Massachusetts's underperforming casinos may yet reverse their fortunes and produce the tax windfall their operators forecast, but Gov. Charlie Baker isn't betting on it.
Baker's budget proposal for fiscal year 2021, unveiled Wednesday, anticipates $282.7 million in gaming tax revenue, according to the Executive Office for Administration and Finance. That's down roughly 4% from the $294 million Baker and state lawmakers expected casinos to generate in the current fiscal year.
"It's pretty realistic," said Richard McGowan, a finance professor at Boston College who studies gambling. "In fact, it still might be a little high, to be quite honest."
Massachusetts fiscal years run from July to June, straddling calendar years.
Were the state's casinos hitting their own revenue targets, they could have generated about $400 million in taxes. Beacon Hill appeared to make a conservative estimate when budgeting for $294 million in fiscal 2020.
Yet even that seemingly low bar may prove too high. At the end of December, the midpoint of the fiscal year, Encore Boston Harbor, MGM Springfield and Plainridge Park Casino had generated $138.3 million in gaming taxes. That modest haul puts the state on pace to collect $276.6 million.
With the state's casinos off to sluggish starts since their openings, Baker's new budget lowers expectations.