Introduction

Politicians in Massachusetts, New York, and Rhode Island have put aside moral and/or addiction concerns over gambling. Instead, they recently asked why all the gambling dollars from their citizens go to the casinos (and governments) in Connecticut and New Jersey. They responded by approving for new gaming facilities in all three states.  Below, data on these actions is presented with commentary.

The Current Situation

Table 1 provides gambling revenues and how they have changed since 2007 for northeast US states, with California, Nevada and Macau included as points of reference. The growth in Macau has been truly amazing. And additional facilities continue to be built there. However, as noted in an earlier piece, Japan has just approved a number of new integrated resort casinos. And these can be expected to siphon off some of the gambling from Macau, Singapore, Malaysia and Australia.

Gambling revenues in Nevada, New Jersey, and Connecticut have not recovered from the 2008 global recession caused by the US banking collapse.

Table 1. – Gambling Revenues, Selected States

*Amount Bet Less Amount Paid Out to Players as Winnings

Source: Global Betting & Gaming Consultants (GBGC)

Table 2 gives a summary of existing and new gambling facilities that have just come online or will shortly. Plainridge and an expansion of Twin River only recently started up. MGM in Springfield is scheduled to open next summer with the Wynn casino starting up the following summer. Several New York casinos have recently opened and three more will probably open in the 2020 – 2025 period. Like Foxwoods and Mohegan Sun, MGM and Wynn will build their own hotels. Wynn’s will have 700 rooms with MGM having 250. Note that when all casinos are completed, the gaming machine supply will increase 30%. Data on gaming tables is incomplete but the total will probably also result in a 30% increase.

The final column indicates how far the casinos are from Foxwoods. Note how close the Massachusetts and Rhode Island’s casinos are to Foxwoods and Mohegan Sun. There is evidence that competition from nearby casinos has an impact. I quote from the most recent Foxwoods’ financial report: “Both Rhode Island casinos have continued with enhanced marketing efforts in 2016 but it was not enough to offset their decline in slot revenues of 3.1% over fiscal year 2015 due to the impact of the opening of Plainridge Park in Massachusetts.” This demand sensitivity suggests further that both Mohegan and Foxwoods will lose customers to the new MA casinos.