MGC Puts Any Expansion of Gaming on Hold after Everett’s ‘High-Risk’ Designation

The Massachusetts Gaming Commission (MGC) has put a pause on any expansion of gaming into Roulette, Craps or Poker for the moment, with the backdrop of Gov. Charlie Baker’s pause on re-opening and the status of Everett as a ‘higher-risk’ community due to some recent, modest upticks in COVID-19 cases.

Encore Boston Harbor had been testing a very involved prototype of plastic and Plexiglas that they felt would allow patrons to safely be able to play stand-up games like Roulette and Craps – that amidst the backdrop of CEO Matt Maddox this month saying there is more demand at Encore than they can meet due to strong state restrictions. That prototype had been mentioned several times by Encore, and they had high hopes for it, but the MGC regulators and Commissioners felt now was not the time.

“In light of COVID-19, we don’t feel it would be appropriate to add new games,” said IEB Deputy Director Loretta Lillios. “We’re going to continue looking at it. They have seen pretty good compliance, but it’s something we’ll bring back to you at a later date…We’re mindful of the governor’s new announcement. From the IEB’s perspective, it seems expansion of operations at this time…would not be appropriate.”

Commissioner Enrique Zuniga said he agreed that the MGC should take things slow and follow the lead of Gov. Baker – who on Tuesday last week declared Everett and neighboring communities ‘higher risk’ than the rest of the state.

“I think there was an assumption we would let health data inform all we did and we would continue to monitor the situation around us,” he said. “While reopening appears to have gone very good with occupancy levels and adherence to the guidelines, it is still important to monitor public health data. Everett and Chelsea were identified recently as communities where there was an uptick and they are important places to monitor. I think it’s prudent to continue the way that we are now.”

Added Chair Catherine Judd-Stein, “At this point, it just wouldn’t be prudent to expand and we need to get this right.”

The news was disappointing to Encore Boston Harbor, certainly, though the company said nothing publicly. From the opening, the resort has hoped to be able to lead the nation in returning profitable games like Roulette and Craps – though their emphasis has been on public health and safety first. Still, they have indicated that demand will dictate any decisions on expansion, and Maddox said in an investor call two weeks ago that there is more demand at Encore Boston Harbor than they can meet with the restrictions. Brining back more games, and creating that demand, would be a key to bringing back the more than 1,400 employees that are still furloughed from the resort.

Gross Gaming Revenues

Not surprisingly, the MGC released Gross Gaming Revenues (GGR) for July and it was slim pickings compared to the months before COVID-19, but at the same time it wasn’t a total disaster.

It was the first release of revenues since March, which was shortened by the closure of casinos in the state due to the onset of COVID-19. The July revenues were shortened by two weeks as they were only allowed to open on July 12.

One of the highlights in the numbers was the slot machine numbers. Despite having far fewer machines due to social distancing on the gaming floor, the GGR for slots was $16.2 million with a hold of just 7.95 percent. That’s a similar hold to before the pandemic, and it’s only about $6 million off from pre-pandemic slot GGRs. That was a major highlight, also considering that the Coin-in was down to $204.5 million – which was more than $100 million shy of what was normal at Encore earlier this year.

Clearly, the downfall was the table games, which are restricted tremendously by COVID-19 regulations. They came in at $10.7 million in GGRs, which is about one-third of some of the best GGRs Encore had pre-pandemic.

In total, the Slot and Table GGRs were about 50 percent of what existed before COVID-19, at $26.977 million. Some of the best months at Encore saw total GGRs at $54 million.

Still, the limited July numbers come with nearly two weeks chopped off of the month, and with major restrictions on gaming. Initially, the numbers show there is a return to gaming and demand in the market. That was uncertain for Wynn Resorts just a few months ago in all of their jurisdictions – including China, Las Vegas and Everett – as the company felt there might not be demand for a return to in-person gaming worldwide.

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