DARTMOUTH, Mass. – The way Massachusetts residents spent money gaming last year, one would never know the country is in the midst of the worst recession in decades.
Bay Staters spent $968 million at Connecticut’s two Indian resort casinos and at Rhode Island and Maine’s commercial racinos in 2009, increasing their gaming spending by 5.3 percent over the previous year, according to the “New England Casino Gaming Update, 2010.”
Massachusetts residents spent more on gaming than in previous years “despite an ongoing recession that has battered the national economy, decimated state and municipal budgets, and increased unemployment to its highest level in over 33 years,” said Dr. Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts at Dartmouth, which released the study March 29.
Residents spent more despite “an overall decline in gaming and total revenues at four of New England’s five casino gaming venues,” Barrow said.
One possible explanation is that current and leading indicators suggest Massachusetts is coming out of the recession earlier than most states in the region.
The study tracks annual gaming and non-gaming expenditures at New England’s resort casinos and racinos by analyzing traffic flows through license plates to see where people are coming from, and then using that information as a basis for developing an estimate of how much people from different states spent at the various facilities.
Casino gaming is a $3.2 billion sector of the leisure, hospitality and entertainment industry in New England, which includes Foxwoods Resort Casino, owned by the Mashantucket Pequot Tribal Nation, and Mohegan Sun in Connecticut; Twin River and Newport Grand, Rhode Island’s government-owned slot parlors; and the commercially-owned Hollywood Slots, in Bangor, Maine.
Since 1992, Massachusetts residents have spent more than $12 billion at Connecticut, Rhode Island and Maine gaming facilities, generating about $4.3 billion in tax revenues primarily to Connecticut and Rhode Island state governments, the report says.
In addition to traffic flows, the Center for Policy Analysis utilizes financial data derived from the Connecticut Division of Special Revenue, the U.S. Securities and Exchange Commission, the Rhode Island Lottery Commission, and the Maine Department of Public Safety’s Gaming Control Board.
The study found that in 2009, Massachusetts residents spent:
- $730.6 million versus $709 million in 2008 at Foxwoods and Mohegan Sun, an increase of more than $21 million or 3 percent;
- $237 million versus $210.9 million in 2008 at Rhode Island’s Twin River and Newport Grand racinos, an increase of nearly $28 million or 12.5 percent;
- $709,136 versus $602,345 in 2008 at Maine’s Hollywood slots, an increase of about $107,000 or 17.8 percent.
Massachusetts residents comprise 36 percent of Foxwoods, 19 percent of Mohegan Sun, 48 percent of Twin River, 45 percent of Newport Grand, and one percent of Hollywood Slots’ patrons.
“They are the Connecticut resort casinos and Rhode Island racinos’ largest out-of-state customer base, and make more visitations to Foxwoods – 3.7 million annually – than residents of Connecticut,” the report states
Bay Staters’ gaming activities were good news for the general funds of state governments other than Massachusetts.
“Massachusetts spending in 2009 at New England’s casinos and racinos generated $230 million in tax revenues to Connecticut, Rhode Island and Maine state governments, a $19 million increase – about 9 percent – over 2008’s $211 million in taxes generated,” Barrow said.
In 2009, Foxwoods and Mohegan Sun, the two largest casinos in the country, had combined gross gaming revenues of nearly $2.1 billion, employed around 20,000 people and contributed $362 million to the state of Connecticut.
Twin River and Newport Grand had combined gross gaming revenues of $461.2 million, employed approximately 800 people and paid $281.8 million to the state’s general fund last year.
Rhode Island is one of the few, if not the only, state that has a monopoly on gaming. Like Maine, the state government has worked hard through the courts to prevent the indigenous nations – Narragansett Indian Tribe in Rhode Island, and the Penobscot and Passamaquoddy nations in Maine – from exercising their rights to gaming under the Indian Gaming Regulatory Act.
The report estimates that Hollywood Slots’ revenues in 2009 were $64.5 million compared to $54.8 million the previous year. Barrow attributes the increase to the opening of Hollywood Slots permanent facility and the addition of 500 slot machines, and expanded hotel operations.
Massachusetts has race tracks, but no casinos. The state is currently contemplating allowing slots at the race tracks and two casinos. The Mashpee Wampanoag Tribe is planning a full resort casino as soon as its land into trust application is resolved by the Interior Department.
Barrows predicted that the Rhode Island racinos – and the state’s general fund – will be “particularly vulnerable” if Massachusetts approves resort casinos and racinos.
“Slot machines at southeastern Massachusetts racetracks will be devastating to Rhode Island gaming revenues, recapturing some Rhode Islander spending from their home state racinos.”
A Massachusetts resort casino would compete for more than $200 million spent yearly by Rhode Islanders at the Connecticut casinos.