Lottery official cites cold winter, sports events as contributing to decrease in revenue
Published: April 17, 2014 11:20 PM
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Bob Thayer/The Providence Journal
Table games, such as roulette, began at Twin River Casino last June. New figures suggest revenue estimates for the games were optimistic.
By RANDAL EDGARRANDAL EDGARProvidence Journal
Published: April 17 2014 11:20
PROVIDENCE — In theory, it sounded great. The state was going to fetch another $16 million to $20 million from table games at the Twin River Casino, with some of the money coming from the new games and some from the increased play that the games would bring to Twin River’s slot machines.
In practice, the windfall hasn’t met expectations.
OVERSTATED PROJECTIONS!
Two-thirds of the way through the fiscal year, revenues at the state’s one full-fledged casino are running about $3 million ahead of last year, but that’s only because of the added money from the table games.
Revenue from the slot machines — rather than going up — has gone down, and when Twin River’s numbers are combined with declining numbers at the Newport Grand slot parlor and lower earnings from traditional lottery offerings such as scratch tickets, Keno and Powerball, Lottery transfers to state coffers are running about $9.5 million short of projections.
Through March, transfers from the Lottery — the state’s third-largest revenue source — totaled $245.5 million, while the state Office of Revenue Analysis had predicted $255 million.
Not everyone thinks there is cause for concern.
Lottery Director Gerald Aubin said a cold winter, combined with playoff appearances by the Boston Red Sox and New England Patriots, kept potential patrons and customers away. He predicted that the numbers will rebound during the spring.
“The cold weather definitely keeps folks inside, and when a storm or particularly cold weather falls on a weekend, the number of people going to Twin River and Newport Grand declines,” he said. “In addition, while we love that our New England teams made it to the playoffs, and in the case of the Red Sox, the World Series, those successes have a negative impact on VLT revenue because people are staying home to watch the games.”
Patti Doyle, spokeswoman for Twin River, agreed with the weather assessment, and she also said Twin River is “still outperforming” its competitors in Connecticut. According to numbers she provided, Twin River’s slot machine numbers were down 1.2 percent for January and February, while the numbers at Foxwoods and Mohegan Sun were down 4.8 percent.
Paul Dion, chief of the state Office of Revenue Analysis, took a more guarded view of the numbers.
Asked what he sees happening, Dion said the weather may have been a factor with Keno sales, and he said adding table games at Twin River may have taken business away from Newport Grand, where slot machine net terminal income was $28.9 million through February, compared with $31.3 million for the same period last year, according to Lottery figures.
As for the decline in slot machine revenue at Newport Grand, he said having fewer machines is a likely factor, because some were removed to make room for the new table games. Twin River had about 4,750 machines through March 2013. Then the number dropped to about 4,530, which is about where it stands today, he said.
Going forward, Dion said he believes the slot machine numbers for 2014 will compare more favorably with those of 2013, because the month-to-month comparisons for April, May and June will be based on the same number of machines.
Twin River officials predicted “an additional annual” $16 million to $20 million for the state when it opened its table games last June. But the New England and Mid-Atlantic casino gaming market is only becoming more competitive, even as it continues to grow, according to a 2013 study by the UMass Dartmouth Center for Policy Analysis.
The competition will increase for Rhode Island as Massachusetts moves forward with plans to open three casinos, as well as a slot parlor in Plainville, which borders Cumberland.
State Rep. Michael Chippendale, R-Foster, a member of the General Assembly’s Permanent Joint Committee on the State Lottery, said the revenue numbers only look more bleak in light of those plans.
“Revenues are down, Massachusetts isn’t online yet, and it appears that revenues are going to continue to go down,” he said.
Rhode Island officials predict gambling in Massachusetts will cut Rhode Island’s gambling revenue by $422 million over five years, beginning in fiscal 2016. In the meantime, they are hoping that Twin River, Newport Grand and traditional Lottery offerings will produce $394 million for the year that ends June 30.
http://www.providencejournal.com/business/content/20140417-lottery-official-cites-cold-winter-sports-events-as-contributing-to-decrease-in-revenue.ece
In practice, the windfall hasn’t met expectations.
OVERSTATED PROJECTIONS!
Two-thirds of the way through the fiscal year, revenues at the state’s one full-fledged casino are running about $3 million ahead of last year, but that’s only because of the added money from the table games.
Revenue from the slot machines — rather than going up — has gone down, and when Twin River’s numbers are combined with declining numbers at the Newport Grand slot parlor and lower earnings from traditional lottery offerings such as scratch tickets, Keno and Powerball, Lottery transfers to state coffers are running about $9.5 million short of projections.
Through March, transfers from the Lottery — the state’s third-largest revenue source — totaled $245.5 million, while the state Office of Revenue Analysis had predicted $255 million.
Not everyone thinks there is cause for concern.
Lottery Director Gerald Aubin said a cold winter, combined with playoff appearances by the Boston Red Sox and New England Patriots, kept potential patrons and customers away. He predicted that the numbers will rebound during the spring.
“The cold weather definitely keeps folks inside, and when a storm or particularly cold weather falls on a weekend, the number of people going to Twin River and Newport Grand declines,” he said. “In addition, while we love that our New England teams made it to the playoffs, and in the case of the Red Sox, the World Series, those successes have a negative impact on VLT revenue because people are staying home to watch the games.”
Patti Doyle, spokeswoman for Twin River, agreed with the weather assessment, and she also said Twin River is “still outperforming” its competitors in Connecticut. According to numbers she provided, Twin River’s slot machine numbers were down 1.2 percent for January and February, while the numbers at Foxwoods and Mohegan Sun were down 4.8 percent.
Paul Dion, chief of the state Office of Revenue Analysis, took a more guarded view of the numbers.
Asked what he sees happening, Dion said the weather may have been a factor with Keno sales, and he said adding table games at Twin River may have taken business away from Newport Grand, where slot machine net terminal income was $28.9 million through February, compared with $31.3 million for the same period last year, according to Lottery figures.
As for the decline in slot machine revenue at Newport Grand, he said having fewer machines is a likely factor, because some were removed to make room for the new table games. Twin River had about 4,750 machines through March 2013. Then the number dropped to about 4,530, which is about where it stands today, he said.
Going forward, Dion said he believes the slot machine numbers for 2014 will compare more favorably with those of 2013, because the month-to-month comparisons for April, May and June will be based on the same number of machines.
Twin River officials predicted “an additional annual” $16 million to $20 million for the state when it opened its table games last June. But the New England and Mid-Atlantic casino gaming market is only becoming more competitive, even as it continues to grow, according to a 2013 study by the UMass Dartmouth Center for Policy Analysis.
The competition will increase for Rhode Island as Massachusetts moves forward with plans to open three casinos, as well as a slot parlor in Plainville, which borders Cumberland.
State Rep. Michael Chippendale, R-Foster, a member of the General Assembly’s Permanent Joint Committee on the State Lottery, said the revenue numbers only look more bleak in light of those plans.
“Revenues are down, Massachusetts isn’t online yet, and it appears that revenues are going to continue to go down,” he said.
Rhode Island officials predict gambling in Massachusetts will cut Rhode Island’s gambling revenue by $422 million over five years, beginning in fiscal 2016. In the meantime, they are hoping that Twin River, Newport Grand and traditional Lottery offerings will produce $394 million for the year that ends June 30.
http://www.providencejournal.com/business/content/20140417-lottery-official-cites-cold-winter-sports-events-as-contributing-to-decrease-in-revenue.ece
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