 How do Massachusetts casinos compare? As owners of Boston-based women and minority-owned data science businesses who love to visit our Massachusetts casinos, we ask this question. So I, Monica Wahee, president of DeathWench Professional Services, let DeathWench do your data, and my colleague, Josie Haywood, president of Wiseye Incorporated, analyzed publicly available data on Massachusetts casinos and developed a white paper answering that question. If you want to read the highlights of our white paper, visit my blog and read my blog post about it. Or, if you want an actual copy of our white paper, connect with me on LinkedIn and give me your email address, and I'll send it to you. These links are in the description to this video. First, let's meet our Massachusetts casinos. Let's start with Plain Ridge Park Casino in Plainville, Massachusetts that opened in 2015. Horse racing used to be very popular in Massachusetts, as you can see by this picture from back in 2007 at the now-closed Suffolk Downs racetrack. Plain Ridge Park used to have a track, but they shut it down, and in 2015, put in a casino with slot machines, a couple of sit-down restaurants, a music stage, and a food court. Next, after Plain Ridge Park, in August of 2018, MGM Springfield opened in downtown Springfield, Massachusetts. MGM Springfield has a hotel, slot machines, and tables, and was built as a way of reinvigorating an economically depressed downtown. Also, MGM Springfield is perfectly positioned to compete with the casinos in nearby Connecticut, such as Foxwood and Mohegan Sun pictured here, as well as the casinos in Rhode Island. Finally, after MGM Springfield, Massachusetts got its first Vegas-style casino with Encore Boston Harbor, which is truly unbelievable from the outside as well as from the inside. Okay, now that we've introduced our Massachusetts casinos, let's get to know them by comparing them. Let's start by looking at the gaming floor. Encore has by far the biggest gaming floor at over 190,000 square feet, followed closely behind by MGM Springfield. The smallest gaming floor is at Plain Ridge Park, with almost 44,000 square feet of gaming space. It's not a surprise that we see a similar pattern with slot machines, but Josie and I found it interesting that MGM Springfield, while being smaller than Encore, actually had more slot machines, 3,000 compared to Encore's 2,500 in change. And Plain Ridge Park, with its smaller gaming floor, has half as many as Encore. Now, in terms of tables, the comparison gets really interesting, because Plain Ridge Park does not have any tables. Only MGM Springfield and Encore Boston Harbor have tables, and now you can see why Encore has fewer slot machines than MGM Springfield. Clearly, it has way more tables, over twice as many, taking up space on the gaming floor. Is this a good economic decision? We shall see in our analysis. Finally, we looked at hotel rooms per casino. Again, Plain Ridge Park does not have hotel rooms on site, but they have partnered with hotels nearby that offer discounts to casino goers. Still, as you can see here, Encore is clearly emphasizing their hotel business compared to MGM Springfield. Remember, MGM Springfield is near the casinos in Connecticut with huge towering hotels, so it is possible that de-emphasizing hotel rooms in this region is a wise decision. By the way, this information about Massachusetts casinos is available from annual reports from the Massachusetts Gaming Commission, or MGC, who regulates the Massachusetts casinos. But Josie and I were also interested in how Massachusetts as a state compares to other states in terms of casino performance. For that, we turned to a report by the American Gaming Association, or AGA. The AGA recently published a State of the States survey of the commercial casino industry. They published a table reporting Total State Gross Gaming Revenue, or GGR, for 24 different states as reported in 2018. GGR is calculated by subtracting the total winning payouts from the total amount wagered. For example, let's say in one month, casino customers put a total of $10,000 into a slot machine, and let's say in that same month, altogether, they win a total of $3,000 back. That would make the monthly GGR for that slot machine be $7,000. Not a bad deal, right? So let's look at Massachusetts GGR compared to other states. Here is a bar chart with the total GGR in 2018 by state from the AGA data. As you can see, Nevada is an outlier. Probably because what gets spent in Vegas stays in Vegas. But notice that the GGR for Massachusetts is relatively small, close to the end of the line. I wondered if that was logical, given its population. So I added population levels to the chart with a secondary axis. Okay, now you can see the population in dots added to the GGR in bars. The Massachusetts population was about 6.9 million in 2018. What other states have the same size population? I added this horizontal line to help me figure that out. As you can see, Indiana is the closest in population to Massachusetts. But its GGR bar is a lot higher. In fact, it's over 13 times higher. So of course, I wondered, why is that? This made me want to compare the casinos to each other and see if one was overperforming or one was dragging the others down. I noticed the revenue reports