Massachusetts Casinos Threatened by State’s New 25 Percent Capacity Rule, Expert Warns

Posted on: December 23, 2020, 08:07h. 

Last updated on: December 23, 2020, 09:07h.

Massachusetts gaming floors will lower their capacity to 25 percent for two weeks starting on Saturday because of coronavirus risk, prompting concern over the casinos’ financial futures.

Restaurants and bars in casinos will also need to comply with the 25 percent cap
Massachusetts Gov. Charlie Baker, pictured above earlier this year. He recently lowered the capacity at several businesses in the state, which will impact casino gaming floors, too. (Image: Boston Globe)

The move has led to an admonition from a casino expert that the reduced occupancy could threaten two of the state’s three casinos that rely on slots for much of their revenue.

If a casino is dependent on slot machines for their revenues, then 25 percent capacity is a death warrant,” Boston College Professor the Rev. Richard McGowan warned on Wednesday. “If the casino is one that depends on high rollers, i.e, table games and large expenditures on food and entertainment, then it might not hurt as much.”

McGowan, who closely follows New England gambling trends, predicted to that Encore Boston Harbor “might be able to survive if the high rollers can still fly into Boston. MGM Springfield and Plainridge Park Casino will suffer a great deal.”

For instance, gross gaming revenue (GGR) at MGM Springfield already totaled just $10.5 million last month. November’s GGR was a 40 percent decline from October when the casino won $17.5 million.

November also represents a 47 percent year-over-year downturn compared with November 2019, when MGM Springfield kept more than $19.9 million of gamblers’ money.

In contrast, Encore Boston Harbor reported a GGR of $27.3 million in November, down 33.5 percent from October and 42 percent from November 2019.

Plainridge Park Casino, a slots-only casino, saw its terminals win $3.7 million last month. That’s a 25 percent month-to-month loss, and a 31 percent year-over-year tumble.

Massachusetts Officials Have Little Choice

Richard McGowan confirmed that Gov. Charlie Baker (R) and the Massachusetts Gaming Commission (MGC) did “not really” have a choice on their decision given the health risk.

“If COVID is spreading this rapidly, it is hard to justify keeping casinos at 50 percent capacity while keeping churches at 25 percent,” McGowan explained.

Restaurants and bars in the state’s casinos will also need to comply with the 25 percent cap between Dec. 26 and Jan. 10, 2021. When it expires, the new capacity could be extended, reduced, or new regulations put into effect.

Previously, the casinos in Massachusetts had to operate at about 40 percent capacity, according to the Las Vegas Review-Journal.

Since Nov. 6, the Massachusetts casinos have been under a 9:30 pm closing time, the Review-Journal said. For several months, the three Massachusetts casinos were shuttered earlier this year as a way to curb risk from the virus.

Looking ahead, McGowan is hopeful the casinos could make it through 2021, given that coronavirus vaccines are beginning to roll out.

“Winter months are normally the slowest time of year for casinos, so if they can make it to the spring and COVID is finally under control, then the casinos will survive,” McGowan predicted about the three casinos.

The state’s three gaming properties will likely comply with the 25 percent capacity rule.

“We will continue to welcome our guests following this new capacity limit,” an MGM Springfield spokesperson told the Review-Journal. “Based on the capacity we’ve maintained since reopening, this should have little impact on our guest experience.”

Other non-essential businesses in Massachusetts were also placed under 25 percent capacity. Gov. Baker explained the move was needed, given the surge in coronavirus cases.

Our hospitals are now under significant pressure, and we’re heading toward another period, this holiday stretch, where we’re likely to see another significant increase in cases and hospitalizations unless everybody plays a very different game than the one we all played at Thanksgiving,” Baker recently explained in a press conference.

“As a result, we think it’s appropriate to take action now to slow that spread. And we must do so in a way that can avoid overriding our hospital system.”

Coronavirus Cases Continue to Mount

As of Tuesday, Massachusetts reported 3,293 new cases of COVID-19 and 43 additional deaths. That makes the total number of cases in Massachusetts since the outbreak began 318,143. The death total in the state is 11,549, WCVB, a local TV station, reported.

Also, casinos and many other businesses in Nevada are operating under a 25 percent capacity through the middle of January.