A Day in Pennsylvania


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The news from the gaming industry has been just like the news from any other industry for the past couple of years; even when customers are going to casinos they are spending less.  Every jurisdiction has experienced declines in revenue for at least part of the time during the current recession.  That is except Pennsylvania; gaming is new in Pennsylvania and still growing and expanding – three more casinos will open sometime, although two of the licenses are still uncertain so the timing is equally uncertain.  In September the first casino in Philadelphia will open and more significantly during the summer the nine operating casinos will add table games.  All of that means better revenues than last year or the year before – well almost.  For the state that is true, but for casinos that were operating a year ago – there were seven – most are seeing the same thing everyone else in gaming is seeing, less revenue this year than last.

The reasons are not much different in Pennsylvania than in other jurisdictions, customers either have less money or are simply less willing to spend what they do have and increased competition is spreading the gaming dollar more thinly around in more casinos. But it can and will get worse as more competition opens in Ohio, New York and other states.  Worse there are still at least two as yet unbuilt casinos that will add to the competition in the state. The really bad news is more threatening to the industry in Pennsylvania, a legislative committee is today discussing allowing slot machines at some 8000 bars around the state.

So today we hear that gaming revenue for state is up 13 percent, but on a same store basis is down 8 percent; the casino in Pittsburgh is getting an additional $100 million in financing to help it compete; several casinos reported double digit declines, one casino had 24 percent less revenue than last year, two licenses are up in the air and a number of new proposals are in the works; and the lawmakers are thinking about adding as many as 40,000 slot machines. I am sure the operators in New Jersey feel no sympathy for those in Pennsylvania and are probably thinking: “Welcome to the real world of casino gambling!” But at least the Flyers beat Chicago last night.

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