Casinos see more market saturation on horizon

Casinos see more competition on horizon

By Denise Allabaugh (Staff Writer)

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

 

'CASINO MONTHLY STATEMENTS'

Bill Kearney

Massachusetts ‘Gaming’ Future

Open these links and listen to Gov. Rendell and Gov. Corbett thoughts on 'CASINO MONTHLY STATEMENTS'

2012 - Pa. Gov. Corbett ...

http://blip.tv/bill-kearney/kearney-and-pa-gov-corbett-6292321

2008 - Pa. Attorney General Corbett on casinos

1- http://blip.tv/bill-kearney/pennsylvania-s-attorney-general-834435

2- http://blip.tv/bill-kearney/bill-kearney-pa-attorney-general-corbett-1-727251

2006 through 2010 - Pa. Gov. Rendell

http://blip.tv/bill-kearney/gov-rendell-on-casino-statements-3237605

Gov. Rendell freaking out on 60 Minutes.

http://blip.tv/bill-kearney/gov-rendell-freaking-out-on-60-minutes-4630343

 

 

 

 

 

Money from slots has done nothing to improve horse racing

Steve Holt

Here's some more goodness dispelling the myth that slots are the only way to save racing. In reality, all they do is enrich casino/track owners. Eventually, state governments get sick of subsidizing millionaire horse owners and track owners, and they begin to cut back on those subsidies.

NJ Gov. Chris Christie: “I am no longer going to permit millionaire horsemen to take money ... from the taxpayers of the state to fund their industry.”

Ontario Education Minister Laurel Broten: “We simply can’t afford to support ... horse racing subsidies. ... when the ... money could get better health care for our seniors and full-day kindergarten for our 4- and 5-year-olds.”

Share with your neighbors who would vote yes to save jobs at the track or keep horse racing going.

 

 

Money from slots has done nothing to improve horse racing

 

At a time when the horse racing business has suffered a serious decline, one segment of the sport is enjoying a bonanza. These are great times for horsemen in states where purses are subsidized by revenue from slot machines.

Owners and trainers at Parx — the former Philadelphia Park— must think that they have died and gone to heaven when they run a bottom-level $5,000 claimer in a race with a $25,000 purse — plus a bonus if the animal was bred in Pennsylvania. Horsemen at minor league tracks such as Charles Town (W. Va.), Presque Isle Downs (Pa.) and Zia Park (N.M.) regularly compete for big-league purses because of slot money.

These windfalls exist because many states, when they legalized slots, opted to install them in racetracks and decided to aid the sport by earmarking a certain percentage of revenues for purses and breeder awards. But what the state gives, the state can take away, and many are taking a fresh look at their largesse to the horse business:

●In Pennsylvania, Gov. Tom Corbett has proposed cutting $72 million of subsidies to horse racing and breeding to pay for other agricultural projects.

●In Ontario, the provincial government has proposed ending all slots payments to the horse racing industry as of 2013.

●In Indiana, the state’s inspector general advocated slashing the subsidy for horse racing.

●In New Jersey, Gov. Chris Christie ended state support of racing and blasted leaders of the sport for “extorting the taxpayers for millions of dollars in subsidies to their industry.”

Horsemen have reacted with shock and outrage to such proposals, but they should have seen these haymakers coming. Many state governments are under severe financial pressure and are struggling to maintain basic services for their citizens. As politicians look for sources of revenue, they can’t ignore the millions of dollars now flowing into horse racing, and they can readily frame populist arguments that the money is being misallocated.

Christie said: “I am no longer going to permit millionaire horsemen to take money . . . from the taxpayers of the state to fund their industry.” In Ontario, Education Minister Laurel Broten sent out a news release declaring, “We simply can’t afford to support . . . horse racing subsidies. . . . when the . . . money could get better health care for our seniors and full-day kindergarten for our 4- and 5-year-olds.”

In most places, the racing/slot machine relationships developed along similar lines. In some cases, a racetrack couldn’t survive on its own merits, but it was such an important part of its community that the public supported legalizing slots to keep it alive. (This was the case at Charles Town.)

