Connecticut Casino Revenues Continue Their Dramatic Slide

Connecticut has just announced that for the first time since 1998 the northeastern state has collected more revenue from its lottery operation  than from the slot machines located at its tribal casinos. During the fiscal year 2013 ending June 30th, the state’s General Fund received a total of $312.1 million from the Connecticut Lottery Corp., while the Mashantucket Pequot and Mohegan tribes collectively transferred $296.4 million into the state government’s main spending account.
Gaming analysts believe the dramatic reversal in revenue is primarily a result of increased competition for casinos in neighboring states, and as professor Nelson Rose of Whittier Law School in Costa Mesa, California, explains: “Ten years ago, it would have been unthinkable. We have reached the stage where casinos have to be very careful because wherever they open up, there’s competition.”
Connecticut’s Mashantucket Pequot and Mohegan tribes currently pay 25% of their gross slots revenues to the state, under an agreement in which no other venues are allowed to lawfully operate commercial casino games in the state. Slots revenues then peaked in 2007 at nearly $430.5 million, but have since steadily declined to its current figure of $296.4 million. Estimates for the future are no more encouraging, though, with the Office of Policy and Management (OPM) predicting revenues will decline further to $285.3 million in 2014, $280.4 million in 2015 and $280.3 million in 2016.
“We’re basically saying it’s going to continue to slide. I don’t think anybody is under the illusion that they’ll be bouncing back to $350 million a year, $400 million a year. We’re hoping the slide ends and they stabilize soon, but we’re trying to be realistic about it,” commented OPM Secretary Benjamin Barnes.
On a more positive note, however, Connecticut has a huge $20 billion budget and the $600 million it collects annually in total gambling revenues is a drop in the ocean compared to the $10 billion it receives annually from personal income taxes. As OPM Secretary Benjamin Barnes, explains: “These [casinos, lottery] are important, but they’re not even in the top five [of state revenue sources]. For the Indian gaming payments, it is a budget issue for us, but more importantly, it’s an employment issue for southeastern Connecticut.”