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Slot machine revenues, the main barometer of the local casinos’ financial health, told a sorry tale in July.
At Foxwoods Resorts Casino, the slots “win” — the amount of wagers the casino kept after paying out prizes — totaled $51 million, down 15.8 percent when compared to the same month in 2011, the steepest decline since December 2008, when Foxwoods’ win tumbled 19 percent.
Mohegan Sun’s July win of $60 million was down 10.4 percent.
“We thought it was going to be a tough month,” Scott Butera, Foxwoods’ president and chief executive officer, said.
But maybe not this tough.
While the calendar didn’t help — this July had four Saturdays and four Sundays compared to July 2011’s five of each, and an Independence Day that fell on a Wednesday as opposed to a Monday in 2011 — casino executives readily acknowledged that economic conditions and competition also shared the blame.
“It’s a continuation of what we saw in May and June,” Butera said. “The economy is still experiencing some difficulties, and some new competitors have gotten really aggressive. … It’s a somewhat disappointing result.”
Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority, which operates Mohegan Sun, said the Uncasville casino also felt the effect of a July entertainment lineup that was weaker than that of the same month in 2011. Big-name acts at Mohegan Sun Arena are key drivers of the casino’s business.
And then there’s the impact of Resorts World, the casino at the Aqueduct thoroughbred track in New York City. Resorts World, which opened in October, has emerged as a major player in the Northeast gaming market.
“They’re here to stay,” said Etess, who conceded that Mohegan Sun may have underestimated the lure of Resorts World’s combination of slots-like video display terminals and electronic table games.
Resorts World tooted its own horn when its May win eclipsed Mohegan Sun’s for the first and so far only time, though it came close to repeating the feat last month. The casino’s July win, its highest to date, totaled $59.8 million.
“No doubt the electronic games are gaining acceptance, and they’re marketing very hard,” Etess said. “Ultimately, we believe some people will return here if they want to play live table games. We also think new gamers are being created that we can capture a few times a year.”
Resorts World’s electronic table games include versions of roulette, craps and baccarat.
Connecticut’s casinos may not be the only ones feeling Resorts World’s heat. In Yonkers, N.Y., just north of Manhattan, the Empire City Casino at Yonkers Raceway reported a July slots win of $45.3 million, 21.6 percent less than its July 2011 win of $57.8 million.
East of Connecticut, Twin River, the slots parlor in Lincoln, R.I., reported its July win of $40.5 million was down 2.4 percent.
Butera said the competitive pressures emanating from casinos in New York, Pennsylvania and eventually Massachusetts, where as many as three resort casinos and a slots parlor could materialize in three to four years, are causing Foxwoods to reinvent itself.
“We’ll have a very different product,” he said. “With our financial restructuring under way, it gives us a platform to improve this property.”
The Mashantucket Pequot Tribe, which owns Foxwoods, announced this month that it had reached a debt-restructuring agreement with steering committees for a number of the tribe’s lenders. In the months ahead, the tribe, which is seeking to reduce a debt load of $2.2 billion, will work to secure agreements with independent bondholders.
Butera said that while gaming will always be Foxwoods’ dominant revenue source, the casino will continue to refine its retail, food-and-beverage and hotel options. He said the casino, which includes MGM Grand at Foxwoods, is emphasizing the business and convention services it offers and will explore ways to make use of the ample real estate the tribe has at its disposal.
Developers are expected to break ground this fall on a 312,000-square-foot shopping mall on land between Foxwoods Resort Casino and MGM Grand.
“Everyone’s looking to increase nongaming revenues,” Etess said. “You’ve got to create different (business) drivers.”
Total win (in millions): $51.0
Yearly change: -15.8%
State contribution (in millions): $12.8
* Hold: 8.65%
Operating units: 6,249
Total win (in millions): $60.0
Yearly change: -10.4%
State contribution (in millions): $15.0
* Hold: 8.13%
Operating units: 5,917
*Hold is the average percent of total wagers kept by the casino.