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Slots Revenue Slips Again in April in Pennsylvania

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April was another “off” month for slot machine revenue in Pennsylvania.  Revenue from slots play at the state’s 11 casinos was down 4% compared to the same month last year.

The only bright spot in the April report was the Valley Forge Resort Casino, which posted a nearly 34% increase. Its first full month of operation was in April of 2012.

Doug Harbach of the Pennsylvania Gaming Control Board says the state is seeing the impact of additional competition from Ohio and Maryland.  But he adds that Pennsylvania still has room for expansion.  Lady Luck at Nemacolin, a resort casino, is scheduled to open this summer

Pennsylvania is second only to Nevada in total gaming revenues.

Harbach says Presque Isle Downs and Casino in Erie has been feeling the pressure from Cleveland, Ohio and posted another double-digit decline.   Slots play at Presque Isle was off by nearly 16% compared to April of last year.

Harbach adds that despite the decline in revenue,  the board’s primary responsibility is to regulate the industry.

Casinos, Cards

Taking Bets on the Future of the Foxwoods Casino License…

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Even after this week’s House vote the fate of Pennsylvania’s only revoked casino license is still up in the air.  HB 65 would remove the restrictions that tie the license to Philadelphia and open it up to a statewide auction.  “By doing this the state stands to increase its revenue,” says State Rep. Curt Schroder (R-Chester), the bill’s prime sponsor and chairman of the Gaming Oversight Committee.  His bill passed with a bipartisan vote of 140 – 48. 

But it’s no sure bet in the Senate.  A spokesman says the Republican leader is among those wondering if the gaming market is already saturated and whether the license should be eliminated altogether. 

The state Treasurer released a study last year, which indicated market maturation and even saturation on the opposite ends of the state.  He suggested that central PA may be the place to maximize revenues. 

Governor Tom Corbett notes that plans have always called for the license to be awarded.  “I always think that we need to look at property tax relief,” Corbett says.  He acknowledges there have been discussions about the license within the administration, but did not offer many details while speaking with the media this week.  

Pennsylvania is home to 11-operating casinos, where slot machines raked in more than $214-million in gross revenue last month.  That translates into $116-million worth of tax revenue, according to the Gaming Control Board.  The lion’s share of slot machine tax revenue is used for property tax relief.  Table games tax revenue currently ends up in the General Fund. 

The Gaming Board rolled the dice on the Foxwoods casino project in 2006.  After four years of delays and financing woes, the license was revoked in late 2010.  It’s been in limbo ever since.

PA Gaming

Table Games Revenue Increases in January at Pennsylvania Casinos

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Table games revenue rose in January.  Numbers were up for seven of the state’s 10 operating casinos, with an increase of 22.3% over the revenue for the same month last year.

Richard McGarvey, spokesman for the Pennsylvania Gaming Control Board, says play at table games generated tax revenue of more than 8.6 million dollars for January.

McGarvey says casinos are still adding tables, with about 121 more table game in operation compared to the same time last year.  He says that’s an indication they’re still growing and learning their market.

The state’s newest casino, a resort casino at Valley Forge, will go on line in late March with both slots and table games.

Play at table games does not seem to be cutting into slots play at the casinos.  Numbers that came out earlier this month showed a 7% increase in slots revenue over last January.

Five Years of Casino Gaming in PA

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The slot machines first started chiming, whizzing and whirling at Mohegan Sun at Pocono Downs on November 14th, 2006.  Back then it was Pennsylvania’s first slots casino.  Today Mohegan Sun is one of ten casinos operating in the Keystone State, which are all offering a full complement of table games too. 

Casinos, Cards

PA casinos started rolling out table games in July 2010.

The first five years of casino gambling have been an economic success, according to state Sen. Tommy Tomlinson (R-Bucks).  “Many of my detractors said you’ll never raise a billion dollars out of this, but we’ve gone over $4-billion dollars in tax revenues to the state,” Tomlinson says.  Slot machines have actually raked in $4.6-billion dollars in tax revenue through last fiscal year, and table games added another $81.4-million dollars in tax revenue during their first year. 

