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Monday, January 14, 2008

Business Booms in PA

- Which casino on the East Coast generates the highest daily win per machine? It's Mohegan Sun at Pocono Downs in Wilkes-Barre, Pennsylvania with $403 over the period from September to November of last year. That's the kind of number that racinos in New York would die for. Some are not making half that much. NYRA is counting on that kind of business in the near future at its racino at Aqueduct. Although the association, in its reorganization plan (the exclusivity of which was extended by bankruptcy court for another month), projects a reasonable $275 for 2009, revenues for the 4,500 machines are estimated to reach $503 by 2012.

What the landscape for slots will be by then, we have no idea. One would think that people would get sick of them at some point! But any way you look at it, that certainly seems to be an ambitious number. No one in the state is even approaching it now, and competition is only going to increase, including two glitzy facilities opening in Philadelphia, just 100 miles to the south.

If Pennsylvania is any indication however, there's still plenty of demand and gambling money to go around. The state's VLT parlors account for four out of the top five win per machine figures on the east coast.

The Mohegan Sun in Connecticut came in second at $390 per machine, followed by three Pennsylvania casinos: Philadelphia Park at $369 per machine, the Meadows at $347 per machine and Harrah's Chester at $322 per machine. [Associated Press]
I quoted a NY Post report the other day to the effect that 18% of slots revenue goes to purses in Pennsylvania; that seemed rather high! My own research puts the figure at 9.6%, which still dwarfs the 6.5% included in the MOU, and beats the 8.75% compromise figure that the NY harness horsemen are currently negotiating for. We can certainly see why purses in the state are projected to grow so high. (And it doesn't hurt that Pennsylvania's casinos are open around the clock!)

Pocono Downs is less than two hours from Monticello Racing and Gaming Gaming and Racing; the track and racino are losing a total of $1 million a month, and parent company Empire Resorts' hopes for an Indian casino were quashed last week, at least for the time being. The crux of the harness tracks' argument for higher revenue percentages is that they can't compete, in terms of marketing nor facilities, with the Pennsylvania casinos and their more beneficial tax structure. Monticello, given its proximity to the neighboring state, would seem to be a prime example. (Though it's Vernon Downs which gets the best treatment under the bill passed by the Senate and under negotiation in the Assembly.)

It would be a sad day for me personally if the track ever closed given my history with the place. Even had the St Regis casino been approved, its continued existence may have been in doubt given how insignificant racing would have become on the income statement. Now, it seems like it's dying a slow, sad death. The news only gets worse. Pocono Downs hasn't even opened its permanent facility yet! It will double the number of machines to 2,500 when it does this summer. Furthermore, a new slots parlor opened in October at Mount Airy Lodge, also less than two hours away from The Mighty M.

(Hat tip to Albany Law School's Racing and Gaming Today.)

1 Comment:

jk said...

I suggest everyone take a trip to Mohegan Sun in CT. The racebook is outstanding. You can bet from your comfortable seat. The girls come around with free drinks. 4 big screens show the major tracks and you can watch any track from your individual tv.

If you are into the slots, plenty to choose from in luxurt surroundings.

When you get hungy, plenty of dining options from 5 star to buffet.

They also have A-list entertainment in their arena.

I know I sound like a shill for this place but if you spend a day at Mohegan you will see how far behind the curve the Big A slot idea is.

The Mohegan experience is what generates $400/day per slot machine. It is no surprise Yonkers, Monti and others are lagging badly. The Big A will lag as well.