A teaser and note to myself – the money exchange

Mercantile Exchange
Drinks, sandwiches,  snacks and gambling dollars from neighboring states exchanged here.

Looking at the gaming revenue numbers in Pennsylvania and Atlantic City, it occurs to me that there is nearly an even exchange.  For every dollar in revenue generated by slot machines in Pennsylvania a dollar of slot revenue is lost in Atlantic City and now we have a new category to watch, the table games.  There are two sets of statistics we could monitor in this case; Pennsylvania opened table games with 626 games, Atlantic City had 1600 – my prediction would be a reduction in Atlantic City over time to somewhere in the neighborhood of a thousand games and Pennsylvania increases to to about the same number – at this time next year Atlantic City may or may not have 11 casinos – Pennsylvania will have 10 when the next one opens in Philadelphia in September. This is a revenue exchange theory, but it will necessarily impact the number of table games and casinos in Atlantic City over time – not a direct one to one ratio, but certainly some number of new games in Pennsylvania will force some reduction in the number of games in Atlantic City; equally, it is not likely that Atlantic City will continue to have 11 – once on its way to 15 casinos, today it seems on its way to fewer than 10.

The second set of numbers is of course the games’ revenue; Pennsylvania’s table games won about $1500 a day each in the first two weeks; Atlantic City’s table games generated $2200 a day in July, but it was down 4.5 percent from the previous year. Once we have tracked the exchange for a year or so – and we should go back and develop some data on slot machine revenue for the past couple of years in both jurisdictions – we can develop a model for predicting the impact of casinos in Ohio on say Indiana, or western Pennsylvania.  And then sometime in the future publish a long and boring academic paper on the revenue exchanges between gambling states in the first two decades of the 21st century. Not terribly exciting and worse by then it will simply be ancient history and I will be working on trying to figure out the nature of the impact of online gambling on Indian casinos in Idaho or something.


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August 2010
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