In others, proposals for legalized slots faced a lot of not-in-my-backyard opposition, and the perfect answer was to put the slots in an existing gambling facility — a racetrack. The track, of course, got a percentage of the profits for running the operation. The rationale for allotting money to purses and breeders’ awards (rather than, say, health care for seniors) was to revive the sport by improving the product and attracting more fans.

But every racing fan knows what happened instead. When slots were legalized, the machines proved to be so lucrative many track owners lost interest in the sport and viewed it as a nuisance. They made no effort to improve the game or attract new fans; slot players are more profitable customers.

The day-to-day racing at tracks such as Philadelphia Park and Delaware Park is just about as dreary as it was before slots inflated the purses. One track that has made the most of slot money is Woodbine, in Toronto, which offers some of the best daily cards on the continent and uses its resources to promote the sport and to create new horseplayers. But Woodbine is a rarity.

More often, slot money props up tracks that have virtually no fan base and couldn’t exist on their own merits. This is true of most harness and dog tracks, and some thoroughbred operations — such as Presque Isle Downs. Two previous racetracks in Erie, Pa., went broke from lack of support. Presque Isle was built when slots were legalized in the state, and it had to be a racetrack to get the machines, but its racing business is as pitiful as that of its predecessors. The track’s average attendance last season was 705, and those customers bet an average of $35,000 per day on the live product. Yet Presque Isle pays huge purses — more than $200,000 a day.

While the money has benefited owners, trainers and Pennsylvania breeders, it has done nothing to popularize or improve horse racing. On the contrary, it has hurt the sport in some ways. At a time when almost every track is suffering from a shortage of thoroughbreds, the horses who go to Erie could be running at viable tracks, helping them to offer a better product, instead of racing in a place where almost nobody watches them.

Too many people in the thoroughbred industry are content with the status quo. In the crowded mid-Atlantic region, racetracks should agree to pare down their schedules, offering fewer races with larger fields that fans want to bet. But horsemen habitually resist such cutbacks, and most tracks continue to lose fans.

However, the status quo is unsustainable because more and more politicians will be asking: Why should we subsidize a sport that so few people care about? Why should we help an industry that won’t help itself? And thoroughbred racing can offer no good responses to these questions.

For Andrew Beyer’s previous columns, go to washingtonpost.com/beyer.

http://articles.washingtonpost.com/2012-03-19/sports/35448728_1_slot-money-horsemen-purses

Betraying the Public Trust

Bill Kearney

Massachusetts ‘Gaming’ Future

Erie Times-News - March 3, 2013 - Whether through lottery or slots, government addicted to gambling

Most of the folks I come across who object to Gov. Tom Corbett's plan to outsource management of the Pennsylvania Lottery focus on the prospective loss of homegrown jobs at the hands of a foreign company.
...
But there's a larger question. The Corbett administration's contract with Camelot Global Services -- now in limbo after new state Attorney General Kathleen Kane deemed it unconstitutional -- is premised on Camelot generating a lot more money from the lottery.

That means the state needs people to lose more to cover the coming increase in demand for the programs benefiting senior citizens that lottery proceeds pay for. While sitting in on the Erie Times-News Editorial Board's meeting with Corbett on Friday, I asked him if it was sound policy to fund a big increase in public spending by encouraging more people to gamble (lose) more cash in more ways more often.

Read more: http://www.goerie.com/apps/pbcs.dll/article?AID=2013303039941See More

 

 

 

Pat Howard
Published: March 3, 2013

Pat Howard: Whether through lottery or slots, government addicted to gambling

Pat Howard

Most of the folks I come across who object to Gov. Tom Corbett's plan to outsource management of the Pennsylvania Lottery focus on the prospective loss of homegrown jobs at the hands of a foreign company.

But there's a larger question. The Corbett administration's contract with Camelot Global Services -- now in limbo after new state Attorney General Kathleen Kane deemed it unconstitutional -- is premised on Camelot generating a lot more money from the lottery.

That means the state needs people to lose more to cover the coming increase in demand for the programs benefiting senior citizens that lottery proceeds pay for. While sitting in on the Erie Times-News Editorial Board's meeting with Corbett on Friday, I asked him if it was sound policy to fund a big increase in public spending by encouraging more people to gamble (lose) more cash in more ways more often.

