Eight Months In, PA’s First Mini-Casino Could Be Evidence The Concept Will Succeed

GM of Live! Pittsburgh is bullish about potential success of four to follow it
Live! Pittsburgh mall sign

Eight months into Pennsylvania’s mini-casino era with a second one to open in two weeks, there’s at least one strong proponent of that particular aspect of the state’s broad gambling expansion law of 2017.

“I think it’s been great for Pennsylvania,” Sean Sullivan told Penn Bets in an interview this week.

Granted, Sullivan may be a bit biased. He is the general manager of Live! Pittsburgh, which opened in November at Westmoreland Mall, about 40 miles east of the city contained in the casino’s name. But Sullivan has worked in executive capacities at numerous casinos, including a primary western Pennsylvania competitor, the Meadows Racetrack & Casino. He knows success when he sees it, and the numbers don’t lie.

Despite numerous COVID-related restrictions on its operations in the first half of 2021, as with all Pennsylvania casinos, Live! generated $45.1 million in gaming revenue. For the past four months, it has been steadily around $8 million in winnings from 750 slots and 30 tables, and it is on pace to make nearly $100 million in its first full calendar year.

The Cordish Companies, owner of the mini-casino, said it spent $150 million on its development, including a $40.1 million auction bid.

“We’re in good shape and right on target with where we expected to be, and we know with repeat visits and growth in our customer data base we’ll become even stronger,” Sullivan said. “July [revenue] is going to be better than June’s, and as long as Mother Nature’s not throwing us any curveballs, we’re going to be healthy and strong and continue to improve.”

The first of five

The 2017 law that also legalized online casinos, sports betting, and truck stop VGTs allowed Pennsylvania the possibility of up to 10 mini-casinos, at a size about one-fourth to one-half that of most of the state’s casinos. Through a Pennsylvania Gaming Control Board auction bidding process, the market has determined only five such operations are viable. Live! became the first to open, using repurposed Bon-Ton department store space at the mall near Greensburg.

Penn National Gaming has announced that the second mini-casino, Hollywood Casino York, will open Aug. 12. Like the first mini-casino, it sits along busy U.S. Route 30 in a mall — the former Sears location at York Galleria — but nearly 200 miles to the east of Live!.

Another Penn National property, Hollywood Casino Morgantown, is nearing completion and should open in Berks County by year’s end. The two other mini-casinos, which are all known officially as Category 4 casinos, are still to be developed in Cumberland County by Parx Casino and the State College area in a partnership between Philadelphia businessman Ira Lubert and Bally’s Corp.

The mini-casinos’ gaming floor is capped at 750 slot machines and 30 tables, although they can expand to 40 tables after a year of operation. Sullivan said Cordish, the Baltimore-based firm which also opened the much bigger Live! Philadelphia as the state’s newest casino in January, will consider adding the 10 more tables in November.

By one measure, partially due to the constrained capacity, Live! Pittsburgh is among the most successful casinos in the state. Its slot machines’ win per day from customers in June averaged $301. The average among the 26,000-plus slots in the state was $226, and only Parx Casino had a higher average daily win of $376.

“When we have 750 and other casinos have 2,500, I don’t know if you could call it a fair and equitable metric,” Sullivan allowed, even if he is pleased with the revenue. “That number to us is an indicator that our guests are enjoying our slot machines — the various types and themes and denominations.”

He said if there weren’t restrictions on the number of machines or the size of the venue within the existing mall, the level of activity suggests to him Live! could accommodate nearly 1,000 machines.

“On the weekends right now, we’re pressed in terms of their availability,” he said. “Mid-week, we wouldn’t need them.”

Newcomer is impacting nearby casinos

Among the 14 casinos in the state, Live! Pittsburgh’s revenue exceeds only that of Lady Luck Nemacolin, a competitor in adjoining Fayette County, but the latter operates under its own constraints as a small “resort” casino with 600 slots and 26 tables.

Lady Luck, the Meadows, and Rivers Casino are all within 50 miles of Live! competing with one another in the Pittsburgh metropolitan area, and officials at the three older casinos have acknowledged the newcomer has had an impact on their own revenue. The mini-casinos were created with the idea that they would attract play from nearby gamblers happy to stay closer to home rather than driving farther to bigger destinations.

Across the state, the effects of COVID-19 on casinos operations have resulted in lower bricks-and-mortar revenue for them than was the case two years ago, but the southwestern Pennsylvania casinos have seen a bigger drop than elsewhere. It’s not just COVID, in their case — aside from any other potential factors, the presence of the new competitor is undoubtedly contributing.

Among the four casinos in the region, the collective gaming revenue totaled $51.5 million in June, or 3.6% less than the region’s total in June 2019. But deducting the Live! revenue, the three other casinos garnered just $43.3 million, or 19% less. Statewide, retail gaming revenue was 12.9% less for casinos in operation in both 2019 and 2021.

Here are the regional revenue comparisons between this June and June 2019 (the last fair comparable month, since the casinos were closed for much of June 2020):

CasinoJune '19 revenueJune '21 revenueChange
Live!$8.2 million
Rivers$30.3 million$26.9 million-11.2%
Meadows$20.6 million$14.4 million-30.3%
Lady Luck$2.6 million$2 million-21.3%
Region total$53.5 million$51.5 million-3.6%

Success can be measured beyond revenue

While pleased by the numbers, Sullivan said the mini-casino’s success should be measured by more than that. He stressed it is contributing charitable dollars to the local food bank and other organizations, boosting revenue for local government, providing nearly 500 jobs, and creating new entertainment options for the area.

On the second floor above the casino’s gaming area is an all-ages, non-gambling area for arcade games, bowling, a golf simulator, and more. In addition to restaurants and bar space, both floors provide a view of a 45-foot TV wall as part of the venue’s FanDuel retail sportsbook, which Sullivan said has been a popular attraction for major sporting events.

“I don’t like to reference us as a gambling destination. We’re an entertainment destination,” Sullivan said.

Cordish officials emphasized the facility had state-of-the-art filtration and health and safety protocols to address COVID concerns upon opening, and many of those remain in place, although most plexiglass barriers have been removed.

“The lion’s share are in the warehouse, hopefully never to be taken out again,” Sullivan said.

He’s hoping the casino is also done with capacity limits, social distancing, mask mandates, and restrictions on alcohol service and indoor smoking, all of which are assumed to have hindered visits and revenue in the first half of the year.

Even with those limits, Sullivan believes Live! has shown the mini-casino model can be a success, and the future should be only brighter, as opposed to an alternative often discussed in Harrisburg of adding more gambling in clubs and taverns.

“By working with the existing casino operators and creating the Category 4’s, you keep the same protections as the other casinos with all of the security and surveillance, you get all the new tax revenue, and you can be confident in their performance,” Sullivan said. “I think it’s a great solution and that the other ones will also do well. We’re testimony these properties can do extremely well.”

Photo: Gary Rotstein


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