Massachusetts Governor Charlie Baker isn’t expecting gaming revenues to grow. Quite the reverse.
The budget in the second cycle since two casinos began operating in the state assumes that gaming revenues will decline in fiscal year 2021. Both the MGM Springfield and Encore Boston Harbor have underperformed on promises made to the Massachusetts Gaming Commission. Both MGM and Wynn Resorts, which operates Encore, claim that their casinos are growing into their full potential.
The budget assumes $283 million in taxes for 2021, a 3.75 percent decline from $294 million, which had been projected last year despite the casino companies’ protestations.
Former MGM Springfield president and CEO Michael Mathis (who recently was removed for underperformance) said in an interview in late 2019: “We’ve grown the market. We’ve missed some of our numbers, and I think we’re trying to figure out where the market is and where it’s going to go and how long it’s going to take to get there, but there’s definitely opportunities to bring new customers into this business.”
These figures are considerably lower than casino companies told the state nine years ago, when it legalized gaming. The Encore generates the lion’s share of the tax revenues, 70 percent. Bay State casino resorts are taxed at 25 percent of gross revenue.
The longest-lived casino in the state, Plainridge Park slots parlor, is expected to generate $68.9 million in taxes, a 16 percent decline from last year. Because it’s a slots-only casino, Plainridge Park pays 49 percent of its gross.
When lawmakers and proponents of gaming in the state were talking up gaming, they predicted that the state could bring in $400 million in annual taxes. However, that prediction assumed that the Massachusetts Gaming Commission would license the fourth casino, in the southeastern part of the state. This it has not yet done.
