Casinos see more competition on horizon
Published: December 15, 2013
Competition is heating up for area casinos. Just in 2013:
- New York voters approved opening as many as seven new casinos, including some potentially in the Catskill Mountains.
- New Jersey's legislators approved online gambling.
- Pennsylvania legislators approved allowing small games of chance at restaurants and bars.
The head of Mohegan Sun at Pocono Downs acknowledged the impact of the competition from potential New York casinos on their business is "concerning."
"The one thing we're paying attention to is where the casinos would be placed and how that would impact our market," said Mike Bean, president of the Plains Twp. casino. "There could be some impact. It depends on where they are placed."
As 12 casinos opened in Pennsylvania over the last seven years, that took away from New Jersey casinos' business.
Now, that could happen to Pennsylvania casinos, said Chris Jones, senior research analyst for the Telsey Advisory Group in New York City.
"Any regional competition is bad," Mr. Jones said. "Adjacent state casino development is, without a doubt, one of the biggest risks to regional gaming."
Online gaming, too, presents a challenge. New Jersey legalized online gaming, but it isn't legal anywhere yet in Pennsylvania.
Pennsylvania lawmakers are looking at online gaming, however, as a way to boost revenue as gambling dollars have been flat or declining.
Mr. Bean said he sees online gaming as something "that could be an opportunity for us, to the extent that it is limited to existing brick and mortar casinos."
"To the extent that it is offered outside of that, it would be a substantial concern to us," he said.
"From what I understand, it would be through brick and mortar casinos and we see there would be opportunity for us."
Mr. Jones said it may be a while before the impact from online gaming in New Jersey on Pennsylvania casinos is known. He said it will depend on how many people want to gamble online and whether or not that will reduce travel to Pennsylvania casinos.
Meanwhile, Gov. Tom Corbett signed a law last month allowing small games of chance, such as pull tab games, daily drawings and raffles, at restaurants and bars. It's the first major gambling expansion since table games were legalized at Pennsylvania casinos in 2009.
Mr. Jones said while small games of chance will cause some competition for casinos, he suspects they will have little impact on the table games business and the high dollar value customers at casinos.
"I think it's going to be the more casual low-spend kind of customer," Mr. Jones said.
Mr. Bean does not suspect small games of chance will have a significant impact on business at Mohegan Sun at Pocono Downs.
"It seems as though the impact would be more on lottery types of games, not the types of games casino players typically pay," he said.
Mr. Bean said Mohegan Sun's customers typically come for more reasons than its 82,000 square feet of gaming space - such as the $50 million hotel and convention center that recently opened, as well as entertainment, restaurants, bars, retail and horse racing. Wise Crackers Comedy Club also opened in the casino last month.
"Our opportunities lie in developing our property to be more of a destination," Mr. Bean said. "Particularly with slots revenue flattening, that indicates a certain level of market saturation. Any additional gambling of any type, added to what is already a saturated market, there is a risk of cannibalization of that market. Therefore, further positioning yourself as a destination is something that we would want to continue. We're going to continue to work on that."
John Culetsu, executive vice president and general manager of Mount Airy Casino Resort in Monroe County, declined to comment about how the casino would be impacted by new competition.
However, like Mohegan Sun at Pocono Downs, Mount Airy also has been investing in improvements to make it a destination, including a $5 million luxury indoor/outdoor project under way.
http://thetimes-tribune.com/news/business/casinos-see-more-competition-on-horizon-1.1601263
- New York voters approved opening as many as seven new casinos, including some potentially in the Catskill Mountains.
- New Jersey's legislators approved online gambling.
- Pennsylvania legislators approved allowing small games of chance at restaurants and bars.
The head of Mohegan Sun at Pocono Downs acknowledged the impact of the competition from potential New York casinos on their business is "concerning."
"The one thing we're paying attention to is where the casinos would be placed and how that would impact our market," said Mike Bean, president of the Plains Twp. casino. "There could be some impact. It depends on where they are placed."
As 12 casinos opened in Pennsylvania over the last seven years, that took away from New Jersey casinos' business.
Now, that could happen to Pennsylvania casinos, said Chris Jones, senior research analyst for the Telsey Advisory Group in New York City.
"Any regional competition is bad," Mr. Jones said. "Adjacent state casino development is, without a doubt, one of the biggest risks to regional gaming."
Online gaming, too, presents a challenge. New Jersey legalized online gaming, but it isn't legal anywhere yet in Pennsylvania.
Pennsylvania lawmakers are looking at online gaming, however, as a way to boost revenue as gambling dollars have been flat or declining.
Mr. Bean said he sees online gaming as something "that could be an opportunity for us, to the extent that it is limited to existing brick and mortar casinos."
"To the extent that it is offered outside of that, it would be a substantial concern to us," he said.
"From what I understand, it would be through brick and mortar casinos and we see there would be opportunity for us."
Mr. Jones said it may be a while before the impact from online gaming in New Jersey on Pennsylvania casinos is known. He said it will depend on how many people want to gamble online and whether or not that will reduce travel to Pennsylvania casinos.
Meanwhile, Gov. Tom Corbett signed a law last month allowing small games of chance, such as pull tab games, daily drawings and raffles, at restaurants and bars. It's the first major gambling expansion since table games were legalized at Pennsylvania casinos in 2009.
Mr. Jones said while small games of chance will cause some competition for casinos, he suspects they will have little impact on the table games business and the high dollar value customers at casinos.
"I think it's going to be the more casual low-spend kind of customer," Mr. Jones said.
Mr. Bean does not suspect small games of chance will have a significant impact on business at Mohegan Sun at Pocono Downs.
"It seems as though the impact would be more on lottery types of games, not the types of games casino players typically pay," he said.
Mr. Bean said Mohegan Sun's customers typically come for more reasons than its 82,000 square feet of gaming space - such as the $50 million hotel and convention center that recently opened, as well as entertainment, restaurants, bars, retail and horse racing. Wise Crackers Comedy Club also opened in the casino last month.
"Our opportunities lie in developing our property to be more of a destination," Mr. Bean said. "Particularly with slots revenue flattening, that indicates a certain level of market saturation. Any additional gambling of any type, added to what is already a saturated market, there is a risk of cannibalization of that market. Therefore, further positioning yourself as a destination is something that we would want to continue. We're going to continue to work on that."
John Culetsu, executive vice president and general manager of Mount Airy Casino Resort in Monroe County, declined to comment about how the casino would be impacted by new competition.
However, like Mohegan Sun at Pocono Downs, Mount Airy also has been investing in improvements to make it a destination, including a $5 million luxury indoor/outdoor project under way.
http://thetimes-tribune.com/news/business/casinos-see-more-competition-on-horizon-1.1601263
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