Inside Asian Gaming

inside asian gaming May 2016 76 US think-tank says new casinos no longer add to state coffers America’s Rockefeller Institute of Government published a paper suggesting America’s expansion of gaming capacity may be reaching a stage of negative returns. For cash-strapped states looking for extra tax revenues, it said, opening new casinos brings “Short-Term Relief, Long-Term Disappointment.” To support this claim the think-tank noted that between 2008 and 2015, inflation- adjusted tax and fee revenues from US commercial casinos grew by more than US$1.3 billion in states with newly authorized casinos, but fell by US$1.4 billion in states with established casinos, for a net national decline of 1.5%. National lottery revenues, meanwhile, fell by 0.7% in real terms last year, with 27 states reporting declines. Since the financial crisis of 2008 and subsequent fall in tax revenues, more than a dozen American states have legalized casino gambling. The expansion, says the Rockefeller Institute, has increased competition for the same pool of customers, “particularly in the northeastern region of the nation, where weakening growth has been partly attributable to market saturation and industry cannibalization.” State officials thinking about expansion or legalization of new gambling activities, the report said, should carefully weigh up the pros and cons. It added, “History shows that in the long run growth in state revenues from gambling activities slows or even reverses and declines, so it’s important to take into consideration market competition within the state and among neighboring states.” Massachusetts blocks fifth casino The Massachusetts state Gaming Commission rejected plans for a US$677 million casino-hotel in Brockton out of concerns over competition from a tribal casino being built some 20 kilometers to the south in the city of Taunton. Commission member Eduardo Zuniga said the Brockton casino, which would have been the fifth in the state, would have fractured the region’s market, undercutting his agency’s goal of “building a long-lasting and robust gaming industry.” Local businessman George Carney had proposed the casino in partnership with Chicago-based developer Neil Bluhm. Carney said, “I feel bad for the people of Brockton because they desperately need INTERNATIONAL BRIEFS the jobs and the city needs the money.” But in Taunton, Mashpee Wampanoag Tribal Council Chairman Cedric Cromwell praised the commission for making a “difficult but wise and just decision.” The Mashpee began construction of their US$1 billion First Light Resort & Casino (pictured) on reservation land in Taunton earlier in the month. An earlier agreement struck between the tribe and state specified that the casino would not pay taxes unless it received exclusive rights to the region. A commission-sponsored report found that, if the rival Brockton project was allowed, Massachusetts would have forfeited some US$42 million annually; revenues which the Taunton project will now pay. The Brockton developers have funded an ongoing federal lawsuit that challenges the US Interior Department’s decision to grant reservation status to the Taunton land. Because of this status, the Mashpee need no permission from Massachusetts to open a casino. The tribe say they are confident they will prevail in court. Massachusetts legalized casino gambling in 2011. A slot parlor opened at Plainridge Park in 2015 and two casino resorts, MGM Springfield and Wynn Boston Harbor, are under development. AC casino profits rebound, city woes continue Atlantic City’s eight casinos saw their total operating profit increase 40% last year, according to figures released by state regulators. Collectively, the gambling halls reported US$547 million in gross operating profit in 2015, up from US$390 million in 2014. “To me, that’s an indication that the market is stabilizing after several years of turmoil,” said Casino Control Commission Chairman Matthew Levinson. Referring to the four casinos that closed in the city in 2014, however, Senior Vice President of Operations at the Borgata Casino Hotel Joe Lupo said simply, “Less supply in the market meant more demand for each property.” It’s not clear what the improved fortunes of the surviving eight properties will mean for the city’s desperate finances. Borgata, which reported US$216 million gross operating profit in 2015, is withholding payment of tax in lieu of US$62 million a judge has