Pennsylvania Casinos Down 1.5% to $281m in April

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Tuesday, May 22nd, 2018 | Written by Stephen Smith

In April, Pennsylvania saw the size of its casino market fall by 1.5% to $280.9 million compared to the same month in 2017, with a slight increase in the state’s slot machine offering counteracted by a brutal month for its table games.

The lackluster numbers follows a record breaking March in which Pennsylvania’s 12 land based casinos generated more than $300 million for the first time in the industry’s more than 14-year history.

Slots Up 0.23%

Last month, Pennsylvania’s slot machine market collected $206.1 million in revenue, representing a +0.23% year-over-year gain. As a result, the state seems to have firmly shaken off its year long slump that lasted from October 2016 to August 2017 and came to an end with a +1.69% rise in September 2017, with slots revenues now higher in five of the past eight months.

Table Games Down 6.19%

In the meantime, Pennsylvania’s table game market saw its business slide by 6.19% to $74.6 million last month, which is somewhat surprising considering how well the segment has performed over the past year. One of the casinos suffering more than most is Sand’s Casino Resort Bethlehem, which saw its table revenue plummet by 19.76% to $17.6 million in April, with its bottom line having been severely impacted by the opening of the $1.2 billion Resorts World Catskills just 81 miles away in New York State in February.

The Resorts World Catskills has devoted around one-third of its casino floor to table games and slot machines, and commenting upon how its opening has impacted Sand’s Bethlehem, Joseph Weinert, executive VP of Spectrum Gaming Group, explained:

“Resorts World Catskills has not only built a nearly $1 billion property to target domestic Asian play but has also poached talent from Sands Bethlehem. As a new property situated in a more remote location, Resorts World Catskills is aggressively marketing to players in the same market area to build up its business. These factors are clearly having a negative impact on Sands.”

Poker Down 8.5%

The Keystone State’s 10 land-based poker rooms collected $4.62 million in April, with that figure lower by 8.5% compared to the $5.05 million taken in April 2017. As a result, Pennsylvania’s 225 poker tables have now generated $19.41 million over the first four months of this year, or 4.7% down on the $20.37 million collected over the same period in 2017. Helping to explain some of Pennsylvania’s declining poker revenue is an equivalent growth in the poker market of Maryland on its southern border, which has subsequently drawn away some of its players.

Overall Numbers

Pennsylvania’s casinos generated a combined $280.9 million in revenue last month, which was down by 7% compared to March, and lower by 1.56% versus last April. Here is a closer look on how each of the individual casino numbers stacked up last month:

Parx Casino, Bensalem: Slots $35.6M (+6.04%), Tables $16.5M (+7.12%)
Sand’s Casino Resort, Bethlehem: Slots $26.1M (-1.01%), Tables $17.6M (-19.76%)
Rivers Casino, Pittsburgh: Slots $24M (+4.32%, Tables $6.5M (10.28%)
Meadows Casino, Washington: Slots $17.7M (-8.36%), Tables $4M (-7.21%)
Hollywood Casino, Grantville: Slots $18.6M (-1.93%), Tables $3.1M (+1.13)
SugarHouse Casino, Philadelphia: Slots $15.6M (-0.90%), Tables $10.2M (-1.86%)
Harrah’s Philadelphia, Chester: Slots $17.6M (-3.05%), Tables $6.4M (+27.81%)
Mohegan Sun Pocono, Wilkes-Barre: Slots $17.5M (-3.46%), Tables $3.2M (-7.65%)
Mount Airy Casino Resort, Mt. Pocono: Slots $12.6M (-0.40%), Tables $3.6M (-25.89%)
Presque Isle Downs and Casino, Erie: Slots $10.2M (+7.22%), Tables $1.1M (-23.50%)
Valley Forge Casino Resort: Slots $8M (+9.07%), Tables $2.1M (-38.10%)
Lady Luck Casino Nemacolin: Slots $2.3M (-10.70%), Tables $214,833 (-21.95%)

Online Gambling Potential

Looking ahead, Pennsylvania’s casino market is set to benefit from the widespread gambling expansion approved last year, which also includes provisions to bring online gambling to the state. This year has already included legalized fantasy sports, and online Keno, with virtual sports betting and the launch of an iLottery app expected soon. The landmark Supreme Court decision concerning sports betting, which Pennsylvania has already preemptively authorized in its gaming expansion package, is also set to have a dramatic impact on the state’s overall profitability, although analysts predict legal sports betting being offered online might be six months away at the earliest.

Nevertheless, there are are number of restrictive measures which Pennsylvania is currently considering which may limit its attractiveness to operators. At the top of the list are massive tax rates levied on online slots revenues (54%), online table games (16%), and poker revenues (16%), placing Pennsylvania operators at a serious disadvantage compared to neighboring states. Furthermore, players will not be allowed to play online from inside a casino, cutting off an important brand promotion and potential recruitment tool for the casinos.