Pa Slot Revenue
[toc]As was the case in March, strong gains in table game revenue spared the Pennsylvania casino industry from a down April.
Slot revenue continues along a negativetrajectory, with April marking the seventh consecutive month that reel games suffered a setback. Although compared to past months, April’s year-on-year decline was more subdued.
Regardless, it appears that Pennsylvania’s 12 land-based casinos are happilyinvesting more and more stock in their table games. This is likely a reflection of emergent table game technology and the sizeable tax differential between table games (16 percent tax) and slots (54 percent tax).
A tale of two gaming verticals
In April, Pennsylvania generated $79.55 million in table game revenue, representing an uptick of 10.16 percent over the year prior, and 3.34 percent normalized gains over March.
PA DEPARTMENT OF REVENUE PO BOX 280704 HARRISBURG PA. Taxpayers Filing Fewer Than 10 Paper 1099-Rs or 1099MISC Showing PA Tax Withheld Must include the REV-1667, Annual PA DEPARTMENT OF REVENUE. Paper 1099-Rs or 1099-MISC Showing Zero Withholding: PA DEPARTMENT OF REVENUE BUREAU OF. Long-time Pennsylvania slot revenue leader Parx Casino saw its August 2017 slot machine revenue reach over $32 million. This was up 0.17 percent from the $31.98 million posted in August 2016. Plus, perennial Pennsylvania slot machine revenue runner up Sands Casino Resort Bethlehem saw August 2017 slot machine revenue numbers hit over $25 million. This represented a 1.38 percent increase over the $24.78 million in slot machine revenue Sands Bethlehem reported in August 2016.
Seven out of 12 casinos posted table game revenue gains, with five registering double digit percentage upticks.
On the flip side, slot revenue slipped a bit, down -1.58 percent year-on-year to $205.7 million. For the month, slot revenue was down a shade (-2.04 percent), but up 1.23 percent when accounting for March’s slightly longer length.
In total, the industry reaped $285,25 million in April, representing a 1.44 percent uptick over last year, and a 1.81 percent normalized gain over March. Losing casinos outpaced winners, with five casinos showing revenue increases, versus seven losing ground.
Pennsylvania casino winners and losers
One of the biggest mover last month was SandsBethlehem, which registered a 10.06 percent annual uptick ($48.29 million). Sands, which is in the running to be acquired by MGM Resorts International, is hot on the heels of industry leader Parx Casino. Meanwhile, Parx only posted a 0.97 percent year-on-year gain ($49 million).
However, there’s reason to suspect Parx Casino will soon reclaim a larger advantage. It recently announced a $50 million expansion project. Although the casino doesn’t plan to add new casino games, it does intend on moving its poker room. Parx will also add a swatch of non-gaming amenities — which could attract more overall foot traffic to the venue.
By contrast, Sands put the skids on its planned $90 million expansion project, presumably due to the sales talks between MGM and Sands.
But it was PA’s smaller casinos that inked the biggest increases:
- Mt. Airy notched 11.05 percent annual gains, and increased its table game revenue by a whopping 52.85 percent.
- Category III casino Valley Forge Casino Resort saw its revenue spike by 10.92 percent to $10.75 million. Like Mt. Airy, Valley Forge saw its table game revenue skyrocket, up 17.61 percent.
The state’s only other winner was The Meadows: +7.29 percent overall, +52.85 percent in table game revenue.
On the losing side, the struggles continued for both Harrah’s Philadelphia (-4.07 percent), and Mohegan Sun Pocono (-7.59 percent). Rivers Casino was the state’s second-biggest loser (-5.56 percent), while SugarHouse Casino and Hollywood Park posted very modest declines of under 0.5 percent.
Table game expansion on the mind
In April, table game revenue comprised 27.9 percent of the state’s total gaming revenue. That represents a serious increase over last April’s split, when table games accounted for just 25.7 percent.
Still, it doesn’t surprise. In the past year, the state’s land-based casinos have devoted significantrealestate to table games and other amenities. Since April 2016, the number of table games present in the state has swelled modestly. At the same time, the amount of slot terminals dipped by 435 to 26,155.
This trend suggests a slow yet steady departure from the industry’s overreliance on slot terminals for gaming revenue.
Why focus on table games over slots?
But why the change in focus? There’s a few possible reasons:
- Tax rate: Put simply, PA casinos get charged through the nose on slot revenue (54 percent). This isn’t the case for table games, which are taxed at a much more reasonable 16 percent.
- Player frustration: This is pure speculation, but it’s plausible that players are redirecting their gambling dollars away from the state’s slots (which return just approximately 90 percent) to its significantly lower house edge table games.
- Emerging technologies: The rise of stadium gaming enables one or two dealers to service dozens, if not hundreds, of players simultaneously. Stadium games are taxed at the table game rate in Pennsylvania.
On a side note, should Pennsylvania pass online gambling legislation where the online tax rate mimics the land-based one — a real possibility — then online operators may also place the crux of their focus on table games.
