Several referendums on next week’s ballots will determine the future of the gaming industry in several states. Voters in Massachusetts, Colorado and California will have a say on issues that will impact many gaming companies.

Among the several gaming referendums next month, the two that have the most immediate impact for publicly traded casino companies are in Massachusetts and Colorado.

Massachusetts voters will decide whether to repeal the state’s casino law before any casinos even open.

Coloradans will decide whether to allow a casino next to Denver at Arapahoe Downs near the eastern suburb of Aurora.

So far, the political winds seem to favor the gaming establishment.

Polls in Massachusetts have shown a 10 to 12 percentage point lead for defeating the repeal, and that was before casino companies began their save-the-jobs advertising campaigns.

No poll has been published in Colorado as of this writing, but operators of existing casinos indicate their private polling shows the Arapahoe Downs referendum will fail.

A referendum to expand casinos beyond historic mining towns failed overwhelmingly a decade ago, and, while this effort might be closer, Coloradans appear happy with casinos as they are, they suggest.

What is at stake is different in each state. In Massachusetts, it would simply be a lost opportunity for the companies that have won casino licenses—MGM Resorts, Wynn and Penn National.

Of those, only PENN has spent money to build its slot casino in Plainridge. But any loss would be a one-time event, and PENN would move on from there.

The stakes are higher in Colorado. Black Hawk and Central City casinos would lose substantial business.

On the other side, referendum passage would create a gold mine for Twin River, the privately held Rhode Island company sponsoring the referendum.

There would be irony as Colorado legalized casinos as a way to raise money for the historic preservation in the former gold mining towns.

How much of a hit they would take is subject to speculation. Given that Black Hawk and Central City are an hour from Denver up mostly a two-lane mountain road, and that Arapahoe Downs is accessible by a limited access highway from throughout the Metro, a 20 percent or 30 percent loss would not be out of the question.

On the other hand, this is Colorado. Residents love their mountains. Indeed, one estimate is that 80 percent of Central City customers use the two-land so-called canyon road that forces them to drive through Black Hawk rather than the four-lane expressway that connects to Interstate 70.

People enjoy the scenery of the canyon road, is the anecdotal reason offered.

Likewise, Arapahoe Downs is on the eastern side of the Metro, meaning many area residents would still find Black Hawk and Central City competitively convenient.

And, of course, there’s the issue of critical mass. Lots of Black Hawk residents walk from casino to casino enjoying the differing personalities of each, and many stay in hotel rooms using the market as a getaway.

A common opinion is that the small, independent operators, lacking hotels and amenities, are the most vulnerable.

However, public companies have risk, too.

Isle of Capri gets about 15 percent of its EBITDA from Black Hawk and Ameristar less than 10 percent.

More is at stake for Century Casinos. It gets about 25 percent of its EBITDA from Black Hawk, and around 20 percent from Cripple Creek, which could find a racino nearby someday as the referendum would authorize.

CNTY, however, also has a variety of casinos and casino projects elsewhere, so Colorado is apt to become less important in the future.

Monarch Casino’s situation is the most interesting of the public companies.

MCRI gets around 30 percent of its property EBITDA from Black Hawk, and is expanding the former Riviera, which it bought in 2012.

But the real game-changer would come with a proposed redevelopment of Monarch into a destination resort with a 500-room hotel.

Assuming Monarch could do the same approximately $60 million in EBITDA as Pinnacle’s Ameristar, the markets only other destination resort, it would nearly boost overall company EBITDA by around 80 percent.

Articles by Author: Frank Fantini

Frank Fantini is principal at Fantini Advisors, investors and consultants with a focus on gaming.