Thu, Jul 18, 6:47pm by Staff Writer
It was a battle to get Encore Boston Harbour open with Wynn Resorts’ founding father and former boss Steve Wynn accused of a decades-long pattern of sexual misconduct.
Several regulatory investigations, a stream of criticism over why the company’s management had not addressed workers’ allegations properly and two hefty fines later – a $20 million one by the Nevada Gaming Control board and a $35 million one by the Massachusetts Gaming Commission – Wynn Resorts hoped that it could turn over a new leaf and grand-open the $2.6 billion luxury resort in the Greater Boston area with no more issues.
Casino News Daily is reporting that while the property opened with plenty of fanfare on June 23 and hailed a successful first week of operation, during which it generated a gaming win of $16.8 million, it now faces accusations of cheating its patrons to reap financial benefits and boost its revenue.
A class-action lawsuit filed earlier this week in the Middlesex Superior Court claims that there are practices deployed at Encore Boston Harbour’s casino floor that rip players off and violate the Massachusetts’ gaming law.
The suit represents A. Richard Schuster, a New Yorker who played at the gaming facility last week.
Schuster said in the lawsuit that he played blackjack and the slots at Encore Boston Harbour’s gaming floor. Of his experience at the casino’s blackjack tables, he said that he should have been paid out at 3-2 odds, but was eventually paid out at 6-5 odds.
In traditional blackjack, a player is paid out at 3-2 odds when they hit blackjack.
Under Massachusetts’ gaming regulations, the state’s two commercial casinos can pay players at 6-5, but only if certain requirements are fulfilled by the properties so that they ensure that the playing field between a patron and the house is levelled.
Schuster argued that at Encore Boston Harbour the 6-5 payout rule was coupled with additional rules that increase the house’s edge against the player. The casino thus had an advantage well beyond what the state permits, Schuster’s lawsuit reads.
Under state gaming regulations, 6-5 payout blackjack games should be played with 1-2 decks instead of 6-8 decks and a player must be dealt two facedown cards that they can look at.
According to the recently filed lawsuit, Encore Boston Harbour was running foul of the rules, using eight decks and dealing face-up cards to players that they are not allowed to touch.
The suit estimates that the practice causes players to lose around $35.60 per hour on $50 bets.
Schuster also pointed out that when playing the slots at the casino floor, the machines paid out in whole dollars, withholding the change.
The casino denied the recent allegations, stating that it follows the Massachusetts Gaming Commission’s rules and the terms of its license from the regulator.
Encore Boston Harbour is the state’s second commercial casino resort. The property’s gaming floor features 3,100 slot machines, 143 table games, and an 88-table poker room.
The casino is expected to generate $800 million in annual gaming revenue, a quarter of which it is set to contribute in gaming taxes to the state’s coffers.
Lawsuit: Encore Boston cheating blackjack players, withholding slot winnings https://t.co/7Y1E1e61cP
— Blackjack Forum (@BlackjackForum) July 15, 2019
The Boston Globe recently reported that during the first 24 hours that Encore Boston Harbour was open there were thousands of people waiting to enter, the nightclub was sold out and there was a wait to bet at the $100-minimum blackjack tables.
At the least, these anecdotes indicate strong demand at the resort early in its existence.
When Wynn Resorts reports earnings, it’ll be important to look at how those crowds translated to revenue in the resorts’ first few days.
Were hotel rooms full, were people gambling, and were restaurants and clubs busy enough to justify the property’s cost.
With a $2.6 billion price tag, the resort needs to generate a lot of revenue to be considered any kind of financial success.
To make a decent return on investment, investors should look for at least $260 million in annualized property EBITDA, a proxy for cash flow at the property.
This would be a 10 per cent EBITDA return on what was invested and is a good benchmark used to assess resorts.
Assuming an EBITDA margin of 30 per cent, that means the resort needs to generate $867 million of revenue per year, or $2.4 million per day.
That’s a big number considering the resort has just 671 hotel rooms, compared with 4,750 at Wynn Las Vegas.
The price of rooms will likely be higher than in Las Vegas and have been going for more than $1,000 per night at times.
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