Report Suggests Massachusetts Casinos Face New Gambling Reality

Officials from the Umass Donahue Institute’s Economic and Public Policy Research Group presented this week the findings of a pandemic economic impact study to the Massachusetts Gaming Commission (MGC), concluding that workers of color and female casino employees were most affected by layoffs.

Disproportional Distribution of Layoffs

The report, a top research priority for the gambling regulator in 2021, also outlined that the number of visitors to the three casinos evaluated, MGM Springfield, Encore Boston Harbor and Plainridge Park Casino had not returned to pre-pandemic levels.

As of January 2020, the three casinos employed a total of 6,520 but in mid-March, all three gambling establishments were closed and for more than a year later, they struggled to return to full-capacity operations.

Employment fell drastically: from 4,206, 1,909 and 416 to 1,854, 149, and 18, at Encore, MGM and Plainridge, respectively. According to the study, the workers who kept their places were mostly white and more male than the pre-pandemic workforce.

According to Thomas Peake, a senior research analyst at the UMass Donahue Institute, “the layoffs fell most heavily on people of color,” in line with the broader trend of crises usually affecting most heavily people who are a bit more vulnerable due to various socioeconomic factors.

“Young people, low-wage workers, women, [and] people of color bore the brunt of the job losses and reductions in hours. A lot of that was because of the sectors that those people are heavily represented in — food and beverage, gaming and recreation, hotel departments — these are areas with high concentrations of workers of color. They were also some of the areas that were most affected by the layoffs.”

Thomas Peake, Senior Research Analyst, UMass Donahue Institute

Peake continued that the three casinos failed to meet their “spending goals on minority- and women-owned businesses” during the closure period largely because while the gambling venues were closed, the businesses had fewer business needs.

Shifts in Gambling Behavior

Following the re-opening and the return of business, many of the laid-off employees were hired back and the casinos increased their workforce: Encore to 2,648, up 63% of January 2020, MGM up to 921 workers, or a 48% increase, and Plainridge’s headcount climbed to 252, up 61% as compared to the pre-pandemic levels.

Casinos managed to generate $84.1 million in gross gaming revenue in June 2021, the final month covered by the report, as compared to $80.25 million in January 2020, yet casino visitation numbers had not rebounded to pre-pandemic levels.

Peake noted that gross gaming revenue per visitor “shot up drastically” as a result of some shifts in gambling behavior following the re-opening of casinos. On average, patrons were spending two times more after the closures than before, the report found out.

The report also paid attention to the nationwide wave of sports betting legalization, considering it as “a new channel for revenues” and a chance to attract people who otherwise do not visit casinos, while cautioning that “a relocation of wagers to sports betting will result in lower profits to casinos and fewer tax revenues to the state.”