hollywood Casino – for $51 million as regulators scrutinized his businesses and associates.  For a related articles, click on Maine’s Third Casino A Bad Bet  and Maine’s Third Casino – The Ultimate Scam Allowed by No Legislative Policy

Hollywood Casino, Bangor MaineThere are some who consider Hollywood Bangor a rousing success, and a great example of how casinos can help communities keep taxes down, create new jobs, spur tourism and economic development and generate additional funding for critical education, health care and agriculture priorities.  But, this is the same property that was asking for property assessment reduction in a dispute with the city of Bangor? The lower assessment that resulted from those talks stemmed largely from Hollywood Casino’s declining revenue since the opening of its main competitor, Oxford Casino. Rousing success?  Hollywood has had its slow times over the years.

Progress For Maine wants casino legislation

So, NETG still thinks that a third casino closer to Wynn Boston Harbor (Oxford & Hollywood are more north) will not be able to compete and will not do what the pro-casino group Progress for Maine wants.

Here’s the rundown on the vote:

Maine Question 1, the Casino or Slot Machines in York County Initiative, is on the ballot in Maine as a indirect initiated state statute on November 7, 2017.

“yes” vote supports this initiative to authorize the Maine Gambling Control Board to accept an application for a license to operate slot machines or a casino in York County, Maine.
“no” vote opposes this initiative to authorize the Maine Gambling Control Board to accept an application for a license to operate slot machines or a casino in York County, Maine.

The third casino’s window in Maine has closed. Another option for expanded gambling is needed to take the place of a full casino in southern Maine.

Binbin

 

Gambling Saturation Still A Concern In New England

At least two to three times each year, someone brings up the “S” word concerning casino gambling in the northeast:

SATURATION

“Casino Saturation” is a concern everywhere in the U.S.  Between the Lottery, Tribal & Commercial Casinos, 43 states have casino legalized gambling. As the debate about online and fantasy gambling continues to be battled out, it seems more gambling instead of less is America’s yearning.

When Oxford Casino in Maine was built, saturation was mentioned since there was already a casino in Maine – Hollywood, in Bangor.  It was feared that the two would financially cannibalize each other without enough gamblers for two casinos. But, both continue to survive.  Within the past two years, one study suggested that Maine could withstand another casino, but was dismissed twice by the Maine Legislature.

New Hampshire continues to visit the casino option, but has had it defeated 4 times mostly due to the possible competition with Massachusetts gambling properties.

Massachusetts excluded the Brockton Southeast Gaming License due to the Wampanoag Casino in Taunton and the many stages of flux it was in.  Two large casinos in Southeastern Mass. was considered too much by the Massachusetts Gaming Commission.

Rhode Island continues to move casinos around and is building a hotel for Twin River to compete with Massachusetts and Connecticut.

ALL BECAUSE OF THE FEAR OF CASINO SATURATION!

Connecticut studies, ironically made by MGM, suggested another casino in southwestern CT would be a plausible candidate for casino expansion, as Mohegan & Pequot tribes start plans for their joint casino near the border of MGMSpringfield.

In his articleGrowing Gambling Facilities In The Northeast U.S.: Is There A Market For Them All?, Elliott R. Morss provides tables of gaming progression in select casinos, including Wynn & MGM. The article implies that the survival of both Mohegan Sun and Foxwoods is in jeopardy.  Why:

The old casino model of 80/20 – that’s 80% from gambling revenue and 20% from entertainment, dining, etc., – is changing to a more “integrated resort development” in new casinos.  Both Wynn & MGM are building newer casinos in New England with that in mind. For a related post, click on our article MGM Springfield Casino Will Be an “Urban” Casino.

However, as we started, isn’t this the same worry we’ve heard for years?  While the CT casinos have felt the pinch and haven’t fully recovered from the 2007 Recession, they continue to diversify and look to additional interests in the “integrated resort” concept.  And both have cut gambling machines and tables down to more manageable numbers.

Mohegan Casino Resort near Airport. Project is licensed in Korea.

Mohegan Sun continues it’s quest for a casino in Korea, and developing a large swath of land across the river from its casino that will include retail, housing and more.  Foxwoods has added more thrill rides and continues to re-invent itself.  CT Casino #3, the  MMCT third casino in East Windsor still has big old MGM worried, or they wouldn’t be still trying to stop it through the courts.

So, I say gambling is increasing – in New England, in the east, all over the country.  There isn’t a finite number of gamblers.  The pie just gets larger.  With the soon-to-be-changed law on sports betting, more opportunities will be available for CT, MA, RI & the rest of the northeast.

Wynn, MGM, Tiverton will all serve different purposes and different players. Let’s see what the future of gaming in New England holds before we once again think the sky is falling!

Binbin