Foxwoods and Mohegan Sun April 2014 Revenues Decline from April 2013 Winnings
Mohegan Sun and Foxwoods showed a significant decline in April revenues from the same time last year, according to the Hartford Courant newspaper. Mohegan Sun showed the steeper decline of the two, losing a full 9% off its April 2013 numbers.
Foxwoods revenues were down 4% from April 2013 to April 2014. Mashantucket Casino also lost 4% of its monthly revenues from the same period in 2013. Analysis of the numbers show that the biggest traditional winner for land casinos seems to be faltering, though the reason for this trend is not clear.
Slot Revenue to Blame
The disturbing numbers come entirely from the decline in slots revenues. Mohegan Sun lost 11% off its year-to-year slot machine revenues. Foxwoods reported a similar 11% drop in revenues from the slots floor.
In fact, if you take into account the money in lost slots revenue, the numbers on all other games in the Connecticut Tribal casinos increased. The decline in slot machine revenues is a regional trend, as land-based casinos in Pennsylvania and New Jersey have shown similar numbers.
Why People Don’t Play the Slots
Gaming analysts have a number of suggestions to explain the seeming loss of interest in slot machines. One theory is the recession continues in certain areas of the country, so the mass market players who frequent slots row are not going to the casinos in the same numbers.
Another theory is the high house edge on the slot machines. Slot machines account for 60% to 70% of all casino revenues. As more people learn about their hobby, more are likely to stop playing the slots and start playing table games, which typically have a higher expected return than the slots. Such a trend would explain the lose in slot machine revenues, combined with the (smaller) increase in table game revenues.
Online Slots a Factor?
Yet another possibility is a slow-down of gambling in land-based venues across the region. Now that New Jersey has legal online casinos, fewer gamblers may travel to the big casino destinations like Foxwoods or Mohegan Sun.
Online video slots are more like their land-based counterparts, because playing the slots is a solitary activity. A gambler who enjoy poker, blackjack, or craps in a live setting may enjoy those games for its social aspects. Such players might be less likely to gamble online.
The problem with such a theory is that New Jersey gamblers are much more likely to drive to Atlantic City than to the Native American casinos in Connecticut. Online gambling in New Jersey should have little effect on Mohegan Sun and Foxwoods. It is possible that New Yorkers wanting to gamble online might cross the Hudson River into New Jersey, instead of drive several hours into Connecticut.
Massachusetts Casino
Some among the Native American tribes blame the opening of casinos in Massachusetts and Rhode Island for the erosion in their customer base. Rhode Island opened gaming venues in the last few years, which has caused Massachusetts to approve land casinos to keep their state’s gamblers’ money in Massachusetts.
To offset this trend, Mohegan Sun is seeking to build a Massachusetts casino. The road to licensing has been troublesome so far, though the prospect of a Mohegan Sun in Massachusetts remains a possibility. On Wednesday, it was announced that the Mohegan Sun and the city of Everett, Massachusetts could be close to a revenue sharing deal. If so, the Indian tribe might win the Revere casino bid. Mohegan Sun and Everett have until mid-June to agree on a plan.
Steve Wynn is a rival in seeking the license, as Wynn Resorts continues to negotiate with the city of Everett. By the middle of June 2014, one or the other should be able to announce they have a Massachusetts casino license for a city in the Boston area. Such a license would prove lucrative.
Mohegan Sun: A Financial Tragedy
A book could be written about the financial woes of the Mohegan Sun Casino. In the 1990’s and early 2000’s, no other casino in the world was riding a higher crest. From 2006 to 2008, the tribal casino planned breathtaking expansions of their gaming floor, expansions which would have made Mohegan Sun the largest casino on the planet.
Those plans coincided with the global economic recession. The casino expanded into a world class destination at a time the market collapsed. Some of the developments were never finished. The mass market players were not flocking to Mohegan Sun, because they did not have the money to spend on gambling. Fewer high rollers played, because many were hoarding their money. This gaming trend combined with saturation of the regional market to turn Mohegan Sun’s finances upside-down.
While the financial woes of the Connecticut tribal casinos are hardly isolated, they serve as a microcosm of the difficulties presented to American land casinos over the past six years.
