2013-12-27 / Front Page

Slot Revenue Down

By Tom Shevlin

Video slot machine revenue collected from Newport Grand maintained its recent downward trend as competition from in- and out-ofstate gaming operators continue to cut into the former jai alai fronton’s market share.

According to the latest numbers from the Rhode Island Lottery Commission, the state took in roughly $1.4 million less from the facility for the most recent fiscal quarter than it did during the same period last year.

Lincoln’s Twin River Casino also took in less than the previous year; however, its drop of roughly $573,000 was outweighed by the $156 million it generated through video lottery terminal (VLT) action. Also seen as a factor was the decision by Twin River’s operators to remove roughly 200 machines from the casino floor in favor of live table gaming.

Those games, which were approved by voters in a November 2012 ballot referendum, have been performing well, and according to a recent report in the Providence Journal, the additional revenue taken in from those new tables is expected to make up any losses from a decline in VLT taxes.

Newport Grand, which remains a slots-only facility, had also sought permission to install table games last year. However, voters resoundingly rejected the proposal, prompting Newport Grand executives to rethink their marketing and business plan.

Prior to the November 2012 vote, Newport Grand CEO Diane Hurley warned that without new revenue streams, her facility could cease operations in only a matter of years.

With Massachusetts pushing ahead with its own plans to allow for resort-style casinos in areas as close as Boston and the South Coast, pressure is indeed mounting for lawmakers here to protect whatever it can of the state's gaming revenue. Experts believe that the locally-owned Newport Grand, which employs roughly 200 people and has a payroll of about $7 million, is particularly vulnerable to out-of-state casino competition.

According to the city’s most recent tax records, Newport Jai Alai LLC pays approximately $374,000 in property taxes on three separate parcels each year. Taken along with an estimated $562,000 the city received in VLT revenue in 2012 and another $10,000 or so in annual meals and beverage taxes, Newport Grand contributes roughly $900,000 to city coffers.

On a state level, Rhode Island officials expect to collect roughly $319 million in tax revenue from VLT activity from the two gambling facilities, with the lion’s share coming from Twin River’s 4,538 machines.

Typically, industry watchers point out that the period from July through October is noticeably slower than the winter and spring months, meaning there’s still time for the numbers to rebound.

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