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Monday, September 25, 2006

Lots and LOTS of SLOTS

- On Wednesday, Pennsylvania's Gaming Board is expected to issue conditional licenses for racetracks to proceed with opening their slots parlors, subject to issuance of permanent licenses in December. With most, if not all of the tracks expected to get the go-ahead, Magna will no doubt breathe a sigh of relief if and when the Meadows gets past this point.

The scope of the gambling about to come to the state is absolutely breathtaking; the annual take is projected to be $3 billion a year, with most of the state's share to be used to help cut local taxes and boost the state's share of spending on public schools.

If [the] projection proves accurate, Pennsylvania would become the third-biggest commercial gambling state in the nation, behind Nevada and New Jersey and ahead of Mississippi and Indiana, based on 2005 statistics compiled by the American Gaming Association.
.....
With racetracks in each corner of the state and most near major population areas -- including Philadelphia and Pittsburgh -- at least two-thirds of Pennsylvanians will live within an hour's drive of a gambling hall. [AP]
We're also starting to see the magnitude of what is actually being proposed in Ohio by Learn and Earn, much to the dismay and disbelief of opponents there. In order to meet the lofty promise of contributing $850 million annually to college scholarships, the sponsors of State Issue 3 assume that Ohio will have 31,500 slot machines spread across seven horse-racing tracks and two downtown Cleveland casinos.
For that to happen, every one of Ohio’s gambling facilities — including racetracks in Grove City, Lebanon and Northfield — would have to be larger than the largest casino in Indiana, Illinois and Missouri, a Dispatch analysis of gambling in the three Midwestern states found.
These projections have drawn predictable attacks from slots opponents.
The co-chair of the Vote No Casinos campaign, David P. Zanotti, said that $2.8 billion figure is inflated from Learn and Earn’s own previous projections.

"How did their gross revenue go from $2.3 billion to $2.8 billion? Just by them talking about it?" Zanotti asked. "If this were being done in the private sector, it would be no different than Enron. [Columbus Dispatch]
One thing's for sure, folks in the racing industry, in slots states, anyway, sure have a nice lot in life these days. They have failing business models, but are fortunate enough to be subsidized and artificially propped up. Imagine owning a struggling business, and someone comes to you and says 'hey, how about I move in with you and I'll give you 20% of my $3 billion business, just for the right for me to be in business? Nah, you don't have to do anything, just keep losing money.' And unlike their competitors, racing is immune from any anti-Internet gambling bills pending in Congress. There's very little to complain about, high tax rates in states like Pennsylvania and Florida notwithstanding, and if the industry doesn't come up with its own solutions before the VLT bubble implodes, it's their own fault.

And implosion is only a matter of time and space.

- Here's the schedule of expected openings in Pennsylvania. Pocono Downs is scheduled to first, in November, followed by Harrah's Chester Downs. Harrah's drew some criticism last week over their opposition to slots at the Meadowlands. They, as well as other Atlantic City casino owners, say that slots at the Big M would hurt business in AC. But at the same time, Harrah's is opening the Chester casino, which is actually 50 miles closer to Atlantic City than is the Meadowlands. And as Bill Finley points out on ESPN.com, many people who the casinos say won't come to AC if there are slots at the Meadowlands will end up going to Yonkers or Aqueduct anyway.

2 Comments:

Mike E said...

Hey Alan,

Just wondering:

Anthing to add about Just Zip It's work this morning?

Best Wishes

QQ said...

And despite the blanket slots coverage of the Keystone state, Pittsburgh's nearest Thoroughbred racing venue will still be in West Virginia!