Making the News

Philadelphia Inquirer

Originally Published:Tuesday, January 15, 2008

"Pennsylvania is still a very new market, so there's still a lot of interest by adults who want to try something new," said Michael Pollock, managing director of Spectrum Gaming Group. "You've got some very sharp operators there. They know how to reach players and give them what they want."

In Pennsylvania, each slots parlor is licensed for up to 5,000 machines, something that Pollock said should not cause oversaturation.

Pollock said the industry's target for slot-machine gross revenue was, on average, $250 to $300 per machine per day. In that range, a casino has enough machines to accommodate demand.

"You always want to be in a position where an adult who visits your property can find the type of machine he or she wants," he said. "When your numbers get over $300 a day per machine, that is a warning sign that you need more machines."

Pa. casinos rank as slots champs

By Suzette Parmley
Philadelphia Inquirer

Pennsylvania slot machines are raking it in.

After a year in operation, four of the state's casinos were among the top five on the East Coast for slots revenue last fall on a per-machine basis, according to a gaming report released yesterday.

Mohegan Sun at Pocono Downs near Wilkes-Barre, where each of 1,203 slot machines generated on average $403 per day from Sept. 1 through Nov. 30, was ranked first among 40 East Coast casinos, according to data by Spectrum Gaming Group L.L.C., a gambling consulting firm in Linwood, N.J. That average was twice what a slot machine at the Tropicana casino in Atlantic City generated, at $202. The Tropicana was ranked 29th in the survey.

"I don't think we're surprised. Pennsylvania is a robust market," said Mohegan Sun chief executive officer and president Robert Soper. "We're pleased with the outcome."

The Mohegan Sun in Connecticut, also owned by the Mohegan Tribal Gaming Authority, was ranked No. 2 at $390 per machine, followed by three Pennsylvania casinos: Philadelphia Park at $369 per machine, the Meadows Racetrack & Casino at $347 per machine, and Harrah's Chester Casino and Racetrack at $322 per machine.

It's not surprising that all four top finishers in Pennsylvania are expanding their slot-machine inventory.

Mohegan Sun at Pocono Downs opened with 1,110 machines in November 2006, ramped up to 1,203 machines last year, and is in the midst of a $208 million expansion to double its slots capacity to 2,500 machines by summer when its permanent facility opens.

"Pennsylvania is still a very new market, so there's still a lot of interest by adults who want to try something new," said Michael Pollock, managing director of Spectrum Gaming Group. "You've got some very sharp operators there. They know how to reach players and give them what they want."

Gross slots revenue at the six operating slots parlors was $1.04 billion last year, according to the Pennsylvania Gaming Control Board. The state taxes gross gaming revenue at 55 percent, or $572 million last year. The seven-member board in Harrisburg is in charge of regulating the nascent industry.

"I believe the tremendous success in Pennsylvania can be attributed to the high level of cooperation among the Gaming Control Board, the legislature and the operators themselves to meet consumer demands to establish strictly regulated facilities that are both safe and entertaining," board chairwoman Mary DiGiacomo Colins said yesterday.

Gov. Rendell signed the state's slots legislation into law in July 2004 with two primary goals: to provide statewide property-tax relief and to help revive the state's struggling horseracing industry.

Yesterday, state Budget Secretary Michael Masch said slot-machine revenue would provide property-tax cuts to all Pennsylvania homeowners this year. Masch says a special relief fund now contains more than $576 million in slots proceeds, the Associated Press reported.

Seven of the 14 slot licenses were awarded to racetracks. The remaining seven were for stand-alone casinos and resorts, with two licenses for casinos in Philadelphia.

Rendell has predicted that once all 14 casinos were operating, they would generate $1 billion a year for property-tax relief.

There were 12,686 active slot machines at the six Pennsylvania slots parlors by the end of last year. An additional 2,000 machines will be added to the market next month when Hollywood Casino at Penn National Race Course opens in Grantville, just outside Harrisburg.

In Atlantic City, there is no statutory limit on the number of slot machines that a casino can have. Three Atlantic City casinos made the list's top 10: Harrah's Marina with an average daily win per machine at $308; Caesars with $299; and the Borgata at $291.

In Pennsylvania, each slots parlor is licensed for up to 5,000 machines, something that Pollock said should not cause oversaturation.

Pollock said the industry's target for slot-machine gross revenue was, on average, $250 to $300 per machine per day. In that range, a casino has enough machines to accommodate demand.

"You always want to be in a position where an adult who visits your property can find the type of machine he or she wants," he said. "When your numbers get over $300 a day per machine, that is a warning sign that you need more machines."

Such growing pains are being felt at Philadelphia Park, said Dave Jonas, its president and chief operating officer. The casino is adding 300 slot machines in the first quarter of this year, bringing the total to 2,700 machines.

"People are having trouble getting on the most popular machines, and those with denominations like penny and nickel slots, and we can never have enough Wheel of Fortune games," Jonas said.

Philadelphia Park last month was given approval by the state gaming board to begin construction on a $250 million facility that will house up to 4,000 slot machines. The new property is slated for a fall 2009 opening.

 


Contact staff writer Suzette Parmley at 215-854-2594 or [email protected].

 

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