Report: New England still has untapped $2B gaming market

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NORTH DARTMOUTH, Mass. - Massachusetts residents continued to spend more than $1 billion a year on gaming in Connecticut and Rhode Island, pouring $233 million in tax revenues to those states' treasuries, according to the latest report from the Center for Policy Analysis at the University of Massachusetts - Dartmouth.

The New England Gaming Research Project's 2008 New England Gaming Update, released in March, reported that for the fifth consecutive year, Bay Staters spent more than $1 billion at Foxwoods Resort Casino and the Mohegan Sun in Connecticut, and the newly renovated Twin River and Newport Grand racino slot parlors in Rhode Island.

Massachusetts patronage of Connecticut and Rhode Island gaming venues remains strong and resilient, said Clyde Barrow, the center's director, in a release.

''It's an extraordinary indication of Massachusetts residents' fervor for gaming-related entertainment, hospitality and tourism in a $5 billion New England gaming market that still has about $2 billion in untapped demand outstanding.''

Barrow, who is recognized as the most knowledgeable expert on the New England gaming market, has tracked gaming patterns at the region's casinos and slot parlors for five years.

The latest study shows that Massachusetts residents spent around $846 million at Foxwoods and Mohegan Sun; $195 million at Twin River and Newport Grand in Rhode Island; and just under $2 million at Hollywood Slots in Maine. Their spending contributed $117 million in taxes to Connecticut, $116 million to Rhode Island and just under $1 million to Maine.

Foxwoods and Mohegan Sun are owned by the Mashantucket Pequot Tribal Nation and the Mohegan Indians, respectively. Twin River and Newport Grand are owned by casino developers Sol Kerzner and Len Wolman, and the state of Rhode Island rakes off 60 percent of the profits. Hollywood Slots, the only slot venue in Maine, is owned by non-Indians from out of state.

One of the surprising statistics in Barrow's study is that Massachusetts residents comprised 36 percent of Foxwoods patrons, exceeding Connecticut residents' patronage at their home state's largest casino.

They also make up 21 percent of the customers at Mohegan Sun; 42 percent at Twin River; 43 percent at Newport Grand; and 3 percent at Hollywood Slots.

Barrow's report was released March 24, just four days after Massachusetts legislators voted down Gov. Deval Patrick's bill to allow up to three casinos in the state. But Massachusetts' loss is the nearby states' gain: Bay Staters made nearly 8 million visits to New England's casinos and slot parlors last year, creating nearing 6,500 jobs in the three nearby states, according to the report.

Barrow pointed to a June 2007 study from the Connecticut Economic Research Center that found Foxwoods and Mohegan Sun spent $1.5 billion in payroll, business purchases and other expenditures in 2006. Fully 93 percent of Mohegan Sun's expenditures - $538 million - were spent within Connecticut's economy.

The report noted that Massachusetts residents' overall gaming pending remained steady at around $1 billion last year, despite a decline in business at Foxwoods and Mohegan Sun.

''Twin River in Lincoln Park, Rhode Island, and Hollywood Slots in Bangor, Maine, experienced double-digit growth in gaming revenues during 2007, although New England's two destination resort casinos and three slot parlors combined generated $2.86 billion in gross gaming revenues in 2007 compared to $2.91 billion in 2006 - a 1.7 percent decline,'' the report states. ''Total gaming and non-gaming revenues in 2007 were $3.53 billion compared to $3.63 billion in 2006 - a 2.7 percent decline. Nevertheless, casino spending by Bay Staters held steady primarily due to their increased patronage of Foxwoods and Twin River during 2007.''

Some of the downturn at the Connecticut casinos is due to an overall economic slowdown in which patrons have less discretionary cash to spend, but also current developments within the larger Northeastern gaming market that includes New England and the Mid-Atlantic states, including New Jersey, New York and Pennsylvania, Barrow said.

''The growing competition in the northeastern gaming market is restructuring that market geographically, but it is also leading to an overall increase in the size of the gaming market, new capital investment in new facilities, and the improvement of existing facilities,'' the report says.

Foxwoods and Mohegan Sun are each in the midst of $700 million expansions.

The Mohegans' Project Horizon will add a new 922-room hotel with 261 House of Blues-themed rooms, a house of Blues Music Hall, 115,000 square feet of additional retail and restaurant space and a new 64,000-square-foot Casino of the Wind.

MGM Grand at Foxwoods, which will open in May, will include a new hotel with 825 guest rooms and suites, another 115,000 square feet of meeting and convention space, a 4,000-seat performing arts theater, and a new casino with 1,400 slot machines and 53 table games.

The two Connecticut casinos are positioning themselves as national and international destinations by expanding into full-blown gaming, entertainment and convention and meeting complexes, Barrow said.

While the two facilities suffered minimal revenues declines last year, he noted in a release that their expansion plans ''are being shaped to accentuate the facilities' non-gaming amenities both to accommodate and attract regional and national conventions and business meetings.''

The two Connecticut casinos have enjoyed a vibrant presence within that market in New England for the past decade, he said in a release, ''but the current expansions are an aggressive move designed to capture an even bigger portion of Massachusetts' and Rhode Islands' convention and meetings business.''

The New England Gaming Research Project is funded entirely by the University of Massachusetts - Dartmouth. The full report is at www.umassd.edu/cfpa.