REPORT: FitchRatings Warns of Impact on Twin River
Thursday, July 30, 2015
The latest report issued by the rating service Fitch finds that the new Plainridge Park Casino is taking a bite out of Twin River despite the Rhode Island-based casino’s claim.
“(Twin River)Management noted that they did not lose many customers to Plainridge yet. However, the Twin River customers from Massachusetts are now spending less as part of their gambling budget is spent at Plainridge. Management expects to lose some Massachusetts customers after the trials but expects to retain the bulk of the Rhode Island players…”
Fitch, an important business analyst group found that there is some Rhode Island business trying the new facility, “We observed a busy Plainridge on a Friday morning with almost all Massachusetts license plates in the garage (management said about 20% of business comes from Rhode Island). Penn is aggressively marketing in both states with the intent to build a seasoned database by the time other Massachusetts casinos open.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTFitch reports:
The addition of Plainridge Park Casino to the New England gaming landscape has heated up the competition for gamers, according to Fitch Ratings. Plainridge is the first casino to open in Massachusetts under the ownership of Penn National Gaming.
Fitch analysts recently visited Plainridge as well as Twin River in Lincoln, RI and the two tribal casinos in Connecticut (Foxwoods and Mohegan Sun). The trip confirmed our view that Plainridge will deliver solid return on investment (ROI) at least in the first three years until Wynn Everett opens in late 2018.
We also believe that Twin River will continue to get considerable business from Massachusetts, albeit less and at a lower margin. We anticipate only modest impact on the Connecticut casinos, but expect Foxwoods to be hurt more than Mohegan Sun given its closer proximity.
Fitch estimates Plainridge will generate $176 million and $44 million of annual revenue and EBITDA, respectively, until Wynn Everett opens. This represents 18% ROI and will allow Penn to cover over 60% of project cost before additional competition comes on line.
We expect Boston and Springfield projects to open late 2018. The southeast region license remains in limbo as the regulators decide whether to award it to a commercial operator or wait until Mashpee Wampanoag Tribe gets its land placed into trust by the Department of Interior, a prerequisite for casino construction.
Related Slideshow: How Do Twin River Casino and Plainridge Park Casino Match Up?
With Plainridge Park Casino opening in Plainville, MA, GoLocal looked into how the new facility will measure up against Twin River Casino in Lincoln, RI.
Defintions:
1.) Payout Percentage: How much of each dollar spent is won back by a customer.
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