Twin River's expansion puts pressure on Connecticut casinos

Twin River Casino in Lincoln has “experienced explosive growth, intercepting hundreds of millions of Bay State dollars once spent at the Connecticut casinos, and finally growing spending by its own states’ residents who, for years, spent more money at the Connecticut casinos than at their own state’s largest slot parlor,” reads the Northeastern Casino Gaming Update from Barrow's Pyramid Associates.

The report forecasts magnified revenue and employment losses at Connecticut's two casinos as Massachusetts casinos begin to open later this year. But the study isn't nearly as grim for Rhode Island's facilities as Barrow notes that Twin River's proposal to add a hotel on its property will be more of a competitive pressure for Connecticut.

The report focuses on the overall revenue streams of the gambling facilities rather than any state's cut of revenue.

Twin River, which became a full-fledged casino in 2013 with the addition of table games, has seen its total revenues grow 68 percent since 2006, the study found. (While the state commonly measures revenue by the fiscal year, Barrow's report reflects calendar years.)

In 2006, while the property only hosted slots, Twin River generated $359 million total revenue with $207.5 million from Rhode Island residents and $145.4 million from Massachusetts residents. By 2014, Twin River saw $603 million in total revenues with $312.8 million coming from Massachusetts residents and $271.8 million from Rhode Islanders. That's an 8.8 percent increase in overall revenue compared to 2013.

The revenue increases at Twin River are attributed primarily to growth in table game revenue which spiked from $33.9 million in 2013 to $82.4 million in 2014, the first full year of table game operations at the casino. Non-gaming revenue at the facility increased by 8.8 percent to $54.3 million in 2014. Those increases offset a nearly 1 percent decline in revenue from the electronic terminals, which fell from $470 million to $466 million.

Newport Grand, however, has struggled. There, revenue from the electronic terminals fell 2.5 percent from $46.4 million in 2013 to $45.2 million in 2014. Non-gaming revenue at Newport Grand also saw a 2.5 percent decline.

The study was released as Twin River Casino announced plans Wednesday to buy the Newport Grand slot parlor for an undisclosed price. 

While a proposition by three investors last year to purchase the slots parlor was contingent on voters approving table games at the facility -- a measure that failed at the polls -- there was no talk of table games in Wednesday's announcement.

Asked what the merger could mean for the viability of Newport Grand and its ability to compete against forthcoming Massachusetts casinos, Barrow, a former director of the Center for Policy Analysis at the University of Massachusetts Dartmouth, said there are two possibilities.