The Trouble With Massachusetts Casino Revenue – A Rebound in 2022
What’s The Trouble With Massachusetts Casino Revenue? Lately, not much! December statistics reported a $95.66 million casino win, just shy of the state’s monthly best of $95.71 million set last July. But, in 2019, the lofty revenue predictions from the two industry giants awarded casino licenses in Everett and Springfield were yet to materialize. Instead, Encore Boston Harbor and MGM Springfield had underachieved the expected monthly revenue.
Here’s that story and the 2022 update.
The Need For Casinos in the Commonwealth
After years of watching revenue cross the border south to Connecticut and Rhode Island, Massachusetts wanted a piece of that lost financial pie. Subsequently, the Expanded Gambling Act of 2011 paved the road for casinos and casino revenue in Massachusetts. According to their reputation and expected revenue, the Massachusetts Gaming Commission chose Wynn International and MGM International as the two major casinos.
MGM’s Underperformance – Trouble With Massachusetts Casino Revenue
The “industrial chic” downtown casino MGM built in Springfield, MA., was only two years old.
Since its opening in late August 2018, MGM Springfield has brought in less than two-thirds of the $418 million in gross gaming revenue MGM executives told the state the casino would bring in during its first year. The casino’s gross gaming revenue was $273.8 million from its opening on Aug. 24, 2018, through the end of August 2019.
MGM Springfield defended the estimate as realistic at the time. But unfortunately, the Massachusetts Gaming Commission believed then and today that the regional casino market is saturated now.
Since 2019, the MGC has also denied the Brockton license. The Taunton license for Region C, Wampanoag’s Tribal casino, was going nowhere, and a new casino in Wareham met with little interest. (Recently, the Wampanoag’s casino hopes have risen like a phoenix from the ashes, to the dismay of the Taunton community.)
MGM’s appeared in New England with arrogance, implying, “if WE build it, they will come.” While MGM did an excellent job of representing Springfield’s history and culture, MGM International realized the casino model used by MGM in Las Vegas isn’t a “one property fits all” model. It wasn’t an excellent fit for New England, for sure.
Connecticut’s Casino Loyalty Underestimated
MGM admitted another mistake in 2019. “This market has some powerful competitors that have been in the market for 20-plus years,” said Mike Mathis, the previous head of MGM Springfield. “…I think we underestimated that level of loyalty and what it would take for those customers to give us a shot.”
The $960 million MGM Springfield was expected to be a threat by the Mohegans, who run the Mohegan Sun, and Mashantucket Pequots, who operate Foxwoods Resort Casino. So, both CT. Tribes joined to build a single property – Tribal Winds Casino in East Windsor on the CT / MA border – by Foxwoods & Mohegan Sun. Would there be a battle at the border?
In 2021-2022, The Connecticut tribes and CT Governor ironed out a new sports gaming and igaming agreement. So, both Mohegans and Pequots in Connecticut are shutting down their interest in Tribal Winds Casino in East Windsor on the CT / MA border. The Connecticut tribes can still build a Bridgeport casino, but there is no interest.
A Change of Heart and Design
If one thing is constant in the casino business, it’s “change.” So MGM Springfield, in 2020, reached out to answer their patron’s concerns. Changes on the casino floor at MGM Springfield included:
- Additional Video poker (although the paytables are less than desirable) diminishes the Royal Flush from the original 1000 credits.
- Added VIP Lounge – however, the space is small, without a bar, and limited food items. Additionally, it is only open to Platinum and Noir cardholders, with many Gold card members up in arms.
- I added another bar with VIP bartops – same paytables.
- Added multiline VP machines, some with $.05 minimums, a definite plus.
- Took out 700 slot machines, making more space and a more comfortable ambiance
- The addition of Stadium gaming and electronic table games
- The 5th floor of the hotel was turned into suites.
- Better table games rules and minimums.
2021 MGM Springfield Changes
Casino floors across the country went through lots of negative changes. But unfortunately, MGM Springfield, as well as the rest of New England’s properties, was not immune to startling changes.
- The VIP Lounge was closed and never reopened.
- Pai Gow Poker was taken off the floor and will not return.
- The beautiful Poker Room and the Commonwealth Bar were temporarily transformed into slot rooms.
- The Hotel closed and would not open until late 2021.
At least as of 2022, the hotel is entirely open, and the Poker Room and Commonwealth bar have returned to their 2019 status.
Encore Boston Harbor Low Gaming Revenues Unexpected
Wynn Resorts’ $2.6 billion Everett casino saw its lowest gaming revenues in October 2019, only earning $45.8 million in gross gaming revenue.
According to Paul DeBole, a political science professor at Lasell University who studies the industry, Encore has seen an abnormally high ratio of table game revenue to slots since opening. Most casinos typically see 60% or 70% of their revenue come from slots. Encore’s table games exceeded expectations by accounting for more than half of gross gaming revenues. In addition, table minimums were higher than in any other casino in New England. Wynn Resorts’ reputation as an upscale casino catering to high rollers worldwide caused the early partial success. But Wynn Resorts now agrees that a Las Vegas Resort casino is wrong for Boston.
“The last thing we want to do is be a Vegas casino in Boston. We want to be Greater Boston’s hometown casino.”
Brian Gullbrants, Encore’s new president
Encore Boston Harbor Changes – The Trouble With Massachusetts Casino Revenue
Related Post – Encore Boston Harbor Is the Gem of New England
Those changes to make Encore Boston Harbor “Greater Boston’s hometown casino” would include:
- $15 table game minimums
- free self-parking
- a tiered Rewards system offers rewards for a variety of players
- lower room rates – sales down to under $200, compared to opening rates of around $600.
- A bright red food truck appeared on the gaming floor – Encore Cantina offers affordable dining, with such options as nachos at only $7 a pop.
Encore’s goal continues to provide quality at a price point that appeals to every market.
Trouble With Massachusetts Casino Revenue – No Trouble, No Mo’!
The long-term viability of these two properties was still too early to predict – until winter 2021 started. However, both industry giants are figuring it out as revenue is ramping up nicely.
In December, Wynn Resorts’ Encore integrated resort in Everett led the way with a GGR of $62.4 million. MGM Springfield was a distant second at $22.2 million, and the slots-only Plainridge facility accounted for the remaining $11 million. Since the state liberalized gaming, casino taxes, associated fees, and assessments have benefited the commonwealth to $971 million.
Related Post – Amazing Comeback by Massachusetts Casinos
Summary
The pandemic began to show signs of subsiding, and all three Massachusetts casinos rebounded well. MGM Springfield has added Wahlburgers down the block, and Agawam’s favorite Macho Taco is opening a location in MGM Springfield’s South End Market.
Encore leaked plans to build its first project on those 13 acres: a block consisting of a 1,800-seat indoor events venue, a two-story restaurant, and a 2,200-car parking garage connected to the casino across Broadway by a 425-foot-long enclosed pedestrian bridge. But recently, Encore pulled back since the property across the street is not part of the regulated casino site, making it an issue that may ultimately need to be decided by the gaming commission. So we may not see that expansion at all.
But, conditions are improving with all nine New England Casinos. The only missing initiative is returning the workforce, which might be well-timed for February through April, preparing for a big summer in 2022.
So, let the New England casino competition continue.
Binbin
