PA Slots Revenue Peaks As Sportsbooks Open — Connection Or Coincidence?

Casino slots revenue in Pennsylvania is on the rise. How big a role has the addition of sports betting played?

Fact One: A 3.4% increase in slots revenue by Pennsylvania’s 12 casinos in November from the same month in 2018 marked the best improvement of any month this year.

Fact Two: November was the first full month in which 10 of the casinos had retail sportsbooks open.

Question: Is there any connection?

On one hand, casino executives like to say that while direct revenue from sports betting is meager compared to other forms of gambling, it attracts many first-time visitors and boosts revenue throughout the property.

On the other, sports betting offers a far different kind of appeal to gamblers than do slot machines, and many things affect year-to-year revenue fluctuations. Among them are other changes to the casino floor, marketing, weather, and something so simple but unavoidable as how the calendar falls.

Sportsbook was one of many things helping Mohegan Sun

Those latter factors were likely a lot more important than the Sept. 24 opening of its sportsbook in spurring Mohegan Sun Pocono’s 7.9% boost in November slots revenue, said David Parfrey, the property’s vice president of marketing. As with the state overall, it was the best monthly uptick of 2019 for Mohegan Sun Pocono.

“There is a little bit of crossover from slots players, but not nearly enough to justify a statement saying the year-over-year increase in November was attributable to the sportsbook,” Parfrey said.

He pointed out that instead of heading over to slot machines, sports bettors are more likely to enjoy table games. Like sports wagers, those represent more group camaraderie and active involvement in decision-making than pushing a button on a machine.

The Pennsylvania Gaming Control Board won’t publish November table games revenue figures until next week, but in October, when the most recent of the brick-and-mortar sportsbooks opened at the Meadows Racetrack & Casino, the state’s industry saw a collective 10% rise in table games earnings.

Again, that marked the best improvement of 2019, and Parfrey — while declining to divulge specifics ahead of the gaming board’s public release — said Mohegan Sun saw a November table games increase on top of a 19% jump in October.

At the same time, Parfrey noted the casino has become more strategic with its marketing and made other changes, including relocating and replacing slot machines to get maximum play from them.

November’s calendar, weather likely assisted

The month of November, he noted, had no severe pre-winter storms like one in 2018 that reduced visitation for several days. Unlike most months, this year’s November also had five Saturdays, casinos’ busiest day of the week. Parfrey suggested casinos across the state may have also benefited from having the Thanksgiving holiday fall later in the month this year, delaying patrons’ focus on Christmas preparations.

“There’s no one silver bullet — it’s many things working together” that he said can create revenue jumps like those recently experienced by the state and Mohegan Sun.

The thing is, while casinos do their best to evaluate the revenue impact of various changes, it’s hard to precisely measure the value of a sportsbook beyond the wins and losses at the betting windows and kiosks. They just know it helps elsewhere.

“I couldn’t quote you exact numbers, but I can tell you my table revenue, my slots revenue, and my food and beverage revenue are up,” Bill Keena, general manager of Pittsburgh’s Rivers Casino, said when its expanded sportsbook opened Sept. 30. “Just from the pure excitement it adds, it takes us to another level on the whole casino floor.”

The Rivers, which debuted its temporary sportsbook last December, has seen its slots revenue increase every month this year and its table games figures improve in all but two months, but the sportsbook is just one of numerous changes that could have contributed to such success.

Officials from Cordish Gaming Group played up their own estimates of the impact of sportsbooks when appearing before the gaming board Oct. 30 to promote applications for sports betting at future Philadelphia and Westmoreland County projects under the Live! casino brand.

They presented figures describing combined slots/tables revenue increases anywhere from 1% to 14% that had occurred at six casinos where sportsbooks opened between November 2018 and July 2019.

“From the actual revenue generation directly from sports betting, it’s minimal, but we really look at it from — particularly from the retail standpoint — as the ability to drive a new customer base into the casino,” said Cordish CEO Joseph Weinberg.

There was a little cherry-picking taking place, however, in that Cordish presented no figures relating to Harrah’s Philadelphia, which debuted a sportsbook in January and has experienced improvement in slots revenue in only two months since then and in table games in five of the months.

It’s tough to grow these days — every addition helps

Growing gambling revenue, period, has been tough in the casino industry in both Pennsylvania and across the country in recent years, considering saturation within many states and new competition from adjacent states.

There’s a school of thought that anything a casino can provide as a new option thus helps. If sports bettors are attracted who don’t play slot machines themselves, they might bring with them a partner who enjoys the slots and wouldn’t be there to do so if not for the sports enthusiast.

“The idea is to get people in the building with money in their pocket … and a sportsbook can create a lot of energy in the casino,” said Richard Schuetz, a gaming consultant in suburban Harrisburg who has managed casinos both with and without sportsbooks.

“The rising tide lifts all boats,” he said, especially when a sports bettor is successful and is thus inclined to spend his money elsewhere on the property. “When you run a casino, one of the nicest things you can have working for you is the guy who wins at your book. There’s nothing like having people in the casino with money in their pocket who feel lucky and smart.”

If Pennsylvania’s gaming industry replicates Nevada’s, sports betting will end up representing less than 3% of the overall take from gambling and will only be about 1/25 as valuable, directly, as the slot machines.

But indirectly? It’s apparently worth a lot more — just a little hard to know how much.


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