PA casinos, what is in the future

Quote: Avincow

I think I was there once. Is that the one that's next to the prison? That place is massive. but seriously, wtf, next to a prison!?

Yes, it is right next to the prison. Chester (a small town) has one of the highest murder rates in Pennsylavnia. It was ranked the most dangerous city in PA

Murder rates in Chester by Year
Murders 2000-2012 (per 100,000) population 34,000
18 (43.8)
12 (32.4)
19 (51.2)
15 (40.6)
18 (48.5)
27 (73.4)
17 (46.4)
14 (38.3)
24 (64.3)
21 (61.6)
22 (64.3)

Despite the Murder rate in Chester, Harrah's started out very strong. In 2009/10 (the last year there was only slots), revenue before taxes per casino in millions. Sheldon Adelson was publicly announcing that he would have never started Sands Bethlehem if he knew that he was going to win the big licenses in Macao and in Singapore.
$381.65 parx
$306.76 Harrah's Philadelphia
$261.07 The Meadows
$246.99 Penn National
$240.18 Sands Bethlehem <--- Fifth place their first year of full operation (slots only)
$222.59 Mohegan Sun
$195.46 The Rivers
$164.70 Presque Isle
$145.44 Mount Airy

Four years later, Sands Bethlehem was the highest grossing casino in PA after taxes thanks to the huge revenue they make in table games which is taxed at a much lower rte than slots.

Quote: coilman

and the main police station... which of those two should one fear the most

Regards
Walter Budzyn and Larry Nevers

The police HQ moved to the building that was the temporary MGM casino. So that is just across Michigan Avenue from the current MGM.

Back to the original question. The argument a decade ago, was that adults in PA are entitled to gamble, and they are simply spending their money in New Jersey instead of PA. The decision was to make slot only clubs. Then it was clear that slot revenue at 53% tax rates was insufficient to build the kind of casinos that PA wanted (ones that would attract out of state revenues). So in exchange for a one time cash payment that closed a budget gap in PA they permitted table games at a much lower tax rate.

Sands Bethlehem, Sugarhouse, and Valley Forge in particular now are making half their money after taxes on table game

PA is not done growing. The Live! Hotel & Casino project, in the Southside sports complex should be a big hit. As long as NJ keeps gaming in Atlantic City, the PA casinos can easily feed off NJ citizens who don't have the time to travel to Atlantic city.

But PA has only two or three years of growth left. Will it be satisifed with meeting original objectives? I think the answer is no.


2013/14 After Tax Revenue in $ Millions (% table games)
EASTERN PA
$283 Sands Bethlehem 54%
$270 parx 39%
$165 Harrah's Philadelphia 38%
$155 SugarHouse 47%
$140 Mohegan Sun 27%
$130 Penn National 23%
$102 Mount Airy 35%
$60 Valley Forge 47%

WESTERN PA
$188 The Rivers 31%
$128 The Meadows 20%
$68 Presque Isle 16%
$15 Nemacolin 27%
$1,705 Statewide PA 37%

Even though Presque Isles is a full size casino in Eries with 1600 machines, and Valley Forge is restricted to 600 machines, because table games are so much higher in VF, they are behind this year by only 4.5% in after tax revenue.

I can't see any effort possible to increase revenue through value and volume, so they'll stay short term. Taxes seem moot considering nearby states offer comparable payouts with lower taxes. Nickel and diming on stupid things nongaming in Pa. drove me away pretty much. So basically the plans are business as usual seeking easy money only. They'll stay open no problem.

I guess a PA state legislator was reading this topic. State Rep. Nick Kotik, D-Coraopolis, said Wednesday he intends to introduce a bill in two to three weeks that would allow international airports in Pennsylvania, including Pittsburgh, to install slot machines in secured places like boarding areas — at least on a pilot basis.
The article also had this tidbit. During the 75-minute hearing at the casino, Rivers officials argued against the issuance of any more resort casino licenses while backing efforts to allow Internet gambling as well as fantasy sports and skill-based games in state casinos.

http://www.post-gazette.com/business/pittsburgh-company-news/2015/05/21/Slot-machines-could-be-heading-to-Pennsylvania-international-airports/stories/201505210111

I'm surprised Rivers overtook and surpassed Meadows fairly quickly.

