Sugar House casino will open in September

Sugar House has announced that they will be opening in September. The website is not completed yet. This is the first downtown Philadelphia (pop. 1.5 million). PARX is in Bucks county (pop. 600K) just outside of Philadelphia . Presumably Sugar House will pass PARX to be the highest grossing casino in PA.

All revenue is in $million per year and does not include table games.

Philadelphia Area
Parx (Formerly Philadelphia Park) $375
Harrah's Chester Downs $312

Eastern/ Central PA
Penn National $246
Sands Bethlehem $227 (only open 49 weeks)
Mohegan Sun $223
Mount Airy $150

Western Pennsylvania
The Meadows $275
The Rivers $208
Presque Isle $165

The average of the 23 major casinos on the Vegas strip is $105 million in slots, and $120 million in gaming other than slots.

these casinos make less than $1 million a year?

Quote: pokerface

these casinos make less than $1 million a year?

My mistake, values are in millions.

OK. so they make more than most strip casinos.
lots of money in PA

Quote: pokerface

OK. so they make more than most strip casinos.
lots of money in PA

I think what is important is that PA slot revenue will exceed slot revenue on the Vegas strip, probably when Sugar House opens. But it will be concentrated in fewer casinos. PA is still leading the way for the new casino states.

Pit revenue on Vegas strip is down 15% and slot revenue is down 20%. Pit is decreasing in most games, but increasing in baccarat. Slots are decreasing in most games, but increasing in penny slots.

It is difficult to predict long term, but I think there has been an irreversible change. Even though there is only 5% difference between the drop in pit and the drop in slots, I don't think slots will ever come back.

DO you think the Strip (or Vegas in general) will ever come back?
Seems to me Vegas is on a long losing streak.

Quote: pokerface

DO you think the Strip (or Vegas in general) will ever come back? Seems to me Vegas is on a long losing streak.

Interesting question. Eventually the gaming revenue will return to it's peak. It is currently down $1.16 billion from the peak (30 months ago). But when it returns it will be much greater percentage baccarat.
But coming back means a lot more than reaching the peak again 4 or 5 years later. Vegas was built around decades of steady increase in gaming revenue. Baccarat requires a lot fewer tables and hotel rooms.

I don't think the thousands of budget rooms that were constructed around low level slot play can survive.

It is still possible that CITY CENTER will sink MGM-MIRAGE. WYNN and SANDS are still only making money in Asia.

You are a pro so I think you are probably right.
But I still doubt baccarat can attract most ordinary gamblers.

Quote: pokerface

You are a pro so I think you are probably right.
But I still doubt baccarat can attract most ordinary gamblers.

I didn't say that. I think that the growth in baccarat in Asia is astonishing, It grows by billions every year. Some of them will come to Vegas. The Chinese society is going to get more mobile, and eventually they will be the source of the greatest number of tourists on Earth. Even though most of this money may go to places like Singapore, some of it will come to Vegas. I think that the growth in baccarat will eventually replace the lost revenue.

But Vegas will be very different. Eventually the aging resorts will close and not be replaced. Corporations will not want to run the old casinos that make $1 a day per room in profit. It will be like Reno. You will have smaller numbers of well paid tourists taking care of a small, but very rich source of gaming revenue.

I said in my earlier post that slots dropped 20% and pit games dropped 15%. Just to subdivide that further, slots dropped 20%, all table games except baccarat dropped 29% and baccarat rose by 18%.

Basically slot revenue has returned to what it was 5 years 7 months ago. Blackjack is back over a decade.

Last month is the first month in 30 months that indicates that there is a possibility that the Vegas strip minus baccarat has hit bottom.

The astonishing thing about baccarat is that it offers somewhat low HE for a game that requires no skill. However, I suspect that this is actually not the attraction for those who are swept up in the current momentum.

Quote: odiousgambit

The astonishing thing about baccarat is that it offers somewhat low HE for a game that requires no skill. However, I suspect that this is actually not the attraction for those who are swept up in the current momentum.

It is low, but not nearly as low as craps with large odds. It's not even as low as craps with 3,4,5X odds. If I had $25K and my goal was to double it. If choice A was a suite with good liquor and a fine meal and I had to play baccarat, and choice B was complimentary prime rib and some well drinks, but craps with 100X odds I would go for choice B. The probability of you doubling your bankroll is so much higher, that I would rather buy the suite, and the booze and the dinner if I won.

Quote: odiousgambit

The astonishing thing about baccarat is that it offers somewhat low HE for a game that requires no skill. However, I suspect that this is actually not the attraction for those who are swept up in the current momentum.

Well, craps PL+Odds offers an even lower HA, and it requires no skill either.

What do you think the impact the opening of Sugar House will have on Parx Casino? I know that Mount Airy has been pointing to the opening of Sands-Bethlehem as justification for their falling numbers. Do you think the fact that Parx is a racino versus a resort casino might obviate the impact of another nearby casino?

I ask this because one just does not hear Mohegan Sun-Pocono Downs saying the same about Mount Airy; yet one would suspect that the opening of Mount Airy would have impacted Pocono Downs possibly more than that impact felt by Mount Airy with the opening of Sands-Bethlehem. I understand the the local demographics amoungst the three are completely different but I wonder out loud if the real difference isn't the race track?

And now that I think of it, what about Harrah's Chester? What kind of impact do you think they will feel?