Regardless of the statistics, state Rep. Curt Schroder (R-Chester) tells us casino gambling has failed to deliver on its promise of property tax relief.  “Maybe a couple hundred dollars in some places, in some parts of the state much less than that,” says Schroder, who chairs the House Gaming Oversight Committee.  “When you’re talking property tax bills of three, four, five thousand dollar and above in some areas, it doesn’t make a dent.” 

Last year, Pennsylvania homeowners shared in $776-million dollars of slots-funded property tax relief, which broke down to a statewide average of $200 bucks.  The amount varies by school district, though, and Sen. Tomlinson tells us poorer areas and senior citizens are especially benefitting.      

PA casinos employ 15,000 people, but there are concerns about potentially thousands of families being negatively impacted.  Five years ago, the Council on Compulsive Gambling in Pennsylvania averaged around 300 calls per month to its helpline.  “Since the first casino opened in November of 2006, our monthly helpline activity has increased,” says Council on Compulsive Gambling President Jim Pappas.  “We now average over 1,800 calls a month from within the state.”  3,025 people have also signed up for the Pennsylvania Gaming Control Board’s self-exclusion list.

Several more casinos could potentially come online in 2012, but the Gaming Board’s focus is shifting.  “It really is coming to the point where we’re becoming more of a regulator than an opening-type agency,” says PGCB spokesman Richard McGarvey.  While the gaming competition from surrounding states will be intense in the next five years, McGarvey says PA casinos are already responding with increased amenities.  “You’re now starting to see these casinos starting to add hotels, shopping centers, bowling alleys… That’s the direction they’re heading.”

Casinos Impact More than PA Economy

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Since Pennsylvania’s first casino opened its doors in Nov. 2006, the tax revenue from slot machines has topped $4.6-billion.  Today, Pennsylvania’s ten operating casinos employ more than 15,000 people.  Most will attest to the economic success of the industry in the Keystone State. 

However, casino gambling has also taken a toll on some Pennsylvania families.  The evidence can be found at the Council on Compulsive Gambling of Pennsylvania call center.  “Prior to 2006, our helpline calls averaged around 300 calls per month,” says president and executive director Jim Pappas.  “Since the first casino opened… our monthly helpline activity has increased to the point we now average over 1,800 calls per month from within the state.” 

Pappas says the helpline activity comes predominantly from areas surrounding Pennsylvania’s casinos. “Years ago we didn’t get a lot of calls from northwestern PA, from Erie County, now we do,” Pappas explains.  “Because there is a casino opened, and racetrack, in Erie, Pennsylvania.” 

Of the 1,800 calls they receive per month, Pappas says 150 – 200 are from gamblers – or their significant others – in crisis.  Between 80 – 130 of them are referred to trained therapists to treat the issue, and Pappas says all of the callers are at least given the information of a Gamblers Anonymous support group in their area.    

The council’s call center answers four different gambler helpline numbers, but Pappas says the easiest to remember is 1-800-GAMBLER.  The state Department of Health has also launched a problem gambling website where you can assess your own risk of problem gambling.

PA Treasurer Analyzes Gaming Markets

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Ten casinos are already operating in the Keystone State.  Two resort casinos are pending, and two casino licenses are currently unallocated.  One of those remaining two licenses was originally awarded to Foxwoods project in Philadelphia, and eventually revoked by the Gaming Control Board.  The other is earmarked for a yet-to-be-built racetrack in Lawrence County. 

Both licenses are subject to possible legislative intervention and relocation, and a key Senate committee got the first look at Treasurer Rob McCord’s analysis of alternative locations at a hearing this week.  “When you take a look at eastern Pennsylvania, supply and demand seem to be meeting each other… when you move to western Pennsylvania you move from maturation to potential saturation,” explained McCord, who by way of his office is a non-voting member of the Gaming Board and legal custodian of gaming funds.