Now, we all know Meadows sucks in general, but people like to go to suburban slot barns instead of downtown casinos. Rivers must have been doing something right.

Quote: teddys

people like to go to suburban slot barns instead of downtown casinos. Rivers must have been doing something right.

I think that there are just not that many people within driving distance of The Meadows compared to downtown Pittsburgh,

Since PA casinos pay such a dramatically smaller tax percentage on table games than slots, the money making casinos are the ones that are pulling in a proportionately larger share of table game revenue. Sands Bethlehem is the only one that makes more money (after tax) on table games since it is doing so well in bringing in the NJ and NYC residents.

The more urban casinos and the ones near the NJ border are much higher on the list as to the share they owe to table games.

2013/14 After Tax Revenue(% table games)
53.9% Sands Bethlehem
47.4% SugarHouse
47.3% Valley Forge
38.9% parx
38.4% Harrah's Philadelphia
35.5% Mount Airy
31.3% The Rivers
27.4% Mohegan Sun
27.2% Nemacolin
22.7% Penn National
20.1% The Meadows
15.7% Presque Isle
....
36.7% Statewide PA

Sample Calculation
Sands Bethlehem had
gross revenue of $280.4 million in slots, but they got to keep $130.5 million after taxes.
gross revenue of $177.2 million in table, but they got to keep $152.4 million after taxes.
So 53.9% of after tax revenue was from table games.

Until the recent shutdown in Atlantic City, NJ still exceeded PA in table game revenue. Now the sole remaining statistic that NJ has over PA is that the Borgata has the largest share of table game revenue for a single resort.

CY 2014
$209,561,815 Borgata
$119,977,272 Ceasars
$92,119,539 Harrah's
$74,578,853 Bally
$55,934,907 Taj Mahal
$53,617,131 Tropicana
$46,427,593 Golden Nugget
$29,167,535 Resorts
$681,384,645

If Borgata drops 5% this year, and Sands Bethlehem PA keeps with it's 13% increase , then even that superlative will end.

Bethlehem Sands is now challenging Borgata as an entertainment venue, but it is very unlikely that it will expand in hotel rooms to beat Borgata in conventions and in destinations for events like weddings.

Quote: pacomartin

Until the recent shutdown in Atlantic City, NJ still exceeded PA in table game revenue. Now the sole remaining statistic that NJ has over PA is that the Borgata has the largest share of table game revenue for a single resort.

CY 2014
$209,561,815 Borgata
$119,977,272 Ceasars
$92,119,539 Harrah's
$74,578,853 Bally
$55,934,907 Taj Mahal
$53,617,131 Tropicana
$46,427,593 Golden Nugget
$29,167,535 Resorts
$681,384,645

If Borgata drops 5% this year, and Sands Bethlehem PA keeps with it's 13% increase , then even that superlative will end.

Bethlehem Sands is now challenging Borgata as an entertainment venue, but it is very unlikely that it will expand in hotel rooms to beat Borgata in conventions and in destinations for events like weddings.

I'd rather be Borgata than Sands any day. B will long be the number 1 destination casino resort in south Jersey and Philly. Sands will take a major, major tumble with real NY casinos and north Jersey casinos.

Quote: onenickelmiracle

I can't see any effort possible to increase revenue through value and volume, so they'll stay short term. Taxes seem moot considering nearby states offer comparable payouts with lower taxes. Nickel and diming on stupid things nongaming in Pa. drove me away pretty much. So basically the plans are business as usual seeking easy money only. They'll stay open no problem.

It is a lot of business' attitudes not just gaming. Gaming in the northeast has now shown the habit of riding on previous coattails.