CASINO

Will Pennsylvania’s first annual casino revenue decline aid online gambling push?

TAGs: Pennsylvania, Sands Bethlehem

pennsylvania-casino-revenue-fallsRevenue at Pennsylvania’s dozen casinos took a hit in 2013, the first time the annual revenue tally has declined since the state’s first racetrack casino opened in 2006. Table game revenue rose 6.2% to $730m, but a 3.5% decline in slots revenue dragged overall revenue down 1.4% to $3.1b. That’s still the third straight year Pennsylvania’s annual figure has topped $3b and still more than neighboring Atlantic City, which saw annual revenue decline for the seventh straight year to its lowest total in over two decades.

Las Vegas Sands’ market leading Sands Bethlehem saw its table game revenue jump 20% to $175m, nearly a quarter of the statewide total. Greenwood Gaming’s Parx played bridesmaid with $119m, up $10m over 2012. Sugarhouse, Harrah’s Philadelphia and Rivers Casino were next with $85m, $77m and $68m respectively. The next closest pack includes the Mohegan Sun ($44m), Mount Airy ($40m), Hollywood ($36m), Meadows ($35m) and Valley Forge ($33m). Struggling Presque Isle Downs saw its table games drop by over a quarter to $13.5m, while the Lady Luck earned $2.4m since it opened in July.

Considering that Pennsylvania’s annual casino revenue total was a mere $31.6m in its first year, a 100-fold increase in just seven years is pretty impressive. Not so coincidentally, 2006 was Atlantic City’s peak revenue year and things have spiraled downward ever since, culminating in the December decision by two AC operators to buy the Atlantic Club Casino Hotel for the express purpose of nailing its doors shut.

Pennsylvania state gaming officials have cited new regional competition from the likes of Maryland and Ohio as at least partly responsible for Pennsylvania’s 2013 shrinkage. More competition is coming a few years down the road via the opening of as many as seven non-tribal casinos in New York, leaving Pennsylvania virtually surrounded by major casino states.

FALLING REVENUE = ONLINE GAMBLING?
Only history will tell whether 2013 was a blip or the beginning of the end. While nobody’s pushing the panic button just yet, this wakeup call could help nudge Pennsylvania into following its neighbor New Jersey into the online gambling club. Earlier this month, Spectrum Gaming Group founder Fred Gushin said the state “ultimately can’t afford not to” at least consider opening up its online market. The state senate has commissioned a study to gauge intrastate online gambling’s pros and cons; its recommendations are due May 1.

State Rep. Tina Davis proposed an online gambling bill early in 2013 that went nowhere but House Gaming Committee exec director Bill Thomas said Davis’ bill could serve as a blueprint for future bills. Standing athwart history yelling ‘stop’ is state Sen. Mike Stack, who has promised to introduce anti-online gambling legislation in 2014 in a bid to prevent “market cannibalization” (despite Boyd Gaming’s president saying online gambling is boosting poker revenue at his market-leading Borgata brick-and-mortar casino in Atlantic City). And then there’s the owner of the state’s top casino, one Sheldon Adelson, whose minions have relayed Sheldon’s disappointment at having to explain to Pennsylvania that he views online gambling as a cancer and his wallet as the cure. Pass the popcorn.

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