Although even then, operators will be extremelyhard–pressed to turn a profit. Online sites are even more reliant on slot revenue than live venues. One reason being, they’re unable to offer high margin, non-gaming amenities, such as food & drink, retail outlets, and hotel rooms.
Judging by the trajectory of Pennsylvania’s land-based industry, a 54 percent tax rate on online slots would eventually result in lower online gambling revenue, and grosslynegative margins.
After a record-setting March, the Pennsylvania casino industry saw its revenue fall by just over 1% in April.
However, April 2019 bested April 2018… if the $4.2 milliongenerated by Pennsylvania’s licensed sportsbooks is added to the revenue mix.
On the month-over-month level, the March to April dip isn’t unexpected. Outside of the summer months, March is huge revenue month for gaming on the East Coast, and a slowdown in April has become a common occurrence.
What about DFS?
The first full year of licensed, regulated daily fantasy sports in Pennsylvania was fairly underwhelming.
All told, Pennsylvania’s licensed DFS operators tallied $22.5 million during their first 12 months. By comparison, New Jersey’s online casino industry tallied $36.5 million in April alone.
So, while states were busy legalizing DFS in recent years, they seem to have had their heads down and missed the proverbial golden goose walking by. Fortunately, Pennsylvania didn’t fall into that trap. The state legalized online gambling and DFS at the same time. PA online casinos are preparing for a scheduled July 15 launch date.
Topline revenue numbers
According to the revenue reports issued by Pennsylvania Gaming Control Board, the state’s gambling operators collectively tallied just over $280 million in April.
April 2019 Pennsylvania casino revenue numbers:
- Slot machine revenue: $200,359,402.90 (-2.82%)
- Table game revenue: $77,448,426 (+3.72%)
- Sports betting revenue: $4,221,482 (no Y/Y comp)
- Total gaming revenue (including sports): $282,029,311
12-month slot revenue trend
After a five-month run of year-over-year gains, slot revenue finally crashed in April. That’s just the third time the state has experienced a Y/Y slot revenue decline in the last 12 months.
- May 2018 slot machine revenue: $203,993,259.02 (+.37 percent)
- June 2018 slot machine revenue: $197,763,672 (+4.9 percent)
- July 2018 slot machine revenue: $203,643,985.78 (-2.62 percent)
- August 2018 slot machine revenue: $201,729,430.81 (+4.42 percent)
- September 2018 slot machine revenue: $196,209,617.90 (+.42 percent)
- October 2018 slot machine revenue: $186,255,556.07 (-1.73 percent)
- November 2018 slot machine revenue: $183,069,176.86 (+.96 percent)
- December 2018 slot machine revenue: $202,840,435.32 (+8.12 percent)
- January 2019 slot machine revenue: $179,842,150 (+1.15 percent)
- February 2019 slot machine revenue: $189,976,151.61 (+.49 percent)
- March 2019 slot machine revenue: $226,597,681.24 (+2.37 percent)
- April 2019 slot machine revenue: $200,359,402.90 (-2.82 percent)
A look at who was up and who was down
As expected in a down month, only four of the state’s 12 casinos posted year-over-year revenue gains in April.
| Casino | Gaming Revenue | Increase/Decrease |
|---|---|---|
| Parx Casino | $51,259,416 | -1.67% |
| Sands Bethlehem | $47,031,211 | 7.63% |
| Rivers Casino | $31,294,242 | 2.70% |
| SugarHouse | $28,462,036 | 9.96% |
| Harrah's Philadelphia | $20,648,441 | -14.26% |
| The Meadows | $19,534,043 | -10.29% |
| Hollywood Casino | $20,727,328 | -4.38% |
| Mohegan Sun | $19,285,858 | -7.22% |
| Mount Airy | $14,142,806 | -13.19% |
| Valley Forge | $11,765,486 | 15.95% |
| Presque Isle Downs | $11,210,451 | -1.47% |
| Lady Luck | $2,446,510 | -3.28% |
| Statewide Total | $277,807,829 | -1.08% |
Market share
*Doesn’t include sports betting
PA market analysis
Sports betting is boosting revenues across the casino
Pennsylvania’s retail-only sports betting market might not be posting the same revenue numbers as New Jersey’s combination retail-online industry, but that doesn’t mean sports betting is a failure in the Keystone State.
In addition to the $4 million in direct revenue generated in April, sports betting is boosting revenues in other areas. At the recent ICE North America conference, two Pennsylvania casino representatives spoke to the ancillary benefits sports betting has provided.
Pa Slot Revenue Office
Jeff Kaplan of Penn National told attendees, “sports is bringing in a younger demographic,” and has led to an increase in table game revenue.
Richard Schwartz of Rush Street has seen similar results, noting that sports betting is driving across every casino sector, including table games, slots, poker, and food and beverage.
Will PA hit its target online gaming launch date?
As noted last month, casino revenue will get a boost when the state (finally) green-lights online casinos and poker rooms. The tentative launch for online casino and poker is slated for July 15.
Pa Slot Revenue Services
However, some backchannel chatter at ICE North America has Play Pennsylvania slightly pessimistic that the state will have all its ducks in a row and launch on time.