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Equine Coalition Concerned About Drop in Slots Revenue at Racetrack Casinos

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Slot machine revenue at Pennsylvania’s casinos in March tallied the second highest monthly total since gaming began in the state, exceeding July of 2011. But a year to year comparison is thornier, because the highest month ever was March of last year. This year, slots were down 1.6%, with only Rivers Casino posting an increase.

Slots revenues at the state’s six racetrack casinos fell by more than 5 % last month according to the Pennsylvania Equine Coalition and that continues a downward trend that started last year. The coalition believes competition from neighboring states is playing a role.

Spokesman Pete Peterson says they believe Governor Corbett’s budget estimates for the Race Horse Development Fund are overly optimistic. He says they’re projecting less revenue for the fund, at the same time the Governor’s budget proposes using some of it for other budget needs next year.

Peterson says they’d also like to see the casinos put more effort into marketing the horse racing industry.

 

Slots Revenue Increases in Pennsylvania for a Sixth Straight Year

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Slot machine revenue rose in Pennsylvania last year for a sixth consecutive year.   There was a 2.7% increase in gross revenue from slot machine gaming in 2012. The numbers were boosted in part by the opening of the Valley Forge Resort Casino.   Six of the existing casinos posted increases for the year, while four saw declines in slots play.

SugarHouse Casino in Philadelphia posted the biggest gain, increasing slots play by more than 11% over the previous year. Presque Isle Downs and Casino saw the biggest decline at more than 9%.

Doug Harbach, a spokesman for the Pennsylvania Gaming Control Board says fluctuations are expected, especially as gaming expands in neighboring states.    Gaming is expanding in Ohio and Maryland. But Pennsylvania’s newest resort casino is expected to open later this year in Fayette County.

Tax revenue generated by the play of slots topped 1.3 billion dollars last year. Pennsylvania’s first casino opened in November of 2006.

The Board also posted monthly slot machine revenue for December. There was a decrease of 2% for the month compared to December of 2011.

The casino industry in Pennsylvania employs more than 16 thousand people, while providing funds for property tax relief, the horse racing industry, economic development and community-based projects.

Numbers for table games won’t be out until later this month.

Slot Machine Revenue Down, Superstorm a Factor

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Slot machine gross revenue for the month of October was more than $188-million dollars across the state’s 11 casinos.  That’s down 4.4% when compared to October 2011 figures.  When comparing just those ten casinos operating year-to-year, the drop becomes even sharper; 6.5%. 

The Pennsylvania Gaming Control Board (PGCB) cites both the severe weather that marked the final week of the month and the fact that October 2012 had just four Saturdays, compared to five of the prime gambling days in October of last year.

Sands Casino Resort in Bethlehem was the only casino to post gains in October (2.55%).  Presque Isle in Erie saw the sharpest declines (-21.89%). 

The state’s 11th casino, the Valley Forge Casino Resort, opened in March of 2012.

Agriculture Budget Hearing Dissects Fund Transfer

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$72-million may not seem like much in relation to a $27.1-billion dollar budget.  But plans to transfer $72-million out of the Race Horse Development Fund dominated the discussion when Agriculture Secretary George Greig appeared before the House Appropriations Committee on Tuesday. 

The Race Horse Development Fund receives 12% of gross slot machine revenues.  That money is in turn used to bolster purses and otherwise support the horse racing industry.   The governor’s budget plan would transfer $72-million from that fund to help pay for agricultural research at Penn State, the University of Pennsylvania’s veterinary center and payments to Pennsylvania fairs. 

“The funding that it’s headed toward, I think, is very relative to racing,” Secretary Greig told the House budget panel.  “I think it’s ag helping ag.” 

While some lawmakers wondered if it was actually ‘ag hurting ag,’ State Rep. David Millard (R-Columbia) pointed out that the fund takes in more than $5-million a week.  He thinks the horse racing industry will still flourish, even if these dollars are diverted into other agricultural programs. 

But the Pennsylvania Equine Coalition fears the transfer would pull the rug out from under the industry.  “People invested millions and millions of dollars in Pennsylvania with the expectation that they’d be able to compete for certain sized purses to recoup their investment and have the chance of making their money back,” spokesman Pete Peterson told Radio PA. 

In addition to the newly proposed transfer for agricultural programs, millions of dollars are already being diverted from the Race Horse Development into the General Fund.  Act 1 of 2010 provided for the annual transfers through fiscal year 2013.

Monthly Slots Revenue Hits New High in Pennsylvania

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July was the best month so far for slots revenues in Pennsylvania.  The state’s newest casino gets much of the credit. If you take away the Sugar House Casino, which opened in September 2010, slots revenues for the 9 other casinos in Pennsylvania were actually down 3.5% last month.  With the Philadelphia casino added, July slot machine revenue was the single highest month to date, up almost 3.5% over last July.

Pennsylvania Gaming Control Board spokesman Doug Harbach says the Sugar House Casino continues to improve its numbers since coming on line last year, and that has boosted numbers across the state.  July’s total slots revenue was over $218 million, which translates to over $118 million in tax revenue.

Six of the other nine casinos were down compared to July 2010, and only three reported increases in slots revenue for the month.  Harrah’s Chester Casino and Parx Casino, those closest to the new Sugar House Casino, saw the biggest declines in revenue from slots compared to last July. Harrah’s was down 16.2%   and Parx was off 9.2% from the previous July.  Harbach says some impact was expected as the market continued to mature.

Meanwhile, Harbach says they’re not seeing much, if any impact from the two casinos that have opened in Maryland.  He says that market is still growing. One casino is in a county bordering Pennsylvania, Cecil County.  The other is near the Ocean City resort area.

Harbach says revenues are not the only thing going up at Pennsylvania’s casinos.  He says they’ve seen an uptick in the number of jobs at the casinos with the continued growth of revenue.

Table games revenue figures are released separately.