Connecticut Casinos See Ongoing Slot Revenue Decline, Neighboring State Competition, Less Disposable Income Blamed
Posted on: February 19, 2019, 09:38h.
Last updated on: February 19, 2019, 09:38h.
Connecticut’s Mohegan Sun and Foxwoods casinos are both seeing drops in slot machine revenue for the seventh straight month. And the continuing free fall comes as no surprise to experts who follow industry trends in the area.
More out-of-state options and less extra gambling bankroll are to blame, industry watchers say.
It is not surprising at all,” said the Rev. Richard McGowan, an associate professor in the Finance Department at Boston College, and who has written several books on the ethical and historical implications of gambling in America. “The MGM in Springfield … was clearly going to hurt the two Native American casinos, even though [that] MGM is not doing as well as they had anticipated,” he told Casino.org.
MGM Springfield earned just $19.7 million in gross gambling revenue in January, the lowest figure yet for the casino since it opened last August. And as of November 2018, Connecticut residents can also go to nearby Rhode Island for sports betting, an activity which McGowan says attracts a younger demographic.
Wider issues are at play as well, such as Connecticut’s “shrinking economy,” according to Fred V. Carstensen, professor of finance and economics at the University of Connecticut, where he is also the director of the Connecticut Center for Economic Analysis.
The state’s economy shrunk by about 10 percent in the last decade, Carstensen told Casino.org.
“That translates into household incomes that are stagnant or declining in real terms — so Connecticut households may simply have less discretionary money to spend on gaming,” he said. Looking at the big economic picture, Carstensen said the overall Connecticut revenue system “is dysfunctional.”
Less revenue from slots means fewer taxes to the state’s general fund under the tribes’ compacts with Connecticut, where 25 percent of slot revenue is alloted. Revenue from the two casinos has been declining for nearly 10 years, Carstensen said.
Foxwoods and Mohegan Sun have become more reliant on Connecticut players, too. Originally, the two casinos were generating 70-75 percent of their revenue from out-of-state gamblers, Carstensen told Casino.org.
Currently, the two tribes are attempting to open new casinos on off-reservation locations in both East Windsor and Bridgeport. But Cartenden argues that may make things even worse for Foxwoods and Mohegan Sun.
It is hard to see how casinos in either location would do … more than pull even more activity away from the two existing casinos,” Carstensen said. “True, Bridgeport might pull more people in from western Connecticut and parts of the New York City metro [region], but competition is increasing in those areas as well.
“East Windsor would be a ‘convenience’ casino — but it is only 11 minutes from the much larger MGM casino in Springfield. Some number of folks might visit it once … ,” he added.
MGM is also trying to open a casino in Bridgeport and was set to acquire the Empire in nearby Yonkers, New York, but that sale was put on hold unexpectedly just two days after New Year’s by the New York State Gaming Commission (NYSGC) with no clear explanation as to why.
Connecticut State Rep. Steven Stafstrom told Casino.org that the new reports on gaming revenue are “just another indicator that Connecticut needs to do an open, transparent and competitive bidding process before operating any additional casinos.”
Last week, Mohegan Sun announced its take on slot revenue for January was $40.7 million, 9.4 percent less than it was one year before. That’s the lowest monthly slot revenue in 18 years. The casino gave $10.3 million last month to the state’s general fund.
Foxwoods announced it got $31 million from slots in January, an 8.5 percent drop from the previous year. It’s also the lowest one-month total in 25 years. Foxwoods gave $7.8 million to the state’s general fund in January.
Rodney Butler, the Mashantucket Pequot tribal chairman and interim CEO of Foxwoods, blamed most of the drop in January slots revenue on bad winter weather and the new sports betting at Rhode Island casinos, rather than the MGM Springfield, The Day reported.
Related News Articles
Related News Articles
June 17, 2022 — 2 Comments—