Pennsylvania Casino Revenue Up 1.64% in February

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Tuesday, March 20th, 2018 | Written by Charles Washington

Severe cold weather and snow blizzards have battered the northeastern US states over the past couple of months, and Pennsylvania was no exception with its casino revenues down by 1.6% in January. In February, however, Pennsylvania’s gaming market subsequently made a slight recovery with revenues bouncing back by 1.64%, thanks mostly to a strong performance by its table game segment.

Revenues Up 1.64%

Last month, Pennsylvania’s twelve casinos generated total gaming revenues of $262.8 million, up by 1.6% year-over-year, with its 1.67% contraction in slot machine revenue to $189 million counteracted by an impressive 11.24% surge in table game business to $73.7 million.

Slot Machine Decline

Pennsylvania’s slots offering may have been an $11.2 million improvement on the dismal $177.8 million produced in January, but February’s tally was still down by a disappointing 1.67% versus the same month last year. Nevertheless, the decline forms part of an overall larger contraction seen in the vertical, with there having been just four months with year-over-year increases since August 2016, including last November and December.

One of the possible reasons for the segment’s falling popularity is the stifling 54% tax rate placed on slots, which has led operators to set an unattractive 89% return on their machines. Less returns on players’ money has therefore resulted in less wins and thus less frequent play by the casinos slot customers.

Slots Winners

In February, Parx Casino headed the slots list with $32,740,689 in revenues from its 3,400 machines, representing a 6% year-over-year spike. In second place was Sands Bethlehem with $23,873,376, up by $1 million from the previous month, but lower by 6% from last February; while Rivers Casino was next with its 2,900 slot machines collecting $22,598,530 , or roughly $500,000 less than February of 2017.

On the flip side, Nemacolin brought up the rear with $2,256,981 in February, marking a slight improvement versus last month, but a huge 14% revenue drop year-over-year.

Table Games

Unlike Pennsylvania’s slots market, table games have been on a hot streak, and have now returned 10 months of year-on-year growth out of the past 11 months. In fact, table games have even managed to counteract the revenue loss experienced by the state’s slots revenue, and last year helped the state’s casinos achieve an all-time record of $3.227 billion in 2017, beating the previous record set in 2016 of $3.213 billion.

In February, Pennsylvania’s 1,269 table games subsequently produced 11.24% more revenues at $73.7 million compared to $66.3 million taken a year earlier. Furthermore, all but four operators saw their year-on-year revenues grow. Leading the market in terms of revenue was Sands Casino Resort Bethlehem with $19.1 million, up 2.23% y-o-y; followed by Parx Casino up 18.21% ($16m); SugarHouse Casino up 30.75% ($10m), and Rivers Casino up 37.98% ($6m).

Posting table game losses last month, however, was Mount Airy Casino Resort down by a massive 28.53% at $2.7 million; followed by Harrah’s Philadelphia down by 5.86% ($5m); Presque Isle Downs and Casino down by 2.07% ($1.1m); and lastly Mohegan Sun Pocono down by 1.55% ($3.3m).

iGambling in Q4 2018

Last year, Pennsylvania became the fourth US state to pass online gambling legislation, with all signs pointing towards an official launch in the fourth quarter of 2018. In the meantime, the Pennsylvania Gaming Control Board has announced that it would soon start accepting applications for online gambling licenses, with those including all three online gambling categories (poker, table games, slots) costing $10 million, or each individual license costing $4 million.

During the first 120 days of the application process 39 licenses will be made available to state operators, after which any unclaimed license can be claimed by out of state gaming entities. This has then led to a flurry of acquisitions, with Churchill Downs purchasing Presque Isle Downs, Boyd Gaming buying Valley Forge Casino Resort, and Penn National Gaming acquiring Meadows Racetrack & Casino.

Sheldon Adelson is one of the country’s staunchest opponent of online gambling, and over the years has funded lobbying groups such as the Coalition to Stop Internet Gambling (CSIG), and supported pieces of legislation, including the Restoration of America’s Wire Act (RAWA). Following the news of Pennsylvania’s adoption of an online gambling bill, Adelson has since sold his sole Pennsylvania property, Sands Bethlehem, to Wind Creek Hospitality for $1.3 billion.

Forecast To Be Bigger Than NJ

According to estimates, Pennsylvania’s online gambling market is likely to be bigger than that of neighboring New Jersey, which in 2016 generated $196.6 million in revenues, helping to reverse a decade of decline experienced by Atlantic City casino industry. In 2017, the industry then expanded even further, posting new all time high $245.6 million, and this year both January and February have produced record breaking months of $21.96 million and $21.99 million respectively.