Casinos' slots revenues plummet to historic lows
Foxwoods Resort Casino and Mohegan Sun reported Friday historic declines in the slot-machine revenues they collected in February, posting the lowest monthly "win" totals they've experienced in more than 16 and 12 years, respectively.
Win is the amount a casino keeps after paying out prizes to gamblers.
Foxwoods, which includes MGM Grand at Foxwoods, reported a win for last month of $38.5 million, 24 percent less than it won in February 2012. Mohegan Sun's February win of $45.4 million was down 18.6 percent over the same month the previous year.
Foxwoods had not reported a win of less than $40 million since December 1996. Mohegan Sun's February win was its lowest since February 2001. Editors' note: This corrects an earlier version of this story.
Foxwoods has experienced double-digit declines in six consecutive months, while Mohegan Sun's win has plunged by double digits in four of the last six months.
The situation has had a direct impact on the state, which takes a quarter of the tribally owned casinos' slots win. In the 2012 fiscal year, that amount — it has fallen each year since fiscal 2007 — came to more than $344 million. State budgetmakers projected casino payments of $300 million in fiscal 2013, which ends June 30, and $299 million in each of the 2014 and 2015 fiscal years.
Through the first eight months of the current fiscal year, the casinos have contributed nearly $194.7 million to the state's coffers.
"We have already significantly reduced our current year estimate for Indian gaming payments," Ben Barnes, the state budget director, said Friday when asked about the latest slots results.
"It's hard to base anything on one month," he said. "There's weather patterns and issues affecting consumer confidence, so we don't want to overreact, but obviously there's a downward trend. I don't like the loss of revenue to the state, but I'm even more concerned about maintaining the casinos as major employers and large drivers of tourism and economic development."
Barnes noted the state has been working with the Mashantucket Pequots, who own Foxwoods, and the Mohegans, who own Mohegan Sun, agreeing to charge them less for services the state provides the casinos in such areas as public safety and liquor control.
"I have confidence in their ultimate success," he said.
While a Mohegan Sun executive attributed February's slots numbers to the extreme weather, a gaming expert said the recent declines at the Connecticut casinos are consistent with the findings of a soon-to-be-released survey of gaming behavior in New England.
"We were truly shocked by the drop off in visitations to Foxwoods by Massachusetts residents, who historically account for 31 to 36 percent of Foxwoods' customer base," Clyde Barrow, director of the Center for Policy Analysis at UMass Dartmouth, said in an email. "However, our survey findings indicate that Massachusetts residents are both gambling less than in previous years and shifting many of their remaining trips to Twin River in Rhode Island. Since Twin River is a slots-only facility, it stands to reason that its major impact on Foxwoods would be its slots revenue.
"We found that Massachusetts residents continue to visit Mohegan Sun in the same numbers, but they are evidently spending less per trip, while Resorts World in Queens, New York — now the most lucrative slots-only facility in the United States — has siphoned off many of Mohegan's New York customers.
"This is just a preview to what is likely to happen once Massachusetts finally licenses its resort casinos."
Resorts World, located at the Aqueduct horse racing track, reported its February win was up 6.2 percent, to $57.1 million.
Twin River, in Lincoln, R.I., and Empire City Casino at Yonkers (N.Y.) Raceway, another player in the Northeast gaming market, reported February slots revenue declines that were more modest than those at the Connecticut casinos. Twin River's win was $36.6 million, down 11.8 percent, and Empire City's was $44.7 million, down 4.9 percent.
Ray Pineault, Mohegan Sun's chief operating officer, pointed to last month's storm and other weather-related events as the reason for the sharp decline in his casino's slots revenue.
"We faced a blizzard that started on a Friday, with the governor closing the state's roads until late in the day Saturday," he said. "We felt the impact for four days, and lost a significant event Saturday when Bon Jovi had to cancel."
The band Bon Jovi was scheduled to open a world tour with a Feb. 9 show in Mohegan Sun Arena. The sold-out show was rescheduled for Oct. 25, though the band performed an impromptu free concert on Feb. 9.
Stormy weather elsewhere in the region, including in Mohegan Sun's "feeder markets" in Worcester and Boston, also affected the casino's business during the month, Pineault said.
In addition, he said, February 2012 had an extra day because it was a leap year.
"Absent the snow, things are going reasonably well," Pineault said. "When you lose four out of 28 days, that's one-seventh of your month."
No Foxwoods executive was available to comment on the February slots revenues.
February 2013 Slot-Machine Revenues
Total win (in millions): $38.5
Yearly change: -24.0%
State contribution (in millions): $9.8
* Hold: 8.32%
Operating units: 6,135
Total win (in millions): $45.4
Yearly change: -18.6%
State contribution (in millions): $11.4
* Hold: 8.25%
Operating units: 5,532
*Hold is the average percent of total wagers kept by the casino.
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