Corbett parsed the issue, saying the idea was to get more people playing rather than coaxing those who already play to lose more. He also noted that the basic course he's on was set in 1971 when the state Legislature created the lottery.

There's no going back, in other words. Just asking the question felt kind of quaint.

Implicit in the governor's plan is another query: What's the alternative? Slashing subsidies to senior citizens as the wave of aging baby boomers swamps Harrisburg would be politically unthinkable, as would raising the sums required through conventional taxes.

So what's needed is a larger pool of suckers who will part with that cash voluntarily. The arrangement with Camelot would commit the company to delivering that in exchange for a piece of the action, which set records for sales and profit in the 2011-12 fiscal year.

While the moral dynamics are similar, the gambling calculus is different in Erie County, where local government's share of the take from Presque Isle Downs & Casino has begun to contract along with the casino's revenue in the face of new competition in Ohio. County government and its Gaming Revenue Authority had been splitting $12 million-plus each year, but it dropped to $11.7 million in 2012 largely because of the opening of Horseshoe Casino Cleveland in May.

When Harrisburg was putting in place casino legislation and as plans for the local slots emporium took shape before its 2007 opening, scattered voices locally raised concerns. Some worried about the effects of gambling's powerful lure on families and the region's social fabric, while others warned that slot machines would redirect people's finite disposable income from the local economy into the casino company's corporate coffers.

Such cautions never got much traction. The prospect of easy money became an unstoppable force.

Much was made of the prevalence of Ohio plates in Presque Isle Downs' parking lots, because whatever cash out-of-state gamblers left behind was a net plus for Erie County's economy. But the Cleveland casino has likely softened that market for good.

We'll get a read on the new normal by the end of the year when the numbers reflect a full year of the more competitive environment. The question isn't if, but by how much, Erie County's share of the take will drop.

What's striking, as that unfolds, is how thoroughly that money has been woven into the planning and finances of county government, not to mention the various civic facilities and institutions that receive annual grants. The casino pipeline didn't exist until six years ago, and now any major slowing in its flow would cause a world of hurt.

Demand for the money quickly expanded to meet the supply. Now it's helping to fuel, among other things, the extension of Erie International Airport's runway, the renovations to Erie Insurance Arena, and a new sprinkler system and water lines at Pleasant Ridge Manor-West.

There's no going back, in other words. So as Gov. Corbett looks for ways to increase the state's lottery take to meet greater need for the things it pays for, local government and nonprofit officials are rooting for Presque Isle Downs to limit its competitive losses so its money can keep covering everything that now depends on it.

Both situations reflect how gambling can be addictive in more ways than one. Government entities that develop the habit soon enough are dependent on a steady supply of people with a weakness for losing odds.

As Corbett suggested, whether it was a good idea in the first place is beside the point. In Erie County, like in Harrisburg, we're all in.

Subsidizing Horse Racing

The Scam - Horse Racing is dying so Slot Barns should subsidize the Racing Industry....and then they don't.

Horseracing group says budget depletes funding

Written by Mary Wilson | Feb 8, 2013

(Harrisburg) -- A horseracing industry group says the governor’s budget gallops away with too much money from a fund that supports it.
 
The Pennsylvania Equine Coalition is taking issue with Governor Corbett’s proposal to draw $31 million out of the Race Horse Development Fund for agricultural programs and other line items.

Last year, more than $54 million was diverted from the fund, but a spokesman for the industry group says this year’s plan is not an improvement, because revenues to the fund are on the decline.

The money in the fund is generated from slots gaming at casinos with racetracks.
Revenues are down due to competition from racetracks in other states as well as competition from other casinos without horse racing.

The Corbett administration is expecting the fund to collect more than 300 million dollars by the end of the fiscal year in July, but the spokesman for the PA Equine Coalition says it’ll be lucky if the fund has 266 million dollars by then.

http://www.witf.org/state-house-sound-bites/2013/02/horseracing-group-says-budget-takes-too-much-money.php