from each Massachusetts casino that I downloaded from the MGC website provided stratified GGR numbers. By that, I mean the total monthly GGR was stratified into monthly slot GGR and monthly table GGR. Since I had the total number of slots and tables at each casino from the annual reports, I invented a metric that could be used to compare the casinos. I called the metric efficiency. For monthly slot efficiency, the metric is monthly slot GGR divided by number of slot machines. For monthly table efficiency, the calculation is monthly table GGR divided by number of tables. Let's see how this works. Let's say there was a casino that reported a slot GGR that month of $2.5 million. And for the sake of easy math, let's say that this casino had 1,000 slot machines. Then, for the monthly slot efficiency, we divide $2.5 million by 1,000 slot machines and we'd get $2,500. So, that means that, on average, that month, each of those 1,000 slot machines at that casino took in $2,500 in gross gaming revenue. Of course, we'd like that to be higher, so this is a way to compare the three casinos. Let's start by looking at what we found for slot GGR efficiency. Here is our first analysis, the monthly slot GGR efficiency over time for all three casinos. As you can see, it's pretty disparate. But it was hard to compare, so I thought I'd make a grand mean and add that to the graph. Like this. As you can see, even though Plain Ridge Park has the smallest gaming floor, on average, it's pulling in over $10,000 of GGR per slot machine monthly. Then look at MGM Springfield. On average, it's pulling in only half as much per slot monthly. So, you can see there is room for improvement in MGM Springfield slot efficiency. Here's the efficiency analysis for the tables. Remember, Plain Ridge Park doesn't have tables, so this just compares MGM Springfield and Encore Boston Harbor. While MGM Springfield has an average monthly table efficiency of about $60,000 per table, Encore has almost twice that. Again, it looks like MGM Springfield could be doing better in this area. Finally, we have Payout Percent. This is a slot measure that is usually called Return to Player or RTP. Those of you who are familiar with online slot machines know that RTP for online slots is typically in the area indicated on the chart in gray and can be as high as 99%. The higher it is, the more payout goes to the player. But all three Massachusetts casinos are woefully low in their payout percent, which hovers just above 90%. This is a very uncompetitive RTP for a state that is trying to compete with out-of-state casinos as well as online casinos. Of course, we dug deeper into the data in our white paper, but as a result of our analysis, here are our six recommendations to Massachusetts casinos. First, improve gaming efficiency. For each slot machine or table on the floor, there is some overhead, making the slot machines and tables more attractive to customers so that they use them more would improve efficiency, pleasing both casinos and customers. Next, better meet demand for non-gaming activities. The MGC and the casinos want to emphasize the tourism aspect of the casinos and have casino goers engage in local non-gaming activities such as enjoying restaurants, trying out local hotels, or attending music events. However, right now it is not clear what the demand is for these activities. Offering the right non-gaming activities could actually improve revenue from gaming. Our next recommendation is to improve the payout percent of slot machines at Massachusetts casinos. That way, they can successfully compete with both online casinos and casinos in nearby states. Our fourth recommendation is to have the MGC and the casinos clarify their community priorities relative to their gaming priorities. On one hand, they say they are de-emphasizing gaming and encouraging non-gaming activities. Yet, their revenue reports do not mention revenue from restaurants or any metrics corresponding to activities that do not relate to gambling. With no metrics being requested, it's hard to feel that non-gaming activities are being prioritized by the MGC and the casinos. Our fifth recommendation is small but helpful, and that is to present the MGC annual reports all in one place. Right now, to get these reports, you have to search the publications archive. By contrast, to download the revenue reports for the casinos is relatively easy because the MGC puts them all on one page. So, we are just suggesting the MGC have a special page to post their annual reports so they are easier to find. And finally, our last recommendation is to develop and report non-gaming metrics. Plain Ridge Park is near Foxborough Stadium and some outlet malls. MGM Springfield has sports and music venues, but also showcases the beauty and the history of New England. And Encore is so close to Boston that visitors, like all Boston tourists, have unending choices of non-gaming activities. We hope you see the rationale behind our six recommendations and connect with me on LinkedIn if you want to read the whole white paper or just talk about data science and casinos. This video promoting the data science services of WISEI Incorporated and Deathwench Professional Services is a production of Deathwench Professional Services. Let Deathwench do your data.