Is the Casino Industry recovering?
In Connecticut the two tribal casinos continued their five year decline in income. The New England Casino Gaming Update 2012 reported that none of the Casinos in New England did very well in 2011.
Newport Grand Slots in Rhode Island experienced its seventh consecutive year of decreasing net terminal income, and Hollywood Casino in Maine reported its first year-to-year dip in net slot income, with a drop of 3.6 percent, the report said.
Twin River, located in Rhode Island, was the only New England facility to report an increase, its total annual revenues growing 9.2 percent. The report attributes that growth to expanded hours of operation, the addition of virtual table games and improved nongaming amenities. It is also thought that high gas prices forced Rhode Island and Massachusetts gamblers to stay closer to home rather than traveling to Connecticut casinos.
“There is no question that the New England (and the Northeastern) gaming market is still being buffeted by the lagging effects of the great recession,” the report said. “But this is likely a temporary setback that is reversible once the economy enters a new growth phase and unemployment rates start to decline in the region.” Indeed the report said that “gaming revenues appear to be on the verge of stabilizing in 2012.”
The New England gaming market is “being reshaped at the margins by the larger Northeastern gaming market,” which includes not only New England states, New Jersey and New York but also the mid-Atlantic states—such as Delaware, Maryland and Pennsylvania—and Ohio. Combined, gaming operations in the Northeastern market generated $15.2 billion in 2011, according to the report. The top three states in terms of revenues are New Jersey ($4.5 billion), Pennsylvania ($3.3 billion) and Connecticut ($2.4 billion).
While gaming competition is heating up in the Northeastern market, the report does not note any significant shift in the state origin of patrons at Foxwoods or Mohegan Sun. The exception is the increase in the percentage of Rhode Island’s Twin River patrons originating in Massachusetts—which as of this February was 51.1 percent, compared to 46.8 percent at the same time in 2011, and 40.5 percent in 2006, when gas prices were much lower, near $2 a gallon.
But there could be more pronounced shifts to come. Among the factors that are currently in play are the opening of the Oxford Casino in Maine in June, three more casinos on the way in Pennsylvania, three casino-resorts approved in Massachusetts and other additions and expansions at various stages of the approval process in the Northeastern region.
One has to wonder how online gambling is going to affect the market and whether the availability of would be gamblers to be able to play 24 hours a day from their tablets, Laptop computers and Smartphones is going to continue to pull customers away from the Casinos. The consensus appears to be that the effect will be marginal as those who gamble in casino’s are hooked by the buzz and atmosphere of a Casino which is just not available online.