Pennsylvania Casinos Business - Annual Gambling Profits Fall
The state of Pennsylvania finds itself bounded by alligators, which indicates that those days when the casino industry of the state witnessed whopping profits have ended. According to experts, more of the available gamblers from the East are being wolfed down by more casinos in more number of states.
Nevertheless, the same does not indicate that operators in Pennsylvania are in loss. Pennsylvania Gaming Control Board’s chairman, William H. Ryan Jr., says that the times when casino revenues witnessed growth have become history, perhaps. New properties had given rise to that growth, most of which have now disappeared. But, what’s the good part is that the industry is still doing well.
In 2007, as many as seven casinos surfaced to bring in around $1.4 billion in the first fiscal year. And in 2012, $3.14 billion was gathered by Pennsylvania operators to aid the state outshine New Jersey and grab the second position in the country after Nevada. But, the previous fiscal year reported the first plunge of the state in annual gambling revenue, with 12 running casinos reporting just $3.05 billion revenue.
According to a Tribune-Review analysis, final figures for fiscal year ended June 30 are still to be released and the state casinos are likely to spring back a bit to $3.1 billion. This would make it the fourth year in a row to report total gambling revenue of $3 billion. Veteran casino industry analyst Larry Klatzkin says that there is nothing bad with the market hitting its pace, which always happens.
Where in 1988, only two states ran casinos, a total of 43 states run them now, including all states along the borders of Pennsylvania. Further, even more casinos are in the pipeline for the next year. New York money manager and casino and entertainment industry expert, Harold “Hal” Vogel, affirms that these are bounded by alligators. The US market has seen a saturation point and all states were likely to see a negligible growth.
Table games were introduced in 2011-12, which brought annual revenue growth for Pennsylvania’s individual properties that year. But, in the two fiscal years that followed, merely two casinos, viz. Sands Casino Resort Bethlehem and Valley Forge Casino Resort in King of Prussia could report a growth in revenue.
On the other hand, Rivers Casino in Pittsburgh in Western Pennsylvania realized a reduction by 2.3% in gambling revenue the previous year. Back two years, it reported $353.4 million revenue. Nonetheless, analysts expect a little improvement this year.
In the last two years, Erie’s Presque Isle Downs & Casino and North Strabane’s The Meadows Racetrack & Casino also came up with a plummet in their revenue. That of Presque Isle declined by 27% to touch $135.9 million and The Meadows reported a 23% fall to $250.8 million. Their revenues may further drop this year.
However, Lady Luck Casino Nemacolin that opened in Western Pennsylvania two years back may reach $34 million this year i.e. a rise on $28.2 million the previous year.
It has been eight years when casinos were introduced in Pennsylvania, and four changes of ownership have been approved by the Gaming Control Board ever since. In 2013, at least $1 billion was required by Las Vegas Sands Corp. for its Bethlehem casino, the second-highest-earning casino after Bensalem Parx Casino and Racing. Since 2009-10, only Sands Bethlehem casino is reporting a constant revenue growth.
Now, Las Vegas Sands along with developers seek to invest some $800 million into the earlier Bethlehem Steel site spread over 126 acres. They seek to add a second hotel with restaurants. Gaming Control Board’s Ryan said that they aimed to make these individual properties destinations and not just casinos.
In order to tackle the competition, a 155-room Hyatt Place hotel has been opened this year by The Meadows on its property. The Street, which is a residential and retail development, is being constructed in 22 acres. Adjacent to it, a hotel is being planned by Rivers Casino officials. Ryan said that the people in it were astute and knew that they needed to compete.
Las Vegas’s University of Nevada’s professor William Thompson avows that it is clear why casinos need to expand with more entertainment options over gambling. Thompson is studying the casino industry, who added that the zenith for a significant growth was over. And New York was expected to go beyond the state of Pennsylvania in terms of annual gambling revenue, since seven casinos were on the edge of opening there.