Encore Boston Harbor took in $16.8 million in gaming revenue during opening week
Call it the Tale of Two Cities. Or maybe the Tale of Two Casinos.
The Encore Boston Harbor complex in Everett raked in $16.8 million in gambling revenue during its first week in business last month, according to figures released Monday by the Massachusetts Gaming Commission.
That means the $2.6 billion gambling palace that Wynn Resorts built on Boston’s doorstep generated almost as much revenue in one week as MGM Springfield, the state’s other full-service casino, collected in an entire month. The smaller MGM casino had nearly $20 million in gambling revenue in June, its second-slowest month since opening last August.
State government has a big stake in how this market shakes out. The state collects 49 percent of the gross gambling revenue at Plainridge Park Casino in Plainville and 25 percent at MGM Springfield and Encore Boston Harbor. In June alone, those numbers totaled nearly $16 million in taxes collected.
Industry experts say it’s hard to draw much of a conclusion from one week, or one month, of numbers. They also say that it’s not entirely fair to compare the two casinos, given the significant differences in wealth and population size between Boston’s metro area and Springfield’s.
But the analysts agree on two important points: This was a strong start for Wynn and another worrying month for MGM.
“If I was Encore management, I’d be pretty happy with those results,” said Paul DeBole, a political science professor at Lasell College in Newton who studies the region’s casinos.
In particular, experts pointed to the surprisingly high percentage of casino revenue coming from table games versus slot machines at Encore in that first week. Nearly $7.7 million, or more than 45 percent of total gambling revenue, came from table games such as blackjack and roulette.
Richard McGowan, a gambling expert who teaches at Boston College, said it’s common at the Connecticut and New Jersey casinos to see 80 percent of the gambling revenue come from slot machines, and 20 percent from table games. The nearly 50-50 split at Encore Boston Harbor is highly unusual.
“They really are getting the high rollers,” McGowan said. “It shows you what a different type of customer they’re getting, compared to MGM.”
MGM’s $950 million casino in Springfield also started out strong, though. The company reported $9.5 million in gaming revenue for its first week, in August, mostly from slots.
Penn National opened Plainridge four years ago. But that casino features slot machines and not table games and lacks many of the amenities offered by full-scale resort casinos such as MGM and Encore. (Still, Plainridge pulled in $13.5 million in gambling revenue last month, all from slots.)
DeBole’s calculations show that gamblers spent roughly the same amount of money on slots at both the MGM casino and the Wynn casino during their respective first week in business.
However, with the exception of strong months in September and February, MGM has generated between $19 million and $22 million a month in gross gaming revenue since then.
In 2014, MGM told the gaming commission to expect $418 million in gross gambling revenue in its first full year in Springfield. That seems almost impossible now. Instead, MGM will be lucky to break $300 million. After 10 months, plus that extra week in August, the casino has brought in only $232 million.
Likewise, MGM’s initial forecast of $500 million in annual gambling revenue by year three seems overly optimistic.
Clyde Barrow, a casino expert at the University of Texas Rio Grande Valley, said MGM has been significantly underperforming, compared with its original forecasts. Encore may have taken some business away from MGM in that first week, he said. Plainridge, he said, is meeting expectations — although it, too, probably lost a small percentage of revenue to Encore.
Neither MGM nor Wynn made executives available to talk about the June results. MGM issued a brief statement, saying its team looks forward to “continuing to execute on our strategy to provide one of the most unique and diverse resort and entertainment experiences in the region.” A Wynn spokesman said the company would wait until its next earnings conference call to comment about Encore Boston Harbor.
The region’s casino market has become increasingly crowded in the past year. Along with MGM Springfield and Encore Boston Harbor, Twin River opened a new casino just over the Massachusetts state line, in Tiverton, R.I.
The gambling commission continues to weigh whether to allow a third full-service casino, which would be in Southeastern Massachusetts. And the Mashpee Wampanoag tribe has not given up on opening a tribal casino in Taunton, despite legal challenges.
Meanwhile, the operators of the two Connecticut tribal casinos, Foxwoods and Mohegan Sun, have teamed up to open a third casino in that state, in East Windsor, to protect their northern flank from MGM. They have good reason to be concerned: Both Connecticut casinos have reported declines in slots revenue every month since MGM opened.