Encore Boston Harbor Casino | 1 Broadway | Everett

Equilibria

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I was thinking about how strongly the theming at Encore deliberately evokes Chinese aesthetics. How much do we think that is trying to appeal to the local Asian American population and how much is trying to appeal to Chinese nationals?
It's Chinese nationals, either those here for business or those visiting students/colleges.
 

whighlander

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It's Chinese nationals, either those here for business or those visiting students/colleges.
Equilibria -- sounds as if due to the Wuhan Coronavirus -- not too many of either will be flying into Boston for a while at least

Last flight into Logan from China is today -- after that for the duration only 7 airports will be allowed to have any flights to/from China with the only one in the entire Northeast Corridor being JFK
 

whighlander

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2/8 from Symmes Arlington. I really do love the color of this one.

IMG_0271 by David Z, on Flickr
DZH -- just a bit off topic -- but have you ever gotten a shot showing the two really Really-Big Natural Gas fired generation units cranking a spewing a giant plume on each of the stacks

I was driving down Rt-2 Sunday at noon -- about 3 weeks ago -- heading for my volunteer thing at the MOS -- and it was as if someone had two huge Tea Kettles ready to pour the water on the tea leaves -- spectacular plumes sticking nearly straight up for roughly 2X the height of the stacks

Unfortunately -- by the time I'd gotten my camera limbered-up and ready to go the view of the stacks was obscured by the nearby terrain and structures -- Damn would have been a spectacular shot
 

jass

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More trouble in paradise

Encore Boston Harbor continues to struggle in Massachusetts. The $2.6 billion casino reported a 10 percent decline in gross gaming revenue (GGR) last month.

Casino win for Encore Boston totaled $48.57 million in January. That’s a 10 percent decline compared to December, when the casino kept $54 million.

Encore’s struggles weren’t felt at the state’s two other casino properties. MGM Springfield GGR came in just shy of $21 million, a 10.5 percent gain on December. Plainridge Park, the slots-only facility, won a little more than $11 million, which was a $1 million premium on the prior month.

Wynn projected its first-year full GGR would total $800 million. Through seven full months, casino win is at $362.5 million. Encore Boston continues to alter its operations away from the VIP towards more of the general public, the latest developments being lower table minimums and cheaper food offerings.

...

MGM told the state its casino would win around $34.8 million each month. Since opening in late August of 2018, the casino has never once hit even the $30 million mark. Its best month on record was its first – September 2018 – when GGR was $26.9 million.
 

meddlepal

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I think they massively misread the Boston market.

Not gonna feel too bad for them if it tanks.
 

kjdonovan

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Not gonna feel too bad for them if it tanks.
Unless you live in another city, I think you're going to feel bad if this place closes. I've never spent a quarter on the gaming floor but value the millions in environmental cleanup, expanded paths, beautiful gardens, job creation and incentive to transform an industrial afterthought.
 

DZH22

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If Massachusetts approves sports gambling the revenue should improve. I think they made some early errors with this, in particular cutting the "frills" that actually might attract more people, such as the arena-type venue. Also, what kind of casino hotel doesn't have a (huge) pool? I went once and there really wasn't much of anything to do here besides gamble or go to an expensive restaurant. I do want to return one more time to try the buffet but that's it.
 

jass

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Wynn is arguably the most successful casino operator in the world. The Wynn in Vegas is the most profitable casino in the US. And Wynn's table game pricing policy is entirely in line with standard industry best practices and economic theory.

Unless you have any evidence that Wynn doesn't know what they're doing with respect to game pricing, I'll move forward under the assumption that they do.
I wonder if you still stand by this?
 

Ruairi

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If Massachusetts approves sports gambling the revenue should improve. I think they made some early errors with this, in particular cutting the "frills" that actually might attract more people, such as the arena-type venue. Also, what kind of casino hotel doesn't have a (huge) pool? I went once and there really wasn't much of anything to do here besides gamble or go to an expensive restaurant. I do want to return one more time to try the buffet but that's it.
This, not sure what they were expecting.
Boston is a sports mad city, tap in to that and they'll do ok.
I doubt they are that concerned about 2020 revenue. They are thinking 10 years out.
 

