March was a great month for the Keystone State’s gaming industry, as the Pennsylvania Gaming Control Board has touted, but just how great depends on one’s perspective.
Yes, the record $462.7 million generated by all forms of gaming easily represented a new benchmark, including a monthly high for what operators earned from online casinos ($118.1 million). Another $30.4 million in taxable revenue from sports betting last month also reflected a strong performance for that gambling sector.
But what about the bread-and-butter staples of commercial gaming — the slot machines and table games designed to draw thousands upon thousands of people into venues every day, parting with their money in a way that may entertain them while sustaining some 15,000 jobs and contributing to nearly $2 billion in direct government taxes annually?
Parsing the brick-and-mortar success is more complicated, because while March’s table games revenue of $94.3 million was another all-time high and slots revenue of $214.7 million was in the Top 10 historically, those figures were achieved as a result of more casinos operating than was ever the case.
The $309 million in retail revenue last month came from 16 facilities. They had a strong month compared to March 2021, when the 14 properties then in operation posted a total of $270.7 million, but COVID restrictions such as sharply limited alcohol service that were in effect a year ago dampened patronage.
When just 12 casinos operated in March 2019 — the most apt month for comparison because COVID-19 arrived to shut down the industry in mid-March of 2020 — they combined for $309.1 million. That overall revenue figure is almost exactly the same three years later, but not a single casino that was in operation three years ago made as much from slots and table games last month as it did in 2019.
In fact, it took the $43.8 million in revenue this March from the four newer casinos — Live! Pittsburgh, Live! Philadelphia, Hollywood Casino York, and Hollywood Casino Morgantown — to make up for the 14.2% drop in earnings by the first 12 gaming venues in the state.
Each new casino cannibalizes from others
Of course, the very fact that those four new casinos have arrived since November 2020 is part of the reason the original operations are challenged to make as much as they once did. It’s known as cannibalization: There’s a finite amount of time and money that Pennsylvanians are willing to devote to casinos, and with each new opening, a sliver of patronage and revenue is claimed from the closest competitors.
The brick-and-mortar casinos have likely also felt the lingering impact of COVID on gamblers’ mindsets and been affected to some extent by the popularity of online casino games as a growing alternative to physical casino visitation. The wide availability of unregulated skill games in neighborhood outlets across the commonwealth has also been cited as an industry concern, and due to COVID, the casinos lack some of the same amenities — such as buffets — that were taken for granted as a customer draw before March 2020.
Whatever the cause, it has become clear that individual properties may have a hard time ever matching their pre-pandemic revenue in Pennsylvania.
In 2021, the 12 original casinos’ slots and tables revenue of $2.87 billion was 12.2% less than they made in 2019. As noted above, the decline in March 2022 compared to March 2019 was even sharper at 14.2%, despite there now being diminished public concern about COVID and removal of restrictions that had been related to it in the first half of 2021.
Parx keeps rising above the rest
Naturally, not all casinos have been impacted the same way from the various factors that can affect their visitation.
In the case of Parx, long the biggest revenue generator in the state, its $55.6 million in slots and table games income in March was off only 2.2% from 2019, in addition to being 4.2% higher than in March 2021. At the other extreme, the $15.5 million of Harrah’s Philadelphia (which is actually located outside Philadelphia in Delaware County) was down 38.2% from March 2019 and 6.7% from March 2021.
And then there’s the exceptional case of Hollywood Casino at Penn National, with its $17.1 million in March revenue that represented a 29% decline from 2019 and 14.1% decline from 2021. It was likely a victim of its own self-created cannibalization, in that, since last August, Penn National Gaming has opened two mini-casinos that are also part of the central Pennsylvania market.
Hollywood Casino York and Hollywood Casino Morgantown combined for $13 million in March revenue, and Penn National officials have indicated they view the three mid-state properties as a team where it doesn’t bother them if customers shift from one to another.
The table below shows the 16 present casinos ranked in March revenue from most to least, while also reflecting their changes since March 2021 and March 2019:
|Casino||March 2022 revenue||March 2021 revenue||% change 2021-22||March 2019 revenue||% change 2019-22|
|Parx||$55.6 million||$53.3 million||+4.2%||$56.8 million||-2.2%|
|Wind Creek||$45.5 million||$34.1 million||+33.3%||$50.9 million||-10.7%|
|Rivers Pittsburgh||$33.7 million||$27.5 million||+22.4%||$35.8 million||-5.9%|
|Rivers Philadelphia||$22.8 million||$19.8 million||+15.2%||$27.5 million||-17.3%|
|Live! Philadelphia||$20.9 million||$20 million||+4.5%||not open||not open|
|Mohegan Sun Pocono||$19.6 million||$18.6 million||+5.6%||$21.5 million||-9%|
|Hollywood Penn National||$17.1 million||$19.9 million||-14.1%||$24 million||-29%|
|Hollywood Meadows||$16.1 million||$14.7 million||+9.5%||$22.9 million||-29.8%|
|Harrah's Philadelphia||$15.5 million||$16.6 million||-6.7%||$25.1 million||-38.2%|
|Mount Airy||$14.7 million||$15.6 million||-5.6%||$16.4 million||-9.9%|
|Valley Forge||$12.5 million||$10.6 million||+17.6%||$13.2 million||-5%|
|Presque Isle Downs||$10.2 million||$9.7 million||+5%||$12.4 million||-17.7%|
|Live! Pittsburgh||$9.9 million||$8.3 million||+19.8%||not open||not open|
|Hollywood York||$7.7 million||not open||not open||not open||not open|
|Hollywood Morgantown||$5.3 million||not open||not open||not open||not open|
|Lady Luck Nemacolin||$2.1 million||$2 million||+3.5%||$2.8 million||-24%|
|Statewide||$309 million||$270.7 million||+14.1%||$309.1 million||unchanged|
Even if individual properties may struggle to match their pre-pandemic levels, their level of concern over it is likely diminished by reduced spending on their part in various ways, such as for smaller staffing levels. And for Pennsylvania officials who have come to rely on gaming revenue for tax support more than in any other state, their concern is not about individual property revenue but with the pack of them keeping pace, as they did in March while supplemented by all of the new online gaming revenue.
There are two additional wrinkles yet to come in the casino competition. A satellite mini-casino of Parx is slated to open in Shippensburg — also in the central part of the state — by year’s end, and another mini-casino is planned in the Penn State/State College area, although its timing is uncertain.
Those additions may erode some other individual casinos’ revenue, but as a whole, the industry will hold up just fine if March is any indication.
Photo courtesy of Penn National Gaming