What is in a name, or a number for that matter?


What’s in a name? That which we call a rose,By any other name would smell as sweet.”

William Shakespeare, Romeo and Juliet, 1597

As Willy so famously said, it is the thing that matters, not what we call it.  But when it comes to thing itself there is often some room for debate, especially when we describe the thing with numbers.  Our world is one bound and valued by economic activity and for convenience sake, we us numbers to describe economic activity and measure the health of all things economic. However, a number is just number; it is only an abstraction of events.   Those numbers, those measurements standing alone mean very little; but when compared against other numbers they can reveal a story – an industry narrative.

Here are two sets of numbers, one from Pennsylvania and one from a Special Administrative Region of the People’s Republic of China – Macau.  The numbers were released by the agencies responsible for overseeing gaming activity, they are released at the beginning of each new month.  The numbers are gross gaming revenues, the measurements used to indicate gaming activity.  Traditionally, such reports give the revenues and a comparison to the same period in the previous year.  The percentage of increase or decrease is used as a measure of the health of the industry at that point in time– because like all financial reporting, it is just a snapshot of a specific period of time.

The numbers: Macau reported gaming revenue of $3.9 billion for the month of March; that was a 25% improvement over March of 2012 – 3.9 billion annualized would give Macau $46.8 billion a year in gaming revenue.  Pennsylvania reported $229.3 million in slot revenue for March, a decline of 1.6 percent; Pennsylvania does not report its table game revenue until the last week of the month, but typically it is approximately 30 percent of the slot revenue and that means the total gaming revenue from Pennsylvania will be in the neighborhood of $300 million.  Annualized Pennsylvania would generate $3.6 billion in 2013, more than any other state’s casino revenues, except Nevada, but less than one month in Macau.

The narrative for Macau and Pennsylvania are not alike.  Macau is marching toward another record year distancing itself by a factor of 4 from any other casino jurisdiction in the world, Pennsylvania is headed in another direction.  The narrative in Pennsylvania is in the midst of changing.  Slot revenues in March were the second highest ever; that is the good news.  The one month that slot revenues were higher than March 2013 was in March 2012; slot revenues in Pennsylvania were down 1.6 percent in March and that is the bad news; there is one more casino open now than last year, so revenues actually declined 3.9 percent on a same-store basis and that is the really bad news.  For six years, gaming revenues in Pennsylvania increased, but beginning in 2012, Pennsylvania encountered the same nightmare it had created for Atlantic City – a competitor that nibbles away at its player base.  Now, Pennsylvania is going down into that spiral of decline into which it pushed Atlantic City.  So while, Pennsylvania posted a near record month, the underlying narrative is one of decline.  The state will continue to benefit from gaming revenues, but the individual properties will struggle; and there is still one more casino to be built in Philadelphia and of course more competition coming from neighboring states.

The Macau narrative is much simpler and straightforward, at least for the moment; another record year is on its way.  Analysts are predicting 6 months out of 12 in 2013 will be record months – not all time records as March was, but records for that particular month.  In time, Macau too will have competition, it will have reached its maximum potential to draw play from China and it may run into serious regulatory limitations from Mainland China.  But before all of that happens, the underlying narrative from Macau is the dumbfounding impact of having 1.6 billion customers at your doorstep.

Trailing only the amount of revenue generated last March, slot machine revenue in March of this year at Pennsylvania’s casinos tallied the second highest monthly amount since the opening of casinos in 2006. The overall combined revenue figure for the 11 Commonwealth casinos was $229,335,372, 1.6% lower than March of 2012 when casinos produced the highest amount of slot machine revenue, $233,147,479…In a comparison of just the ten casinos operating in March 2013 that were also open for the full month of March 2012, revenue was 3.9% lower this year.  PRNewswire, 4-4-13

Macau’s gaming industry has posted a new all-time record in March. The city’s casinos took in $3.9 billion in gross gaming revenue last month, up by 25.4 percent over the same period last year… this year, accumulated gross gaming revenue increased 14.8 percent increase over the first three months of 2013. Macau Business, 4-4-13

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