Twin River official: Multiple revenues will keep Lincoln casino strong

Twin River official: Multiple revenues will keep Lincoln casino strong

LINCOLN - Details about the Mississippi casino and hotel acquisition by the company that owns Twin River Casino were among topics covered last Thursday during a presentation given to members of the Northern Rhode Island Chamber of Commerce.

John E. Taylor Jr., chairman of the board at Twin River, said the strategy for Twin River, and its parent company UTGR Inc., has been to diversify revenues to keep business strong as Connecticut casinos continue to provide competition and Massachusetts casinos inch nearer toward opening day.

Just as 80 new table games helped balance revenues from where they were at 91-92 percent from video lottery terminals and the rest from food and beverage sales, purchasing the Hard Rock Hotel & Casino in Biloxi, Miss., for $250 million avoids "100 percent reliance on Twin River," Taylor said.

Diversifying revenue streams also lowers cost of debt and improves purchasing power and leverage across the business, he explained, pulling Twin River up from being one of the lowest leveraged casinos in the country.

"We're building a Rhode Island-based multi-jurisdiction casino company," Taylor said, with the new casino making up one-third of revenue while two-thirds will come from the flagship Lincoln location, which will continue to be run by the same managers and officials.

Mississippi provides a "stable market," Taylor said, with a "very competitive" tax rate of 12 percent, compared to Rhode Island's rate of 58-59 percent.

Located on the Gulf of Mexico and near Mobile, Ala., the Mississippi casino includes 1,342 slot machines, 51 table games and four poker tables on 53,800 square feet of gaming space.

The property has a 12-story hotel with 325 rooms and five restaurants. A new tower opening in Feb. 2014 will add 154 rooms, Taylor said, and land has been acquired for future development.

The purchase is targeted to close by June 2014, he said, and the new facility will "probably" be paid off by the time destination casinos go live in Massachusetts.

Combined services between the Hard Rock and Twin River include 5,880 video lottery terminals, 131 table games, four poker tables and 479 hotel rooms. Taylor stressed that it is against state law to build a hotel on the Twin River property, so the company has no plans to do so.

Potentially bringing the Hard Rock brand to Lincoln is something that has yet to be discussed, he said.

Twin River contributed $290 million to Rhode Island in Fiscal Year 2013, and $11.2 million to Lincoln, Taylor said. Meanwhile, he said, charitable giving has remained consistent at $2.5 million annually.

The number of employees has also increased, he said, from 890 on staff before the table game referendum passed to 1,515 today, with another 100 open positions still to fill. Taylor reminded those in attendance the casino had planned to add 350 jobs with table games and ended up employing more than 700 new people.

Food and beverage numbers have jumped 30 percent since the table game expansion, he added.

This all helps as Twin River begins to face competition in Massachusetts, Taylor said, explaining that plans include an MGM in Springfield; either a Wynn or Mohegan Sun/Suffolk Downs in Revere; and a slot parlor in either Plainville, Raynham or Leominster. The earliest potential opening date seems to be in 2016 or 2017, he said.

In terms of location, Taylor said, a slot parlor in Plainville "would have a more significant impact to our business," but the facility would have a "limited product offering" with 1,250 slot machines to Twin River's 4,583.

"Based on what we have become, we think we can compete," he said, adding that several of these plans face legal challenges in licensing and residents opposing casinos altogether.

But to prepare, Taylor said Twin River has added the table games, paid down debt aggressively since Nov. 2010, and focused on customer service to the point that Twin River's scores are among the highest in the industry.

"We know our customers are going to try new casinos," Taylor said, but after years of "intense employee training," the plan is for players to return where they receive the best service.

Taylor said the casino, which books what he called "nostalgia acts," may start looking into booking entertainment geared toward a younger, male-oriented audience.