New Casinos Inevitably Saturating New England’s Market

New England Casino threatened by Market SaturationThere are a few terms considered ‘taboo‘ among the casino industry, but none so much as the word ‘saturation‘ in today’s flagging economy. New England casinos were once rather scarce, but a throng of new casinos – some theoretical, others already open, and more scheduled over the next few years – are starting to frighten operators.

I try not to use the word,” said Felix Rappaport, a high-ranking executive for Foxwoods Resort Casino’s, in a recent interview with local media. “No sense cursing the darkness,” he quipped. Rappaport said he’s more partial to the less alarming phrase, “competitive landscape”.

Call it what you will, the gambling market in and around New England is expanding at a rapid rate, and it could spell doom for many operators who once enjoyed a sizable slice of the revenue pie.

What is Market Saturation?

As the Portland Press Herald explained this week, “saturation” is a term used to denote the theoretical point at which “supply meets demand”. Once a market becomes over-saturated, that’s when operators really begin feeling the squeeze; losing customers, losing revenue, and in the end, facing potential bankruptcy.

We’ve already seen this happen in New Jersey, although the situation was a bit different. When hurricanes devastated the east coast a few years ago, the economy staggered so woefully that 4 of the state’s 12 casinos went out of business in 2014. However, it was a blessing for those operators that remained, as their revenue was boosted by the diminished competition.

Similar Fate for New England Casinos?

In New England, full-fledged casinos like Foxwoods and Mohegan Sun are the clear leaders, both situated in Connecticut. Over in Lincoln, Rhode Island, Twin River Casino has fared quite well for itself. Further north in Maine, the Oxford Casino and Bangor’s Hollywood Casino and Raceway are equally appealing to visitors looking to spin the slots reels or toss chips at the live dealer tables.

Two smaller casinos, which offer only slot machines and electronic table games, include Massachusetts’ new racino at Plainridge Park, and Rhode Island’s Newport Grand slots parlor. Even these locations have brought in enough revenue to justify their existence.

But that could all change very soon as a herd of new gambling facilities – some being resort style operations akin to those in Las Vegas – are preparing to encroach upon the New England casino market.

Make Room for Competition

A referendum on the November ballot in Rhode Island could see Newport Grand forced out of business if voter’s approve a larger scale casino for Tiverton. In Connecticut, Foxwoods and Mohegan Sun are already feeling the weight of Queens, NY’s Resorts World Casino, and that’s in the New York Downstate area. Two new casinos are scheduled to open in Upstate New York by 2020.

Another referendum could see voter’s this November electing to permit two new casinos in North New Jersey, eradicating a decade’s old law that kept all casino gambling in the state confined to Atlantic City. Those properties would be located near the New York border, and would certainly encroach on the market share in Connecticut, as well as Massachusetts, where Wynn Resorts is in the throes of building a $2 billion, 5-star casino resort in Everett called Wynn Boston Harbor.

Professor Clyde Barrow, a gaming expert and Chairman of the University of Texas Rio Grande Valley‘s Political Science Department, wrote a report in 2015 that was instrumental in Connecticut tribes winning approval for up to three new casinos in that state, and he believes there’s still room for growth in the region… at least for now.

Overall, the market in New England is continuing to grow,” said Barrow, “but there will be a saturation point.”

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