Plainridge Park Has Big Month, But Can It Compete With Wynn And MGM?

[toc]Plainridge Park Casino fell short of early revenue estimates, but the small-scale slots parlor is building momentum in the otherwise sleepy town of Plainville, Massachusetts.

July 2017 was the casino’s second-best month to date in terms of gross revenue. Only July 2015 performed better, which just happens when the Penn National Gaming-owned casino first opened its doors to the public.

Top line numbers for Plainridge Park Casino

• Plainridge tallied $15.5 million in revenue last month.
• The casino’s slot handle was just shy of $200 million, at $194.6 million. Since opening its doors, Plainridge Park has seen over $4.2 billion wagered.
• The casino reported a payout percentage of 92 percent for its slot machines during the month of July.
• The total tax assessment for Plainridge Park – which incurs a tax rate of 49 percent on slot revenue – was $7,566,627 in July. Of that, $6.2 million were state taxes, while another $1.4 million went to the Race Horse Development Fund.
• During its two-year history, Plainridge Park Casino has generated $166 million to the state in tax revenue.

Where Plainridge Park’s taxes go

The total tax obligation of Plainridge Park Casino is 49 percent.

Plainridge sends 40 percent of its revenue to the state as taxes. That money is earmarked for local aid, such as the new town hall project that recently broke ground in Plainville.

The other nine percent of its tax obligation, which amounted to $1.4 million in July, goes tothe Race Horse Development Fund. That money subsidizes Massachusetts’ struggling horse racing industry.

A boon for the MA horse racing industry

Before the state pumped casino money into the horse racing economy, the industry in Massachusetts was on life support.

Ironically, one of the key beneficiaries of the money Plainridge Park is pumping into the RHDF is Plainridge Park.

Long before it was a casino, Plainridge Park was a harness racing track. It is a heritage it continues to this day. In fact, live harness racing is experiencing a “revival,” according to the Statehouse News Service.

Increased casino foot traffic at the property as well as the RHDF money helped spur the revival. That resulted in an increase in the number of live racing days and the size of the purses at Plainridge Park Casino.

According to local reports:

“Plainridge Park Casino is running 125 racing days, up from 80; purses have increased from $2.6 million in 2014 to $7.4 million in 2017, the live racing handle has more than doubled to $7.6 million to $18 million, and annual registered yearlings (one-year-old standardbred horses) have increased from 36 to 51.”

Two more casinos are on the way

Two resort-style casinos are under construction in Massachusetts, but opening day isn’t too far off.

MGM Springfield will open in September 2018, while Wynn Boston Harbor is eyeing the fall of 2019 for its official ribbon-cutting.

The amount of revenue being Plainridge Park generates will be a drop in the bucket when measured against the yet-to-open MGM Springfield and Wynn Boston Harbor. However, the amount of money each casino will pay in taxes won’t be all that different.

According to Massachusetts Gaming Commission Chairman Stephen Crosby, the state will receive about $300 million in tax revenue annually when all three casinos are operational.

Crosby’s estimates are based on MGM and Wynn contributing $75-$100 million each. Plainridge Park should rise to around $80 million, due to its steeper tax obligation.

Because it’s a slot parlor, Plainridge pays 40 percent on gross gaming revenue. By comparison, the state will tax Wynn and MGM at 25 percent of gaming revenue.

All three properties will be on the hook for the nine percent earmarked for the RHDF.