Massachusetts Governor Baker’s 25% capacity rule is death warrant for Casinos: Richard McGowan

Massachusetts Governor Baker’s 25% capacity rule is death warrant for Casinos: Richard McGowan

Massachusetts Governor Charlie Baker’s recent decision of lowering casino capacity will act like a death warrant for the state’s gaming properties, especially for those which are dependent on slot machines for their revenues, an expert warned.

Gov. Baker, who is considered to be a liberal republican, recently lowered casino gaming floors’ capacity to 25 per cent to help prevent a second wave of the COVID-19 pandemic, which has already claimed thousands of lives in the state.

After remaining dormant for months due to the deadly health crisis, casinos started resuming operations in July, albeit at curtailed capacity and with a string of restrictions in place. As the gaming industry has long been struggling to survive, any new restrictions are just to add to its hardships. Some industry experts have even warned that the state governor’s new restrictions could drag the struggling industry to death.

Boston College Prof., Rev. Richard McGowan warned that the capacity limit of 25 per cent could force many gaming properties in the state to permanently discontinue operations. However, those properties that rely on revenue from table games, food and entertainment might not hurt much.

Commenting on the new restrictions, McGowan said, “If a casino is dependent on slot machines for their revenues, then 25 percent capacity is a death warrant. If the casino is one that depends on high rollers, i.e., table games and large expenditures on food and entertainment, then it might not hurt as much.”

After closely following and analyzing New England gambling trends, McGowan predicted that some venues like Encore Boston Harbor might be able to survive if the high rollers continue to fly into Boston. However, lack of patrons will hurt venues like MGM Springfield and Plainridge Park Casino a lot.

In November, MGM Springfield reported gross gaming revenue (GGR) of just $10.5 million. The figure represents a decline of 40 per cent from the previous month when the casino generated $17.5 million in GGR. November also represented a year-over-year downturn of 47 per cent, when the venue won more than $19.9 million. Encore Boston Harbor’s GGR slipped 33.5 per cent month-over-month and 40 per cent year-over-year to $27.3 million in November.

While numerous experts have warned placing casinos under the 25 per cent capacity limit could have a very adverse impact on the gaming industry, Gov. Baker reiterated that the move was essential, given the recent surge in COVID-19 cases.