Slots revenue sparks envy
HARRISBURG — After one year of slot-machine gambling in Pennsylvania, casino revenues are considered strong and are generating plenty of cross-border envy.
The slots revenues, which have exceeded daily per-machine averages elsewhere in the Northeast, are particularly impressive considering that most of Pennsylvania's casinos are in temporary facilities or new establishments that are still being expanded, one analyst said.
"I'd say they've done this without breaking much of a sweat," said Joseph Weinert, editor of the Atlantic City, N.J.-based Gaming Industry Observer.
Mohegan Sun at Pocono Downs debuted Nov. 14, 2006, the first of six slots parlors now open in Pennsylvania. Through Monday, gamblers at the six facilities wagered more than $10.6 billion — or $880 for every man, woman and child in Pennsylvania.
About $913 million was lost by gamblers and was split between the casinos and the state, which then routes the money into tax cuts, civic development projects, local government aid and the horse racing industry.
The draw of Pennsylvania's slots is being felt in other states.
Gross revenues at the 11 casinos in Atlantic City, N.J., are almost 2 percent behind last year at this time. Horse racing advocates from Massachusetts to Maryland point to the newly swollen purses at Pennsylvania's tracks as a reason their states should follow suit.
"Most of the farms in Maryland that had substantial boarding populations ... have lost quite a bit of business," said Cricket Goodall, the executive director of the Maryland Horse Breeders Association. "In some cases, farms have actually relocated."
New competition, however, is coming.
Maryland legislators could give final approval to a bill this week for a November 2008 referendum on legalizing slot machines. In March, West Virginia legalized table games in an effort to protect slots revenues at its racetracks. And New York Gov. Eliot Spitzer agreed to let the Mohawk Indian tribe build a casino in the Catskill Mountains — 20 miles from the Pennsylvania border.
Calls are already being heard in Pennsylvania to legalize table games.
Bobby Soper, the chief executive of Mohegan Sun at Pocono Downs, said he believes the facility near Wilkes-Barre can be successful, despite state's relatively high 55 percent base tax rate and increasing competition.
It's difficult to predict how much money the state's slots parlors will bring in over the next 12 months.
Current gross revenues of about $25 million per week translates to $1.3 billion annually. However, Weinert cautioned that such a projection is shaky because of numerous factors, such as the weather and November's historically low casino patronage.
