Making the News

Delaware County Times

Originally Published:Thursday, February 1, 2007

"That is a very healthy figure in the gaming industry," said Joseph Weinert, vice president of Spectrum Gaming Group, a New Jersey-based consulting firm.

Jackpot! Harrah's Chester takes in $66M in first week, pays out $60M

By WILLIAM BENDER
Delaware County Times

Harrah's Chester Casino and Racetrack took in $66.4 million in wagers -- $16 million on Saturday alone -- in its first week of operations, paying 90 percent back to the thousands of slots players that have tried their luck since last Monday's opening.

More than $83 million had been pumped into the casino's 2,744 machines through Tuesday, according to the Pennsylvania Gaming Control Board.

"You have figures that are high because of the excitement of opening," said board spokesman Doug Harbach. "But at the same time, Harrah's has proven itself to be an extremely good marketer and we expect that they'll be able to attract players."

During its first week, the casino reported gross slots revenue of $6.4 million, 55 percent of which will be collected by the state to fund property-tax relief.

Each machine generated daily revenue of $332, which exceeds what both Harrah's and the state gaming board had anticipated.

"That is a very healthy figure in the gaming industry," said Joseph Weinert, vice president of Spectrum Gaming Group, a New Jersey-based consulting firm.

The average slot machine on the East Coast generates about $250 a day, Weinert said. Last week, the machines at Mohegan Sun at Pocono Downs generated $378 a day, compared to $317 at Philadelphia Park Casino and Racetrack.

Weinert warned against reading too much into Harrah's early numbers. "The first week's results, while encouraging, are not necessarily a meaningful predictor of how successful this property is going to be," he said.

Revenue will likely fall off in Chester once Philadelphia's two stand-alone slots parlors open their doors and provide local competition. But Harrah's head start gives it the opportunity to establish a loyal customer base, particularly through the Total Rewards program -- its equivalent of airlines' frequent-flier programs.

"Clearly, the downtown Philadelphia casinos will cannibalize some of Harrah's revenue," Weinert said.

"However, Harrah's has a very powerful tool to retain its customers and that is the Total Rewards program. Customers who will be accumulating points over the next 18 to 24 months are not going to easily defect to the new guy in town."

Pennsylvania casinos are required to pay out a minimum of 85 percent of all wagers. Through Tuesday, Harrah's had paid out $75.3 million, or 90.5 percent, according to the gaming board.

Delaware County officials have been monitoring Harrah's revenue through the gaming board Web site. Chester City will receive $10 million a year in gaming revenue, while the county will get a 4 percent cut that is expected to equal $6 million to $8 million a year.

Linda Cartisano, a county councilwoman and Chester resident, has been monitoring the situation in person -- and winning some cash in the process.

"I don't want anybody calling Gamblers Anonymous on me," she joked.

For the record, Cartisano is not a compulsive gambler, but those who are can call (800) 522-4700 for help.

"I loved it," she said of her trip to Harrah's. "It's a great place to have dinner, have drinks, meet friends. People that want to play slots can do so, but if they're not into that, they can sit and have a drink in the lounge area."

Weinert, the gaming analyst, said he expects Harrah's to hold its own against the Philadelphia slots parlors, because of its location and success in "cross-market play." Through the Total Rewards program, points accumulated at the Chester casino can be redeemed at Harrah's casinos in Las Vegas and Atlantic City.

"Harrah's Chester also enjoys very good access and I think for many patrons they'll see that as a more hassle-free experience" than driving into Philadelphia, Weinert said.

Under Act 1, slots revenue will be directed toward statewide property relief.

If the state fund reaches $1 billion, as Gov. Rendell has predicted, Delaware County residents will see reductions ranging from a high of $567 in Chester-Upland School District to a low of $199 in Marple Newtown School District.

Act 1 also gives voters the opportunity in May to offset a portion of their property taxes by increasing their local income taxes.

The gaming revenue is expected to begin reducing property taxes by 2008 or 2009.

"They're doing very well," Steve Kniley, spokesman for the state Department of Revenue, said of Harrah's.

"I'm sure they're happy with the results, and so are we, because the state share goes to lowering property taxes."

Vince Donlevie, senior vice president and general manager of Harrah's Chester Casino and Racetrack, was not available for comment Wednesday.

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