Quote: Niblick

What do you think the impact the opening of Sugar House will have on Parx Casino? I know that Mount Airy has been pointing to the opening of Sands-Bethlehem as justification for their falling numbers. Do you think the fact that Parx is a racino versus a resort casino might obviate the impact of another nearby casino?

I ask this because one just does not hear Mohegan Sun-Pocono Downs saying the same about Mount Airy; yet one would suspect that the opening of Mount Airy would have impacted Pocono Downs possibly more than that impact felt by Mount Airy with the opening of Sands-Bethlehem. I understand the the local demographics amoungst the three are completely different but I wonder out loud if the real difference isn't the race track?

And now that I think of it, what about Harrah's Chester? What kind of impact do you think they will feel?

Mohegan Sun-Pocono Downs took a 25% hit when Mount Airy opened up, primarily because Mt Airy is 40 miles closer to New Jersey.

Sugar House will presumably attract most of the gamblers in the city of Philadelphia (1.5 million people). Right now they go to PARX (1 miles outside of city limits) and Harrah's Chester (5 miles outside of city limits). But PARX is trying to minimize it's relationship to the Philadelphia Park Race track. They are trying to attract more of the nearby New Jersey Gambler.

Certainly Bethlehem Sands affected Mt. Airy's number, just as Rivers casino opening in downtown Pittsburgh affected Meadows Racino 20 miles away. But all of the locations for the PA casinos were worked out at once. Since they didn't open at the same time you would expect some cannibalization.

But with table games and a hotel at Sands casino they should both attract more New Jersey customers.

The Sugar House was going to compete with the Wynn/Foxwoods casino less than 4 miles. With that project in limbo, Sugar House will not have any competition for at least a year, and possibly much longer.

Quote: pacomartin

Mohegan Sun-Pocono Downs took a 25% hit when Mount Airy opened up, primarily because Mt Airy is 40 miles closer to New Jersey.

Here's the thing:

If you look at the Gross Terminal Revenues in terms of monthly averages, Pocono Downs was in FY06/07 @ $13.4M; FY07/08 @ $14.3M; FY08/09 @ $18.0M and FY09/10 @ $18.4M. In other words, all upwardly trending (Mount Airy operated for 9 months in FY07/08)and no hit seems to be evident.

Mount Airy's Gross Terminal monthly averages were in FY07/08 @$12.3M; FY08/09 @ $15.0M; then FY09/10 @ $12.2M (Sands-Bethlehem operated for 2 months in FY08/09). Here, you do not see the upward trend--the "hit" is evident.

As an aside, I would caution against using the distance to New Jersey as a direct rationale for the Pocono Downs dip; when you go to Pocono Downs, you don't see too many NJ or NY license plates. While the Pocono Mountains and Scranton/Wilkes-Barre may appear to be contiguous on a map, I assure you that local perception is that they are a universe apart.

Quote: Niblick

Here's the thing:

If you look at the Gross Terminal Revenues in terms of monthly averages, Pocono Downs was in FY06/07 @ $13.4M; FY07/08 @ $14.3M; FY08/09 @ $18.0M and FY09/10 @ $18.4M. In other words, all upwardly trending (Mount Airy operated for 9 months in FY07/08)and no hit seems to be evident.

Pocono Downs took a 25% hit that lasted about 6 months and then they recovered. You can't see it in the yearly average. Either they improved the facility, or they found a new market to replace what they had lost to Mt Airy.

I don't think that either Mt Airy or PA Sands is attracting nearly as many people from NJ as they had hoped. The Bethlehem facility is still pretty limited without the hotel, the shopping or the table games. I know that projections were much higher (by at least 30%). Adelson won the Bethlehem contract within a few months of winning the Singapore contract. He said that if he had to do it all over again, he wouldn't even have competed for the Bethlehem contract. It is rumored that once he finishes the hotel and starts the table games he will sell the place.

The growth rate in Macau and Singapore is so unbelievably spectacular that these companies don't want to dilute their time and effort on projects in the USA. I am sure that Penn National (and Mohecan Sun) will bid on the Bethlehem casino.

The original owner of Mount Airy, Louis DeNaples, is a larger than life figure from the Lackawanna Valley (i.e. Scranton/Dunmore). As you're probably aware, his ownership of Mount Airy was removed by the PA Gaming Control Board and was passed to his daughter, Lisa (go figure). I venture to say that it was his involvement (i.e. popularity of his name) in Mount Airy and the restoration of the name, Mount Airy itself, that moved people from Pocono Downs to Mount Airy just to check out what "Louie" was doing.

Now that those folks have seen that it's cheaper to stay at home at Pocono Downs, they are doing so. FWIW Mount Airy is quite a bit more expensive than Pocono Downs. So I guess what I'm saying is that it isn't any new market, it's the same folks that always went there; and, I think you surmise correctly, they have attracted others by improving the facility/perception.

But where they have improved the facility foremost is at the track; and I perceive a renewed/increased interest in the horses.

And it is this, what I think, revival in horse racing that just may be reflected in those numbers; interest in Harrah's-Chester track is certainly on the upswing, and I wonder, if this is indeed the case, how the numbers are going to work out at Sugar House and the amount of cannibalization of Parx/Harrah's traffic.

Time will tell.

It may interest you to know that Mount Airy is changing a good deal of the decor to an Eastern Pacific Rim motif to appeal more to that market segment.

Time will tell on the move, too.