The strong August gaming revenue picture in Pennsylvania, with its 4.2% increase from the year before to $425.4 million in total commercial industry earnings, disguised a potentially ominous month for the state’s brick-and-mortar casinos.
The revenue data released last week by the Pennsylvania Gaming Control Board showed that for the second straight month, the 16 casinos collected less slots and table revenue than in the same month a year ago. And the drop was even worse, down 5.5% in August 2022 from August 2021, after a 3% decrease comparing the two Julys.
The diminished statewide earnings have taken place even though there weren’t even 16 casinos in operation a year ago for equitable comparison. Hollywood Casino York opened as the 15th overall and the state’s second mini-casino in mid-August of 2021, while Hollywood Casino York only opened as the third mini-casino last December.
Prior to July, year-over-year casino revenue had been higher in every month of 2022 compared to 2021, including by double-digit increases each month from January through April.
The August 2022 data showed that gamblers were willing to spend more online, as iCasino revenue was up 20.9% to $107.2 million from $88.7 million in August 2021, and sports betting handle — the vast majority of it through digital wagering — was up 4% to $363 million.
But as to getting in a car and traveling to risk gambling funds in a summer era of high gas prices, rampant inflation, and other economic concerns, the public clearly felt more inhibited than in 2021.
A lot has changed in past year
One reason for the end of the high year-over-year increases that casinos had experienced earlier in 2022 is that in early 2021, they were still affected significantly by the COVID-19 pandemic — either through state restrictions on their operations or the public’s own concerns about health and safety in crowds. It was thus common for the casinos to draw larger crowds early this year compared to 2021. The first half of 2021 also did not see the same level of gas price hikes and inflation as has been the case this year.
This table shows the statewide slots and table games revenue in each month since January, with comparison to the year before:
| Month | 2022 PA casino revenue | 2021 PA casino revenue | % change | |
|---|---|---|---|---|
| August | $279.7 million | $296.1 million | -5.5% | |
| July | $300.6 million | $309.8 million | -3% | |
| June | $269.1 million | $260.6 million | +3.3% | |
| May | $294.3 million | $278.6 million | +5.6% | |
| April | $308.3 million | $279.2 million | +10.4% | |
| March | $309 million | $270.7 million | +14.1% | |
| February | $269.1 million | $203.3 million | +32.4% | |
| January | $246.7 million | $191.6 million | +28.8% |
With the exception of a somewhat higher level of increase in February compared to January, the year-over-year change has steadily eroded each month, leading to the negative comparisons of July and August.
It’s important to remember many factors can enter into changes in monthly revenue: how the calendar falls, the number of weekend days, weather, highway or casino renovations, competition from other casino markets, etc. In 2020 and 2021, many gamblers also had access to discretionary money from COVID relief payments extended to individuals by the federal government.
Some casinos, as well, have been reducing their number of slot machines to correct for over-saturation — the 25,595 in August 2022 was down from 26,017 a year earlier — but that is no explanation for the revenue drop. Statewide slots earnings last month were down only 4.1% from the year before, compared to a 9.1% drop for table games.
Without exception, casinos saw decline
There are always variations in the individual performance of casinos over time, as shifts take place in their operations and popularity. This August, however, every property that had also been in existence for a full month in August 2021 made less money than the year before. It was true from Erie to Philadelphia and from Pittsburgh to the Poconos.
It was true whether for the consistently largest revenue generator, Parx (down 7.6%), or the consistently smallest, Lady Luck Nemacolin (down 26.9%).
The following chart shows the revenue earned in August 2022 compared to August 2021 for the 14 venues fully operating both months, ranking them in terms of the size of their decrease.
| Casino | August 2022 revenue | August 2021 revenue | % decrease |
|---|---|---|---|
| Lady Luck Nemacolin | $1.7 million | $2.4 million | -26.9% |
| Rivers Philadelphia | $17.5 million | $20.7 million | -15.5% |
| Harrah's Philadelphia | $14 million | $16.5 million | -15% |
| Hollywood Penn National | $15.3 million | $17.7 million | -13.7% |
| Mohegan Sun Pocono | $17 million | $19.6 million | -12.7% |
| Presque Isle | $9.7 million | $10.7 million | -9% |
| Parx | $50.2 million | $54.3 million | -7.6% |
| Wind Creek Bethlehem | $41 million | $43.7 million | -6.3% |
| Live! Philadelphia | $18.5 million | $19.6 million | -5.8% |
| Rivers Pittsburgh | $28.7 million | $30.3 million | -5.4% |
| Hollywood Casino Meadows | $16.2 million | $17.1 million | -5.3% |
| Mount Airy | $17.5 million | $18.1 million | -3.2% |
| Live! Pittsburgh | $9.2 million | $9.4 million | -2% |
| Valley Forge | $11.3 million | $11.5 million | -1.5% |
While the numbers are disappointing, as the casinos’ ability to employ thousands of Pennsylvanians depends on people’s willingness to visit rather than play from home, they aren’t yet evidence of a troubled industry. The numbers don’t mean casinos have lost money the past two months, only that they aren’t making as much as they did the year before.
The state and local governments, meanwhile, received $175.3 million in tax money from the $425.5 million netted by operators in all types of commercial gaming in August. The gaming industry remains on pace to clear more than $5 billion in revenue in 2022 for the first time ever. With each month, however, it seems to become more stark that the growth stems from the public’s attraction to online gaming rather than making in-person visits.
Photo: Shutterstock
