Will Foxwoods Funded Fall River Casino Sink Newport Grand?
Wednesday, January 29, 2014
With Foxwoods looking to vie for a resort casino license in Fall River, Rhode Island elected officials are keenly aware the new development just over the state's borders could present an even greater impact on the state's bottom line -- and the future of Newport Grand in particular.
Senate Majority Whip Maryellen Goodwin, who chairs the Joint Committee on Lottery, which meets regularly to oversee lottery operations, including Twin River and Newport Grand, provided the following statement on the scenario.
“The Senate is monitoring developments in Massachusetts as they consider options for where to locate gaming operations. A casino in Fall River could have serious ramifications for Rhode Island’s gaming facilities, particularly nearby Newport Grand. Newport Grand and Twin River are vital partners in Rhode Island’s gaming industry," said Goodwin.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"We are very mindful of the challenges they face as casinos come to Massachusetts. We will continue to be sensitive to the need to maintain the viability of the facilities and preserve the revenue stream they provide to the state.”
Approximately 25 miles from Twin River -- and 20 miles from slots parlor Newport Grand -- a Fall River casino would present a new angle in the competition in the region to attract visitors.
"We've known Massachusetts casinos are coming, it's always been a question of not if, but when," said Twin River spokesperson Patti Doyle. "We get a little more concerned about proposals closer to Rhode Island's borders than the Springfield area. At the end of the day, we have to control what we can, and that's a great guest experience -- and let the process unfold."
While Twin River was successful in its efforts to get voter approval of table games in 2012, Newport residents voted them down for Newport Grand, which has seen revenue drop from $86 million in 2006 to $54 million in 2011 and 2012, prompting the Aquidneck Island slots parlor to seek relief from the General Assembly during the last session.
Impact on Newport Grand?
In his 2013 "New England Casino Gaming Update," UMass Dartmouth's Center for Policy Analysis Director Clyde W. Barrow estimated that 2012 total revenues for Twin River were $527 million in 2012, compared to $509.5 million in 2011, for a year-to-year increase of 3.4% -- and gross gaming revenues increased by 3.3%, from $462.8 million to $478.2 million, during the same time frame.
Barrow estimated that total revenues for Newport Grand (excluding simulcasts) were $54.6 million in 2012, compared to $54.5 million in 2011, which was the first time in eight years that Newport Grand did not report a year-to-year revenue decline.
However, Barrow noted for Newport Grand that 2012 total revenues were $32.2 million (-37.1%) lower than the slot parlor’s 2004 peak revenue year.
A provision in the Rhode Island state budget last year allowed Newport Grand to keep an additional $1 million of the revenue generated by the video lottery terminals for the next two years. The venue had asked for an additional $1.5 million for each of those years.
In a statement released by the Senate press office, Rep. Marvin L. Abney (D-Dist. 73, Newport, Middletown), who had co-sponsored the original legislation with Senator Goodwin, said “Our community relies on the many hundreds of thousands of dollars we get directly from Newport Grand, as well as the far greater effect it has on our area in terms of the jobs it provides and the money that its visitors spend nearby. We need Newport Grand to succeed, because if it suffers, Newport and the surrounding communities will also feel that pain,” said Representative Abney.
In his most recent report, Barrow noted, "Twin River has also cannibalized Newport Grand since its 2007 improvements. Newport Grand Slots reported seven year-to-year revenue declines before revenues finally stabilized in CY 2012. The revenue declines at Newport Slots are partly due to a decline in its Southeastern Massachusetts customer base, which have some of the lowest incomes in the Bay State, while suffering with some of the state’s highest unemployment rates. However, Newport Grand has also seen a significant portion of its Massachusetts customer base diverted to Twin River."
Barrow noted that for calendar year 2012, Massachusetts residents contributed $163.7 million to the Rhode Island state treasury "as a result of its citizens’ gaming and other gaming related expenditures in that state" - and Rhode Island residents contributed $149.6 million in the same time frame.
Newport Grand owner Diane Hurley did not respond to request for comment on the Foxwoods' Fall River announcement on Tuesday.
Foxwoods, Massachusetts -- and Rhode Island
The Fall River proposal marks the second attempt by Foxwoods to expand into the new Massachusetts casino market. In November, voters in Milford, MA voted down a $1 billion Foxwoods' proposal for a resort casino in their town.
Whether or not Foxwoods is successful in its efforts, CES Boxing promoter Jimmy Burchfield, who runs events in the New England region, thinks Twin River can remain strong in light of competition from Massachusetts, whether it's Fall River or another market.
"I think that good competition doesn't present an issue," said Burchfield. "Twin River has a market, and the market they have fits a certain segment.
Of competition possibly coming in the way of Fall River, Burchfield said, "It may affect us to a certain extent, but we've got a real niche at Twin River. People buy season tickets, and come for the easy parking, the food courts. We have loyal people who follow CES, they like what I do, we'll continue to do our job the best we do."
Burchfield continued, "We just had a MMA show when it was 5 degrees out. I had dinner on Federal Hill beforehand, and all the restaurants were dead -- but when we got to Twin River, it was like Times Square on New Year's Eve. Their customer service service is important. If you take care of your clientele, you'll stay focused on what you're doing, and be successful."
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