CASINO

Pennsylvania slot revenue decline good for online gambling push?

TAGs: Pennsylvania

pennsylvania-slots-revenue-fallsPennsylvania casinos earned less revenue from their slot machines in the state’s most recent fiscal year, breaking a two-year streak of revenue gains.

Figures released Thursday by the Pennsylvania Gaming Control Board (PGCB) show that the state’s 12 casino licensees generated combined slots revenue of $2.33b in the 12 months ending June 30. That’s down 2.2% from the $2.39b the state’s slots generated in fiscal 2015-16.

While the PGCB crowed about this year’s figure being the seventh straight year that slots have generated over $2.3b, it’s still well below the $2.5b peak the state recorded in 2011-12. Annual figures for the state’s table game operations will be released later this month.

Only three of the 12 casinos reported year-on-year slots revenue gains in 2016-17, and none of these gains exceeded 4%. The state’s perennial slots champ, the Parx Casino in Philadelphia, saw its slots revenue fall 0.45% to $386.6m while runner-up Sands Bethlehem was down 0.39% to $304.1m.

Overall, the casinos reported slots revenue declines in 10 of the 12 months in fiscal 2016-17, including June 2017, during which revenue fell 0.77% to $188.5m. The average number of slots in action at the end of June was down by nearly 1k to 25,685.

Despite the declines, the state government continues to make out like bandits, thanks to its nation-high 54% tax on slots revenue. The state’s share of the most recent fiscal year’s slots take was $1.23b, down $40m from the previous year. Since the state authorized slots in fiscal 2006-07, the government has claimed $12.1b of the total $22.4b the machines have generated for their operators.

SLOTS DECLINE GOOD FOR ONLINE GAMBLING PUSH?
The timing of the slots announcement could play into Pennsylvania’s ongoing efforts to use new gaming revenue to help fund the state’s annual spending plan. The House and Senate have approved separate and very different gambling expansion blueprints, and the casinos’ favorite boogieman – tens of thousands of new video gaming terminals (VGTs) in bars, pubs and clubs – has won the support of House legislators. The fear is that resistance in the Senate to approving VGTs could also derail plans to authorize online gambling, as the VGT issue did last year.

On Wednesday, Senate President Joe Scarnati told local media that negotiators were close to a compromise deal on gambling expansion, and while he didn’t offer specifics, he appeared to indicate that VGTs wouldn’t make the final cut. Legislators have extended their normal session until July 10 to continue working on reaching budget consensus. Watch this space.

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