A new report claims Connecticut casinos will lose $570m in gaming revenue per year if they aren’t given the proper tools to combat regional competition.
The report, commissioned by the tribes that run the Mohegan Sun and Foxwoods Resort Casino gaming joints, not unsurprisingly backs the tribes’ contention that they need to put ‘buffer’ casinos on the border with Massachusetts to fend off MGM Resorts’ planned $800m casino in Springfield. New casinos planned for New York State are also forecast to drink Connecticut’s milkshake in the coming years.
Mohegan Tribe chairman Kevin Brown says the report is part of “the education process” to convince state legislators to allow the tribes to open jointly run casinos off tribal lands. No concrete proposals have yet been introduced to the legislature but tribal lawyers are reportedly negotiating the broad strokes with the state’s attorney general.
The Pyramid Associates report commissioned by the tribes says Connecticut casinos will lose an additional $133m in non-gaming revenue per year by 2019. The downturn will result in the loss of up to 5,700 jobs by the end of the decade as gamblers in neighboring states choose gaming options closer to home. The report says Connecticut is facing a decline “second only to the transfer from New Jersey’s casinos to Pennsylvania’s casinos that occurred from 2006 to 2014.” During that time span, Atlantic City casinos’ annual gaming revenue shrunk 48%.
ATLANTIC CITY PROFITABILITY IMPROVES
It’s true that the dominant narrative surrounding Atlantic City over the past few years has been one of unending gloom and doom, but a rare beam of sunlight poked through the clouds on Tuesday. While four AC casinos shut their doors last year, the Division of Gaming Enforcement (DGE) reported that the eight surviving casinos saw their profitability improve by 12% in 2014.
The eight survivors reported a collective gross operating profit of $391.6m, up from $349.4m in 2013. The Golden Nugget posted the biggest year-on-year profit turnaround, rising to $4.5m from a loss of $10.4m in 2013. The Tropicana was the runner-up among the year-on-year gainers, rising 125% to $59.8m. Resorts Casino Hotel went from a $12.3m loss in 2013 to a $2.5m profit while the Borgata posted the biggest annual profit of $158.4m, up 30.3% year-on-year.
Caesars Entertainment’s three remaining AC properties were all in the black last year but their profits slid from 2013. Harrah’s dipped 4.6% to $97.4m, Caesars fell 14% to $59.8m and Bally’s slid 32.4% to $22.6m. The Trump Taj Mahal’s continued teetering on the edge of bankruptcy made it the year’s lone loser among the eight survivors, falling from a $20.1m profit in 2013 to a $1.1m loss last year.
The DGE’s stats also bestow a rather dubious designation on Caesars Interactive Entertainment New Jersey, the online arm of Caesars plying its trade in the state’s regulated online gambling market. While CIENJ routinely ranks second in the state’s monthly online revenue charts, the enterprise reported a net loss of $12.5m in 2014.
