Making the News

Philadelphia Inquirer

Originally Published:Sunday, July 4, 2010
http://www.philly.com/philly/business/homepage/20100704_table_games_to_debut_in_pennsylvania_on_july_8.html

Table games to debut in Pennsylvania on July 8

By Suzette Parmley
Philadelphia Inquirer

Pennsylvania deals itself into table games this week, making its opening wager that blackjack, poker, roulette, craps, and other games will generate millions in new revenue for the state and even more in capital investment that will turn its slots parlors into full-fledged casino hotels.

Thursday's launch of the games at three Western Pennsylvania locations will come almost six years to the day after lawmakers in Harrisburg and Gov. Rendell signed off on the bill that brought casino gambling to the state.

Already, for the fiscal year ended June 30, licensing fees from 10 casino operators for the right to add table games generated $165 million.

For the just-started 2010-11 fiscal year, the state expects an additional $15 million in license fees ($7.5 million each from two yet-to-open smaller casinos), plus about $75 million from the 16 percent tax on table-games proceeds.

"So, on balance, it will be good for the people of Pennsylvania," Rendell said in an interview last week.

Dusty Van Name sees it the same way, though for different reasons. "This is big news for Pennsylvania," said the 61-year-old plumbing contractor from Mount Laurel, who hits the slots at Parx in Bensalem because the site is closer to his house than are Atlantic City's gambling spots.

He goes to Atlantic City on weekends for blackjack and poker. The Shore has "been the only game in town," Van Name said. "Now, with competition, it's got to hurt them."

On Thursday, the first 202 tables, of about 700 statewide, will begin seating players in Western Pennsylvania.

Philadelphia's suburban casinos - Parx and Harrah's Chester Casino & Racetrack in Delaware County - will debut their table games July 18. SugarHouse Casino, under construction on the Philadelphia waterfront, plans to open with 40 tables in mid-September.

"Clearly, now we're going to be more competitive," said Bobby Soper, president of Mohegan Sun at Pocono Downs in Wilkes-Barre, which in November 2006 was the first Pennsylvania slots parlor to open. "It's going to change the whole dynamic of the casino environment."

Yet the competitive picture is less clear than ever. Nearby states are rolling out table games, too, to bulk up their depleted state coffers.

Delaware's formerly slots-only racetrack casinos began ramping up to table games in late May, and all three now offer blackjack, craps, and roulette. West Virginia began table games in October 2007 and Thursday expanded it to Charles Town Races & Slots in Jefferson County.

"States cannot become dependent on gambling revenue, as the tax benefits generated from the gambling are usually short-lived and do not keep pace with the growth in spending and other revenue sources," said policy analyst Lucy Dadayan of the Rockefeller Institute of Government at the State University of New York in Albany.

"While gambling is an easy shot for balancing state budgets, it creates long-term financial damage," she said.

And there are more personal risks, as well. For those with a compulsion to gamble, like 22-year-old Chris Stevens of Hershey, Pa., there is anxiety that greater opportunity may kick an occasional habit into overdrive.

"I'm afraid I'll be here all the time," the unemployed Stevens said during a June visit to Hollywood Casino near Harrisburg, where he played electronic poker.

Stevens is part of the demographic being targeted - younger males - to help counterbalance the 55-year-old female slots player who has been the casinos' bread-and-butter customer.

Financial benefits to the state aside, Rep. Paul Clymer (R., Bucks) envisions a rise in other things.

"Divorce, embezzlements, bankruptcies, dysfunctional families, and crime," said Clymer, who opposed the 2004 slots bill and the legislation to legalize table games. "This only takes money out of the local economy. There is no ripple effect. You lose your money, and that's it."

But so far, gambling has yielded quite a bit of money for the state all around.

Since the opening of the first slots casino in 2006, state taxes from slot-machine play have totaled $3.2 billion, according to the Pennsylvania Gaming Control Board, which regulates the industry.

Last fiscal year, the state earned about $2.15 billion in gross slots revenue, the board said.

Slots revenue is taxed at 55 percent, which means about $1.08 billion went toward property-tax relief, the horse-racing industry, local governments hosting casinos, grants for fire companies, and so on.

Just a year ago, table games were a pipe dream. The state's budget shortfall of about $200 million propelled them toward reality.

Like a wave moving from west to east across the state, the games will debut in staggered openings by region.

Three giant tractor-trailers bearing 57 table games from Las Vegas arrived Monday at Parx, the state's top-grossing casino. For weeks, billboards along I-95 have teased the July 18 start of blackjack, craps, and roulette there.

Like every other gambling hall, Parx has hired hundreds of new employees. Most are dealers; the rest work as cage cashiers and in the security, surveillance, and food and beverage areas.

"All of the Pennsylvania facilities have invested significantly more capital in their business since this was passed," said Bob Green, chairman of Greenwood Racing Inc., which owns Parx. "This was principally a revenue bill, but also very much a jobs bill. That promise of jobs is already being fulfilled, and that will actually continue."

It applies to the Gaming Control Board, too. Spokesman Doug Harbach said about $2.5 million of the board's $35.8 million budget approved last week was for 44 hires. Thirty-seven of them are casino-compliance representatives, who are to be stationed at the casinos.

Last week, some of the new hires, and some current regulators and members of the state police, got training on how to spot table-game cheating from consultant George Joseph at Harrah's Casino in Chester. It was the last part of a five-week statewide training program administered by the Gaming Control Board.

The board also has hired additional lawyers and investigators, an auditor, a gaming lab field representative, and a compliance examiner.

In Atlantic City, casino officials are bracing for more intense pain. Gambling revenue there in the first five months of this year totaled $1.49 billion, down 7.9 percent from the same period in 2009. Table games provide about a third of that revenue.

Spectrum Gaming Group L.L.C. analyst Joseph Weinert estimated that, in the first 12 months of table games, Pennsylvania would see about a 10 percent gain in gross gambling revenue.

"Just as the introduction of slot machines caused Pennsylvanians to stay at home to gamble, a significant part of the gain from table games will come at the expense of Atlantic City and West Virginia," Weinert said.

That is how Rodger Hart, 29, of Norwood, who occasionally goes to Atlantic City for Texas Hold 'Em, looks at it.

As he focused on an electronic blackjack machine at Harrah's Chester, he said, "I'll just come here."

 


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


 

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