JumboBuc

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I wonder if you still stand by this?
I'm not really sure why you keep dragging on about this, but yes, I do. See my initial post that your quote was in reference to:
I am sure that Wynn knows what they're doing with respect to game pricing. The reason weekend games are so expensive is because they can set minimums that high and still fill the tables. When demand drops and the tables stop filling up at $50 minimums, then the minimums drop and the tables fill up again. Basic econ 101: when demand is variable but supply/marginal cost of production is fixed, price rises and falls with demand but quantity of output stays constant.
When supply is fixed it is optimal to set prices high when demand is high, then lower prices as demand drops. This is standard best practices across all industries where supply is relatively inelastic, and everybody does it.

Note that Wynn revenue decreased in January as table pricing went down. This is in no way evidence that initial high table pricing (when revenue was also higher) was a mistake. If it were indeed true that initial pricing was too high, you should expect to see revenue increase as prices come down. The opposite of that is happening.

Demand is lower, table prices are lower, revenue is down. It all fits.

Is Encore's revenue below projections? Yes. Is this proof that Wynn's table pricing strategy (setting table minimums high when demand is high and tables are full, lowering minimums when demand is low tables open up) is wrong? Absolutely not.

Many people on this forum, myself included, have suspected that Massachusetts gaming revenue forecasts have been overly optimistic all along. This is panning out to be true across the board: for Wynn, MGM in Springfield, and Plainridge Park. And Wynn has actually been outperforming its Massachusetts competitors. I never said that Wynn would crush it or exceed forecasts, just that their table pricing strategy made sense given the characteristics of the market. That point still stands 100%.

If you trying to get some "gotcha" moment by digging up old posts, it isn't working here.
 
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jass

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Not trying to get a gotcha moment, just wondering if your thinking has evolved.
 

dshoost88

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I think the items Encore needs to address to broaden its appeal and increase revenue are to construct the pedestrian bridge to Assembly Station, secure sports betting, build a theater/venue for special events (Picasso Ballroom doesn't cut it), actually orient the restaurants to the water/gardens, and build a damn swimming pool. I think the standout amenities of Wynn/Encore Las Vegas are hands down their pools, the sports book, and the number of restaurants/dining spaces they have oriented to the outside. I love the Encore Boston Harbor, but TBH they could certainly have done more to leverage their waterfront asset than merely a harbor walk and gardens.

A gazebo cafe along the waterfront that serves breakfast and lunch would be really wonderful here... something like their Terrace Point Cafe, Lakeside, Parasol, or Jardin restaurants in Vegas.
 

Arlington

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I believe it is possible to be both the best possible operator of a Boston Casino and to still underperform forecasts and to make mistakes fine-tuning a monopolist's pricing-vs-market-size model
 

kjdonovan

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It makes me very happy to see a microeconomics comment about the inefficiencies of monopolist markets rather than-- flashback five years ago-- Rifleman ranting about traffic.
 

Czervik.Construction

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As a person who has built businesses from the ground up and been a market maker, the fact that they built something that has never existed before in Boston and appears to be well-executed overall and performing fairly well is a win. There are no historicals or comps to analyze, even with the best financial forecast models, there is still a big element of "build it and see what happens".

I am sure these guys will tweak a few things in a year or so - maybe it is a giant pool where people pop bottles on Sunday Funday, or a sportsbook, who knows. I think they will be fine in the long term.
 

CSTH

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If I'm reading this right, theyre underperforming expectations but not exactly struggling. The thing about a casino is that you have essentially guaranteed profit in the gaming operation. And all the revenue trends cited here are month on month comparisons, not same month year on year (for obvious reasons). If you told me that January was slow season for a resort casino in the northeast, I'd believe you. I'm sure all the other hotels in town, and the entertainment venues, have less revenue in January than in, say, August. And I'm sure most of the European tourists come in August.

Yes I know they have a huge debt load, and that they have to pay royalties to the state lottery. But I think Encore is probably underperforming but not exactly struggling.

MGM in Springfield is probably another story.
 

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