Making the News

Pittsburgh Post Gazette

Originally Published:Friday, March 6, 2009

State's casinos hit jackpot despite recession

By Gary Rotstein
Pittsburgh Post Gazette


The economic woes dragging down most industries across America have one noisy, colorful, animated exception Pennsylvania's slot machines.

At a time when other sectors are contracting, the six casinos that have been operating for more than a year showed 14.3 percent growth in February 2009 revenue compared to February 2008, the Pennsylvania Gaming Control Board reported yesterday. The growth occurred despite this year's February having one less day than in the 2008 leap year.

Neither a recession, nor cold, nor snow nor anything else is keeping gamblers away from the casinos, which took in $125.9 million this February compared to $110.2 million the same month the year before. Those figures equate to players' losses in the machines, with the casino retaining 45 percent and the rest claimed by the state for taxes and other designated purposes.

"While Pennsylvania's slots market has not yet reached maturity, all indications at this stage are that casinos are returning significant tax revenues to the commonwealth in an amount above what was projected," said Frank T. Donaghue, the gaming board's acting executive director.

An analysis by the Gaming Industry Observer publication shows that Pennsylvania's 16,800 slot machines in January were generating $295 per day, on average, a higher amount than any of eight other Eastern states that have legalized casinos.

Many gambling centers across the country, including Las Vegas and Atlantic City, are suffering year-to-year revenue decline from the recession and other factors. Instead, Pennsylvania has shown consistent increases, with the February-to-February jump the highest of those since a 16.1 percent boost in August.

The $125.9 million statewide revenue figure used in last month's comparison does not reflect a seventh, newer casino, the Hollywood Casino at Penn National, which took in an additional $19.7 million last month.

Joe Weinert, an analyst for the Gaming Industry Observer and Spectrum Gaming Group, said Pennsylvania's relative success makes sense, considering the gambling expansion is still new here.

He noted that New York's racetracks, which also added slots within the past few years, show improved revenue over last year as well.

"Typically with a casino's first three years you see a ramp-up period where you expect significant growth," he said.

"There's a temptation to say, 'Oh, look, Pennsylvania is bucking the national trend,' and from a raw view of the data, that would appear to be true. ... What I would counter with is they would be up even higher, if not for the bad economy," Mr. Weinert said.

One other growth factor is that the six casinos collectively had 1,578 more slot machines this year than last February.

Whatever the reasons, the casinos are among the few businesses growing revenue and hiring employees. The Rivers Casino on Pittsburgh's North Shore, which is supposed to open in August, expects to hold job fairs in mid-to-late April for the hiring of some 1,000 workers.

The Meadows Racetrack & Casino in Washington County is in the process of hiring 300 more workers for the April opening of its expanded racetrack-casino. That permanent facility will have more than twice as many machines as the current 1,825. Those slots generated $20.6 million in February revenue, which was 20.5 percent more than gamblers lost a year earlier.

Meadows spokesman David LaTorre said, "It's just a question of whether Pennsylvania can continue the momentum. We're certainly hopeful that is the case, but increased competition is always something on the horizon."

He noted that The Meadows will be affected by the opening of the Rivers Casino, and the Pennsylvania facilities will be impacted once Maryland opens slot parlors, which have just been legalized there. Ohio casino proponents are also mounting another referendum there this year, after a defeat in November's election, and West Virginia casinos have the advantage of table games.

"While it seems like the Pennsylvania gaming industry is recession-proof, we're not going to take anything for granted," Mr. LaTorre said of various amenities intended to make the new casino in South Strabane better able to compete with others.

Gary Rotstein can be reached at or 412-263-1255.


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