Plainridge raises stakes for gaming market share

LISTENING CAREFULLY: John E. Taylor Jr., chairman of Twin River Worldwide Holdings, said the casino is always trying to understand what its customers want, looking to differentiate itself in the marketplace, and that approach will continue with the coming of the slots parlor at the new Plainridge Park Casino. / COURTESY TWIN RIVER
LISTENING CAREFULLY: John E. Taylor Jr., chairman of Twin River Worldwide Holdings, said the casino is always trying to understand what its customers want, looking to differentiate itself in the marketplace, and that approach will continue with the coming of the slots parlor at the new Plainridge Park Casino. / COURTESY TWIN RIVER

In about a year, the Twin River Casino will be competing for part of its gaming dollar with slot operators in Plainville, Mass.
So, too, will Connecticut’s resort destinations, Mohegan Sun and Foxwoods Resort Casino.
With the groundbreaking on March 14 for newly licensed slots play at Plainridge Park Casino in Plainville, Massachusetts gaming is no longer some distant reality. And those existing casino owners who’ve had years to hone a strategy for the eventuality of Bay State gaming will soon have to show their hands in the bid to protect market share from a new player.
At Mohegan Sun, for example, events and amenities that have no connection to gaming are taking on increasing importance as a way to introduce new visitors to slots and table games.
Mohegan Sun will host for the first time in Connecticut the June 28 Reebok Spartan Race, a global obstacle race series, on the grounds of the tribally owned casino, said Bobby Soper, the casino’s president and CEO.
Soper says that diversification beyond gaming keeps the casino healthy financially, noting that the timing of the race in relation to developments in Massachusetts, which includes Mohegan Sun’s own proposal for a resort casino in Revere, is coincidental. By mid-March, the race had signed on 70 percent of about 8,000 likely participants, he said, and an additional 5,000 spectators are expected.
“We’re always trying to provide a product that is a differentiator [from] all of the competition in the Northeast by creating a ‘wow factor,’ ” Soper said.
John E. Taylor Jr., chairman of the board of directors for Twin River Worldwide Holdings, the parent company for Twin River, told Providence Business News that marketing and offering diverse amenities are just some of the strategies at work to keep Twin River profitable in the face of Massachusetts competition.
He declined, however, to name any new tactics. “We do have much more specific plans about how to react to slot-parlor competitor in Plainville,” Taylor said. Since casinos study each other’s marketing schemes while designing their own, he added, “we’ll develop plans around their approaches.”
In the meantime, Taylor’s focus is on Twin River’s financial stability and diversification through its upcoming acquisition of the Hard Rock Hotel & Casino in Biloxi, Miss.
“We knew that this was coming,” Taylor said, referring to Massachusetts gaming competition, “and from the moment I got involved with the board in November 2010, we’ve had a plan and executed against that plan quite successfully, and we’re going to continue to do that. We have a unique understanding of how to market to players and that’s not going to go away when competition comes.”
Besides the 1,250 slot machines due in the coming year at the Plainridge Park, Massachusetts law allows up to three larger resort casinos within the next few years.
Proposals for new commercial resort casinos have been pitched by MGM Springfield in Springfield, in western Massachusetts; Mohegan Sun in Revere and Wynn MA LLC in Everett in the Greater Boston area; and KG Urban Enterprises in New Bedford and Foxwoods Resort Casino in Fall River, in the southeastern part of the state. Tribal casinos on Martha’s Vineyard and in Taunton also could materialize.
Taylor maintains that Twin River holds its own against the Connecticut casinos, which he referred to as “pretty sophisticated operators,” with the Rhode Island casino garnering more than a 28 percent “market share” in 2013, compared with 18 percent in 2007. Those figures pertain to Twin River’s share of the gaming market in the two states.
Aided by the addition late last year of table games, slots revenue increased at Twin River between 2009 and 2013, not only in net revenue but in the transfer of money to the state, while revenue dropped off at Newport Grand, according to data listed on the Rhode Island Lottery website. According to online charts, Twin River’s 4,700 slot machines, which decreased to 4,535 by the end of fiscal 2013, brought in $472.6 million in annual net revenue, about $75 million more than the $396.6 million brought in with 4,744 slot machines in 2009. Also in 2013, the transfer to the state from Twin River was $288.9 million, up compared with 2009, when the transfer was $242.3 million.
In contrast, Newport Grand’s annual net revenue in fiscal 2013 was $48.1 million with 1,088 slot machines, compared with $64.2 million from 1,431 slot machines in 2009. In 2013, Newport Grand’s transfer to the state was $29.7 million, down from the $40.8 million transferred in 2009. Newport Grand CEO Diane Hurley could not be immediately reached for comment.
“Even if Twin River were to shrink by 50 percent, that doesn’t mean it won’t be a profitable facility,” said Clyde Barrow, director of the Center for Policy Analysis at the University of Massachusetts Dartmouth. “Out of 11 casinos in Atlantic City, only three generate more gross gaming revenues per year than Twin River.”
Yet, within the next five years, the impact on diminished profits could come, Barrow contends, in the form of a reduction in the facility’s 1,550 jobs, further reduction in the number of slot terminals and a drop-off in revenue to the state, which is already struggling with the highest unemployment in the country.
Gov. Lincoln D. Chafee has projected Rhode Island gaming revenue could suffer as much as a cumulative $419 million hit through 2019 if four Massachusetts gaming proposals materialize, according to information provided by Chafee spokeswoman Faye Zuckerman. The state receives about 61 percent of the slot machines’ net winnings and 18 percent of table games’ gross revenue, said Paul Dion, chief of the R.I. Office of Revenue Analysis, a division of the R.I. Department of Revenue. “The [Plainville] slot parlor is going to have to compete with the resort casinos just like Twin River will,” Dion pointed out. “Twin River still has the advantage of 80 table games and [more than] 4,500 slot machines.”
Taylor is even more optimistic, pointing to the casino’s strong balance sheet and expected acquisition of a Mississippi resort casino later this year.
Twin River wrote off its debt when it emerged from bankruptcy in 2011, Taylor said, and continues to carry a low leveraged ratio of debt to assets in comparison to its competitors.
Diversifying through table games is also adding revenue and attracting a different kind of player, one to which Taylor says the casino will try and cater.
“We’re going to let the market talk to us,” he said. “We’re six months into tables, and we happily introduced Twin River to a whole new demographic of player. We’re starting to get to know them and understand what their preferences are.”
For instance, food and beverage sales are up 30 percent and some food outlets are up more than 100 percent. The Asian restaurant in the food court caters to “a significant number of Asian players” brought in to play the tables, he said.
“That’s a sign to us,” he added. “The woman that owns that restaurant was really good at cooking traditional Chinese food. So we learned something and reacted to it.”
He declined to elaborate on the prospect of adding a hotel, which is before the General Assembly as legislation, unsolicited by the casino, except to say: “Historically, we’ve said we’re a convenience casino and we think we’re going to continue to be a convenience casino. If that ever changed – if we ever thought we needed a hotel – any discussion would first include our host community, the town of Lincoln.” •

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