Question of the Day - 19 August 2019

Gangbusters.

Wynn Resorts' executives projected that the megaresort in Everett, Massachusetts, would do as much as $1.1 billion in its first year, a 12.5% return on investment. Now that figure looks modest.

In its first week of play, Encore Boston Harbor generated $17 million in revenue, $9 million of that from the slots, which were pulling in $361 per slot per day. (The desired industry average is $200/win/slot/day.) To put that in perspective, cross-state rival MGM Springfield came up just short of $20 million for the entire month and Encore’s win/table/day of $4,151 was almost triple MGM’s number. Nearby racino Plainridge Park took home $13.5 million, although its $376/slot/day average was better than Encore’s. To see how Encore stacks up against other major East Coast casinos, see our Stiffs & Georges blog.

Figures just released for the first month in business show Encore generating just under $50 million in gross gaming revenue, so the torrid pace of the first week slowed by about 27%. By comparison, MGM Springfield generated less than half that for the month, $20.4 million.  

It didn’t take long, however, for Encore’s first scandal to arrive. A class-action lawsuit against the casino is challenging its practices, particularly with regard to that eternal flashpoint, 6-5 blackjack. According to the lawsuit, Encore is supposed to be paying out at 3-2 on blackjacks, but is going with the more favorable (to the house) payouts “to maximize the casino’s advantage far in excess of that which is permitted.” Massachusetts law permits 6-5 blackjack under certain conditions, including playing with no more than two decks.

A second prong of the lawsuit accused the casino — not without reason — of rounding slot payouts down to the nearest dollar and not providing any signage explaining where players could get the coin still owed. Called before the Massachusetts Gaming Commission to account for this, casino President Robert DeSalvio said explanatory signs would be posted on property. To be fair, Foxwoods in Connecticut employs the same policy, as do other tribal casinos. But that doesn’t change the fact that Wynn Resorts did the proper thing only after being caught. 

The new signs read, “Machine only dispenses cash, ticket will print for change. Please take ticket to the cashier to redeem.” DeSalvio has also floated the idea of switching to ticket-in/ticket-out slots. They're the industry standard, so it kind of makes you wonder why Encore didn’t go that route in the first place. It won’t be cheap to fix.

As for the blackjack odds, the Gaming Commission upheld Wynn’s interpretation of the rules, after a brief (24-hours investigation into the matter. “There exists a ‘6 to 5 blackjack variation,’ the Commission ruled, "which is a particular type of blackjack game that is separate and distinct from standard blackjack,” wrote investigator Bruce Band.

The plaintiff’s attorney basically responded, "We’ll see you in court," so expect to hear more of this ongoing narrative.

Despite the fast out-of-the-gate start for Encore, DeSalvio actually tried to downplay expectations, saying, “I will tell you that it takes a while to ramp up and build these properties up to full potential — you have to build a database — so for us, there’s an expectation that it doesn’t come automatically, but it will come over time.”

It’s difficult to imagine Encore doing much better, but give Wynn Resorts credit for trying.