Meetings & Information


Thursday, April 28, 2016

Gambling Commission crunches casino numbers, Pivotal meeting continues Wednesday on Brockton casino.....

Commission crunches casino numbers

Consultant: Tax take falls with 2 casinos in SE Mass

A CONSULTING FIRM working for the Massachusetts Gaming Commission estimated on Tuesday that the state would net less tax revenue overall if the commission approves a commercial casino in Brockton in addition to the tribal casino in Taunton being pursued by the Mashpee Wampanoag tribe.
With just the Taunton casino operating in southeastern Massachusetts, HLT Advisory Inc. estimated gaming revenue statewide would be $1.7 billion a year, with state tax revenues totaling $433 million. If a Brockton casino is also approved, the consulting firm estimated the state’s total gaming revenue would increase between $46 and 64 million, but tax revenues would actually decline by $28 million to $42 million.
The decline in tax revenues despite an increase in gambling is triggered by two factors. Under the terms of a deal between the Mashpee and Massachusetts, the tribe agreed to pay the state 17 percent of its  gambling revenue in taxes if its casino is the only one allowed to operate in southeastern Massachusetts; if another casino is approved for the region, the tribe is not required to pay any gambling taxes.
The second factor is a decline in revenue at the Plainville slots parlor if two casinos open in southeastern Massachusetts rather than one. According to the analysis by HLT Advisory, the Plainville slots parlor would generate $143 million a year in gaming revenue if just the Taunton facility opens. If the Brockton casino is also built, revenues at Plainville would fall to about $100 million.
The decline in revenues at the Plainville facility would have a disproportionate impact on the state’s tax revenues, since the slots parlor is taxed at a 49 percent rate while casinos are taxed at a 25 percent rate. According to the HLT analysis, state tax revenue at the Plainville facility would fall from $70 million a year with just one southeastern Massachusetts casino to less than $50 million with two casinos.
As it begins deliberations this week on whether to approve the Brockton casino, the Gaming Commission faces a series of tough choices. The commission is preparing to vote on whether to grant a 15-year casino license to Mass Gaming & Entertainment, a partnership between Neil Bluhm of Rush Street Gaming and George Carney, the owner of the Brockton Fairgrounds where the casino will be located.
But looming in the background is the bid by the Mashpee to open their own casino in Taunton. The federal government has allowed the tribe to take land in Taunton into trust for the casino, but that decision is being challenged in court. If the Gaming Commission rejects the Brockton casino proposal and legal challenges stymie the Taunton tribal casino, the state could be left with no casino in the southeastern portion of the state. On the other hand, if the commission approves the Brockton casino, and the tribal casino sidesteps a court challenge and does get built, the state would end up with two casinos in the southeast.
The revenue analysis by the Gaming Commission’s consulting firm was more pessimistic than calculations put together by a consultant to Mass Gaming & Entertainment. If both casinos open, Mass Gaming’s consultant estimated the Brockton casino would generate $327 million a year in revenues, compared to $253 million for the Mashpee casino. By contrast, HLT estimated a range of $236-$305 million in revenues for the Taunton facility and $200-$245 million for the Brockton facility.
The Gaming Commission consultant also said Mass Gaming’s return on investment in Brockton would be 21 percent if the Taunton casino never gets built, but would fall to 15 percent if the tribal facility does open. If Mass Gaming’s revenues fall below $250 million a year, commissioner Enrique Zuniga said the Brockton project’s rate of return would come in below what is considered “commercially reasonable.”
Crunching casino revenue numbers is not easy, but the Gaming Commission’s consultant said the current situation is made more difficult by the fact that little is known about the eventual size and scope of the proposed tribal casino in Brockton. The Mashpee, in partnership with their financial backer, the Genting Group, have said they will build their $1 billion casino in phases. The tribe has threatened to sue the Gaming Commission if it grants a casino license to Mass Gaming.
In its first day of deliberations in Brockton, members of the Gaming Commission reviewed the Brockton proposal on its finances, its building and site design, and its contribution to economic development in the area. The casino proposal was rated sufficient on building and site design and economic development, and sufficient-to-very good on finances.
The $676 million Brockton proposal is smaller than the already approved MGM Resorts casino in Springfield and the Wynn Resorts casino in Everett. Brockton features 2,100 slot machines and 125 table games, compared to 3,000 slot machines at MGM and 3,080 at Wynn Resorts. The Brockton casino includes 125 tables games, compared to 100 in Springfield and 250 in Everett. The Brockton facility also features a 250-room hotel, 3,000 parking spaces, and 1,000 square feet of retail.
Commissioner Zuniga praised the Brockton proposal for trying to complement the Wynn casino in Everett rather than competing head-on against it. For example, he said, the Brockton casino is not pursuing gamblers from abroad, proposing only six tables for baccarat compared to 36 at Wynn.
The commission forecasted the Brockton casino would be up and running by May 2019.  Wynn  is scheduled to open in the fourth quarter of 2018 and MGM Resorts is slated to open in September 2018.
Most of the gambling revenue forecasts used by HLT Advisory were based on the assumption that each adult in the market area will spend $300 to $350 a year on gambling. Stephen Crosby, the chairman of the commission, noted that the Massachusetts Lottery generates annual spending of $720 by each man, woman, and child in Massachusetts.

Enterprise News

The Mashpee Wampanoag Tribe just held a recent groundbreaking for a planned resort casino in Taunton, less than 20 miles away from the proposed ...
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  • Pivotal meeting continues Wednesday on Brockton casino

  • The five-member Massachusetts Gaming Commission is holding public deliberations starting on Tuesday morning to decide on whether to allow a casino to be built in Brockton. Here are five things to keep in mind as the state commission makes its decision.


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