🔒CT casinos face choppy recovery as pandemic fears wane

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Following last winter’s omicron surge, Connecticut’s two tribal casinos are showing signs of a recovery, but the bounce back from the global pandemic has been choppy, and will likely continue to be with other emerging issues creating headaches.

Foxwoods Resort Casino, owned and operated by the Mashantucket Pequot Tribe, reported gross slot gaming revenue of $30.4 million in March, up 2.4% from a year earlier.

Just down the road in Uncasville, Mohegan Sun, owned and operated by the Mohegan Tribe, reported gross gaming revenue of $44.7 million for the month, a 2.8% gain over the same period last year. The state receives 25% of the slot hold, with the tribes retaining all of their table game revenue, which isn’t publicly disclosed.

Total slot wins by both casinos for February, in comparison, were 24% higher than the year before, while January figures fell significantly short of the same period in 2020, right before the pandemic reached Connecticut’s shores in full force.

Year-over-year comparisons remain complicated by the ebbs and flows of infection surges with the ongoing coronavirus pandemic. Officials from both casinos said that as infection fears lessen in the pandemic’s third year, there’s reason for optimism.

But they still face ongoing challenges, including the threat of future COVID variants, the falloff in global tourism and other consequences of the war in Ukraine, as well as the impact of high inflation, particularly rising gas prices, on consumer spending.

“There’s definitely a lot of uncertainty,” said Jason Guyot, chief executive officer at Foxwoods.

Given these realities, the casinos’ southeastern Connecticut locations offer a big advantage as more people staycation and choose a local resort as a getaway over destinations that require flights or long road trips.

“We’re in a densely-populated region,” said Jeff Hamilton, president and general manager at Mohegan Sun. “We’re already seeing the trends in the market, people deciding to do something local as opposed to flying, for cost-related or other reasons.”

Sports betting, iGaming boost

Though the pandemic has been an unprecedented crisis for both casinos, their business rebounded in 2021 as mandatory operational, capacity and travel restrictions were lifted and despite infection waves.

Both operations implemented many safety and mitigation measures, as dictated by the state, federal health agencies and even their respective medical advisors. One benchmark, their combined total slot machine revenues, was $866 million last year, about a third higher than 2020 revenues, though still below $982 million earned in 2019 before the pandemic hit. (The state collected $216.5 million in 2021 from the tribal slots.)

In comparison, last year was the best ever for the U.S. commercial casino industry, which earned $53 billion in revenues, up about 21% over the year before. Almost $45 billion was earned at traditional brick-and-mortar locations, though sports betting and iGaming revenue leapt 158% from 2020 and now accounts for about 15% of total annual revenues.

Tribal casinos report revenues separately but have seen similar trends, though revenues have varied by region, depending on COVID infection rates and restrictions, said Clyde Barrow, a gambling industry expert and professor at the University of Texas-Rio Grande Valley.

Connecticut’s tribal casinos are now benefiting from growing revenue streams generated by Connecticut legalizing in-person and mobile sports betting and iGaming since October of last year. The state receives 13.75% of gross gaming revenue for sports betting and 18% for online casino gaming, and both sectors have been generating revenues at steady levels for the first three months of this year.

Online casino gaming, with interest booming since the pandemic, remains a top draw. According to available statistics, Foxwoods, which has partnered with DraftKings for online betting and gaming, kept $10.2 million in online casino revenues in March. Mohegan Sun, which has partnered with FanDuel, kept $8.1 million from its online casino platform for the same period.

Mohegan Sun kept $3.5 million in online sports betting operations from March wagers, and Foxwoods kept $2.5 million.

Barrow said sports betting is generating new revenues for casinos and also drawing in Gen Y and Millennials, who are spending money on other gaming activities as well as food and beverages.

“By itself, sports betting isn’t an immense source of revenues for big casinos yet, but in some way, it’s having a bigger impact by drawing in younger gamblers,” he said.

Hiring incentives

Neither resort is functioning yet at full capacity, with officials at both noting a downturn in senior-citizen guests, who have proven most vulnerable to COVID.

Currently, many infection mitigation strategies, such as mask requirements for guests and employees, have been lifted at both operations.

But some non-gaming amenities, restaurants such as buffets, remain closed, and both casinos are still running gaming operations with a reduced total number of slot machines and gaming tables compared to pre-pandemic levels.

Mohegan Sun’s Hamilton said he expects that trend to continue. Table game seats at the resort are now limited to four compared to six pre-pandemic, he said, and slot machines are less-densely bunched.

“We think it creates a better experience to give people more space, and we’re looking to do that with every aspect of our operation,” he said.

Both resorts have also boosted the availability of electronic table games on-site as an alternative to guests sitting together at tables. Foxwoods, for example, has 80 electronic table games, featuring blackjack, roulette and baccarat, with three live dealers serving multiple players at their gaming stations, Guyot said.

Both casinos have also been installing more touchless options, as a way to gain staffing efficiencies since they’re competing for workers in a tight labor market.

Guyot said Foxwoods has been beefing up bonuses, annual pay including minimum wage increases, and benefits packages to recruit and retain employees.

“It’s a really competitive environment right now and people have a lot of options,” he said.

Similar workforce retention tactics are underway at Mohegan Sun, said Hamilton, including signing bonuses ranging from $500 to $2,000 for new employees depending on the position.