PLAINVILLE — Is the first Massachusetts casino in trouble already?
There’s only one person we should be asking: Tim Wilmott, CEO of Penn National Gaming, which owns the Plainridge Park Casino here. When the place opened in June, there was a line out the door, but since then revenues have been sliding.
If Massachusetts grumbled when it legalized gambling, the I-told-you-so’s are deafening as the state’s slots parlor flounders. The rocky start, the naysayers will say, is just proof that the New England market is saturated.
But ask Wilmott, who was visiting from Penn’s Pennsylvania headquarters last week, and he’ll cop to only one misgiving about Plainridge: the coffee.
“That was a mistake,” said Wilmott, sitting over a brew from its in-house café, The Bean. “We should have known being in the Boston market that we needed Dunkin’ Donuts.”
Plainridge hopes to bring in Dunkin’ in January, one of a slew of adjustments Penn is making. Wilmott chalks up the changes to what any business would do as it figures out a new market.
“The numbers are slightly below what we expected,” Wilmott acknowledged. “But it’s still a very good return on our investment here.”
There’s no question Plainridge is underachieving. Penn projected about $200 million a year in gross gaming revenue for a facility that is licensed for 1,250 slot machines. That means the company had expected that each machine would generate on average about $438 per day. For September and October, Wilmott said the average was roughly between $330 and $350.
Chief among Penn’s fixes is getting the right mix of games. Responding to customer preferences, Penn doubled the number of video poker machines to 25 and will increase the number of high-denomination slots — ranging from $5 to $100 a pull — from 25 to more than 40.
And since Massachusetts gamblers don’t seem to like electronic table games, Penn will cut that number in half. The attempt to simulate live card games — complete with videos of scantily-clad female dealers — was a lesson in knowing your customer.
Plainridge set up 50 digital blackjack machines thinking it could compete with table card games at Rhode Island’s Twin River Casino, a half hour away. Turns out these gamblers would rather drive down the road than play a high-tech alternative.
Casinos are famous for busing in patrons, many of them seniors who don’t like to drive, and Plainridge will be ramping up its program to keep slots ringing during the middle of the week.
That Plainridge’s numbers are falling short even though there is zero competition in Massachusetts now is grist for gambling skeptics. Both MGM Springfield and Wynn Resorts in Everett are years away from opening, and imagine what happens if the Mashpee Wampanoag tribe or Rush Street Gaming succeed in building a resort casino in the southeast region.
Maybe Wilmott has a good poker face, but my take is that he is unfazed by Plainridge’s lackluster launch. He tells me Penn has opened six casinos in four years, amassing an empire of regional gambling houses in Ohio, Illinois, and other states. This always happens. A great first month or two, a drop off, and then the business starts to pick up again in the seventh or eighth month.
‘The numbers are slightly below what we expected. But it’s still a very good return on our investment here.’Tim Wilmott, Penn National Gaming chief executive
Wilmott warns that the numbers will get worse before they get better. December and January are typically the weakest months of the year between the holidays and the holiday bills that come due.
“You can’t compete with Santa Claus,” said Wilmott.
Or, it turns out Tom Brady.
Sundays, typically the third busiest day after Fridays and Saturdays, have taken a hit when the Patriots are playing, especially when it’s a home game. Foxborough is only a few miles away from Plainridge, and Penn underestimated the impact on game days. Gamblers are just like everyone else: They hate traffic.
“I joked with someone yesterday that I wish the New England team were the Eagles, not the Patriots,” said Wilmott. “There would be less fan interest.”
But here’s why Wilmott is willing to take the long view on Massachusetts. The average customer gambles about $90 to $95 per visit — about $20 to $25 more than the customers in Penn’s other markets. Penn also didn’t have many customers in Massachusetts, and now it has about 125,000 patrons signed up for its loyalty cards.
But in the event that Plainridge can’t turn around its fortune, would Penn seek a reduction in taxes? The slots operation pays 49 percent of its gambling revenue to the state. A break on property taxes is something that Penn’s Hollywood Casino in Bangor, Maine, is seeking after seeing revenue drop off when another casino opened.
Wilmott is emphatic on this point about whether Penn wants to lower its tax bill here.
“Absolutely not,” he said. “We knew what the deal was.”
Sounds like Wilmott knows the bet he is making in Massachusetts. If he’s not panicking, we shouldn’t either.