McCord commissioned a study with the Innovation Group, and found that the numbers drive regulators and policymakers to look at central Pennsylvania.  Ranking alternative casino locations based on the net gain to PA gaming revenues, South York tops the list with a $154-million dollar impact.  “This is a net revenue number.  So you might see in Philadelphia the highest gross number but then you have to ask yourself, how much of that is cannibalization of Pennsylvania facilities?   You really don’t care if you’re cannibalizing out-of-state facilities,” McCord says.  Reading, PA came in at number two among the ranked alternatives. 

Rob McCord Gaming Presentation

McCord's presentation focused on the net gain for Pennsylvanians.

State Senator Jane Earll (R-Erie) who chairs the Senate Community, Economic and Recreational Development Committee recognizes there is some legislative interest in moving either of the aforementioned licenses.  “I think to have concrete information about what the potential impacts on our incumbent investments might be is helpful,” Earll said after the hearing.  McCord made no recommendations, rather calling the study a tool for analysis. 

The study also found that a potential casino in Youngstown, Ohio would have a significant impact on future profits from the would-be Valley View casino in Lawrence County.  The Ohio project would have a near 33% impact, dropping net revenues from $122-million to $83-million under that scenario.

PA Gaming

Report Provides New Table Games Data

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August 2010 was the first full month for table games at Pennsylvania casinos, so the August 2011 revenue report includes the first year-to-year glimpse at table games revenue in the Keystone State.  For instance, the nine casinos operating in August 2010 raked in $34.6-million in gross revenue.  Those same nine casinos collected $48.6-million in gross revenue last month, according to the Pennsylvania Gaming Control Board’s figures. 

Philadelphia’s SugarHouse Casino opened up in September 2010, so year-over-year numbers aren’t yet available for it. 

Much of the increase in revenues can be attributed to the growth of table games on the casino floor.  There were 636 tables operating at nine casinos in August 2010.  Those same nine casinos were operating 871 tables last month. 

Parx Casino in Bensalem has the most table games operating (172).  Sands Casino Resort in Bethlehem had the most gross table games revenue last month ($10.8-million).  July 2011 still stands as the biggest gross revenue month for table games, with $56.2-million collected across all ten casinos.  That number was $54.7-million last month. 

Pennsylvania’s table games law taxes gross revenue at a rate of 16%.  14% is funneled into the state’s General Fund.  2% is tacked on as a local share.

Gaming Board, Parx Discuss ‘Kids in Cars’ Problem

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Nine incidents were reported last year; three more have already been documented in 2011.  At issue are adults who go inside Parx Casino to gamble, while leaving children unattended in the parking lot.  Appearing before the Pennsylvania Gaming Control Board, Tuesday, Parx officials said all offenders are subject to arrest by Bensalem Police.  “Anyone who has left children unattended are permanently evicted by us… and that permanent eviction then makes them subject to criminal trespass if they are to appear again at our property,” added Parx General Counsel Thomas Bonner.  Offenders also have their players club accounts canceled and are removed from any marketing lists. 

Those are just the patron sanctions.  Bonner went on to explain how the casino has ramped up enforcement.  “Before these incidents began to occur with greater frequency last year, we had about 16-cameras in our parking lots.  We’ve just about doubled that number to 29-cameras in our parking lot areas,” Bonner says.  Parx has also installed signage at the casino doors, warning patrons of the problem and penalties, and increased the number of security vehicles conducting roving parking lot patrols.  “The last several incidents that we’ve had, response times were 6-minutes, 17-minutes, 15-minutes.  They were very short response times,” Bonner says.

Greg Fajt

Greg Fajt

Members of the Gaming Control Board appeared pleased with the response times, but concerned with how to prevent such actions and the penalties for them.  “This segment of the population just doesn’t appear to get it, and these folks need to be given a message,” says Gaming Board chairman Greg Fajt.  The board took no enforcement action, but some members suggested that lawmakers could help them create tougher penalties.