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4-Traders Homepage  >  Equities  >  Nyse  >  MGM Resorts International    MGM

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MGM Resorts International : Gambling Revenue Down Again at Connecticut Casinos, Report Finds

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04/11/2017 | 09:15am CEST
By Joseph De Avila 

Revenue at Connecticut's two Indian casinos fell for the ninth straight year amid greater competition in the Northeast, according to a report released Tuesday, an extended losing streak that may continue with new competition on the horizon.

The combined gambling revenue for Foxwoods Resort Casino and the Mohegan Sun casino fell to $1.6 billion in 2015, a 1% decline from the previous year, according to a report by Nathan Associates Inc., an economic consulting firm, based on the most recent data. The 2015 figures -- which exclude revenue from accommodations and shows -- are down by 36% compared with the last peak in 2006.

Currently the tribes that run the casinos send 25% of their slot revenue to Connecticut, or about $260 million annually. Connecticut's Office of Fiscal Analysis estimates that new competition from a planned casino in Springfield, Mass., could cost the state $68 million in annual gambling revenue.

The slowdown for Connecticut's Indian casino market was primarily driven by the recession and more competition throughout the Northeast, said Alan Meister, principal economist with Nathan Associates.

"You've got this saturation of gaming in that region," Mr. Meister said. "They are fighting for their market share."

It is only going to get more difficult for the state's casinos as more competition is on the way. MGM Resorts International will open a casino in Springfield next year. And Empire Resorts Inc. plans to open a casino in Thompson, N.Y., in the Catskills in 2018.

The Mashantucket (Western) Pequot Tribal Nation, operators of Foxwoods, and the Mohegan Tribe, operators of Mohegan Sun, have teamed up to try to shore up potential losses to rival casinos in Massachusetts. The tribes are proposing to build a casino in East Windsor, Conn., about 70 miles south of Springfield.

"When Rhode Island launched its industry, we did nothing. When New York got into the game, we did nothing," said Andrew Doba, a spokesman for the tribes. "We've got a choice now, continue to do nothing, or fight and save good paying jobs."

That proposal, which requires approval from the state Legislature, faces an uncertain future in Hartford. Attorney General George Jepsen wrote a legal opinion in March that concluded it was unclear how the federal government would allow for a third casino or would permit proposed amendments to the state's existing revenue-sharing agreement with the tribes. The Bureau of Indian Affairs reviews tribal casinos.

The tribes sent Connecticut lawmakers a letter last week stating that their proposed third casino won't endanger the current revenue-sharing agreement.

Write to Joseph De Avila at [email protected]

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EBIT 2017 1 801 M
Net income 2017 677 M
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Yield 2017 1,36%
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Average target price 36,7 $
Spread / Average Target 18%
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NameTitle
James Joseph Murren Chairman & Chief Executive Officer
William Joseph Hornbuckle President
Corey I. Sanders Chief Operating Officer
Daniel J. D'Arrigo Chief Financial Officer & Executive Vice President
Roland A. Hernandez Lead Independent Director
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