IS PENNSYLVANIA DOING BETTER THAN ATLANTIC CITY?

Pennsylvania slot revenue beats Atlantic City

By DONALD WITTKOWSKI Staff Writer Posted: Thursday, January 21, 2010

People play the "Indiana Jones" slot machines Thursday at the Trump Taj Mahal Casino Resort in Atlantic City. For the first time ever in December, Pennsylvania’s slot revenue surpassed Atlantic City’s — $189 million compared to $179 million, according to newly released figures by the Gaming Industry Observer, a casino newsletter.

ATLANTIC CITY — Pennsylvania now holds bragging rights in the battle with Atlantic City for slots supremacy on the East Coast.

For the first time ever in December, Pennsylvania’s slot revenue surpassed Atlantic City’s — $189 million compared to $179 million, according to newly released figures by the Gaming Industry Observer, a casino newsletter.

“From Pennsylvania’s standpoint, it is a milestone, though it is not unexpected,” newsletter editor Joseph Weinert said of the surging Pennsylvania market.

December’s results mean Pennsylvania is now tops in slots among casino states from Maine to Florida.

The $189 million in slot revenue represented the “win” at Pennsylvania’s nine casinos. Stated another way, it is the amount of money lost by gamblers playing the slot machines.
Weinert estimated that about half of the slot revenue generated by casinos in eastern Pennsylvania would have gone to Atlantic City otherwise.

Pennsylvania also edged Atlantic City’s 11 casinos in the “handle,” the total amount of money wagered on the slots. In December, gamblers fed $2.1 billion into the Pennsylvania slot machines compared to $2 billion in Atlantic City.

Of some consolation to Atlantic City casinos, they still rank higher than Pennsylvania’s slot parlors in total revenue because of winnings from table games. However, Atlantic City’s $1.2 billion table games franchise is in jeopardy because Pennsylvania will introduce blackjack, roulette, craps, poker and other table games later this year.

“Pennsylvania’s going to take a chunk out of Atlantic City’s table games. We expect the brunt of that in 2011, when table games are going full bore,” Weinert said.

Weinert also noted that the start of table games later this year at Delaware’s three racetrack casinos would add even more competition.

Looking ahead in 2010, the Gaming Industry Observer, published by the Linwood-based casino consulting firm Spectrum Gaming Group, is forecasting a 4.6 percent gain, to $7.1 billion, in gross gaming revenue for the 22 casinos in the mid-Atlantic region.

While revenue in the mid-Atlantic area is projected to grow overall, Atlantic City’s casino winnings will slump 4.3 percent to slightly less than $3.8 billion in 2010, according to the newsletter.

Pennsylvania’s revenue will jump 24 percent this year, followed by an 8 percent increase in Delaware and a 5 percent increase at the Empire City casino in Yonkers, N.Y., the newsletter predicts.

“The ongoing expansion of Pennsylvania gaming, including the opening of the Parx Casino last month and the introduction of live table games in the second half of this year, continues to shape the regional competitive landscape,” said Shawn McCloud, director of financial analysis for Spectrum Gaming Group.

The weak economy and rival casinos in surrounding states have combined to drive down Atlantic City’s revenue three straight years. In 2009, total revenue from slot machines and table games declined 13.2 percent to $3.9 billion in the worst year since 1997.

In comparison, Pennsylvania’s total slot revenue jumped 21 percent in 2009 to $1.96 billion, according to the Pennsylvania Gaming Control Board.

Thomas D. Carver, executive director of the New Jersey Casino Reinvestment Development Authority, said Atlantic City must respond to the competition by transforming itself into a more attractive tourist hub.

“I think we’re trying to address those items at this time, basically to change Atlantic City and make it a true destination resort,” said Carver, whose agency uses casino revenue for housing projects and economic development. “We have to make the town attractive, welcoming and safe.”

With the Pennsylvania and Atlantic City markets going in opposite directions, it should come as no surprise that Pennsylvania would overtake Atlantic City in slot revenue, Carver said.
“I’ve been concerned since 1993, when I predicted that competition ultimately would arise in the region,” he said.

Atlantic City lost its East Coast casino monopoly when the Foxwoods gaming resort opened in Connecticut in 1992. Competition grew even more intense when Delaware’s racetracks got slots in 1995 and casino gambling came to Pennsylvania in 2006. New York, West Virginia, Rhode Island, Maine and Florida are among other East Coast states that have legalized casino gambling since the 1990s.