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Casinos in the Pennsylvania will be paying more tax for its winnings on tables games from now on. The change for table games As part of a revenue package approved by the legislature and signed by Gov. Tom Wolf earlier this month, the tax rate will increase on table-game revenue for Pennsylvania’s casinos. The rate will go from 14 percent to 16 percent; that increase is expected to generate an additional $17 million for the commonwealth. That’s a relatively small amount in a budget that totals more than $30 billion. But lawmakers were creating a patchwork of revenue-generating measures that would make up the $1 billion shortfall between a spending package and revenue currently used to fund the government. The table games tax rate was not a part of an earlier gambling expansion package passed by the House. Impact on online gambling? Meanwhile, the chances of legal Pennsylvania online casinos and poker rooms is looking good. As part of budget negotiations, $100 million is being counted on from gambling expansions in the state. The bulk of that is expected to come from licensing fees and taxation of online gambling, from a bill that has not yet been passed. The scope and language of the gambling expansion is not yet finalized, but it’s expected to come up this fall, as soon as September. According to Online Poker Report, the $17 million increase in taxes on table games should not affect whether online gambling is considered this fall. Who gets hurt by the table games tax? Every casino is going to feel the pinch, to some extent. They will all be paying more to the state coffers, unless they have a particularly poor or bad run for the fiscal year in paying out casino guests. According to the Morning Call, it will cost Sands Bethlehem more than $4 million, meaning it will get hit the worst of any PA casino. That’s borne out in the PA gaming revenue numbers for the fiscal year that were just released. Sands generated $228 million on table games for FY 2015-16, more than $70 million more than second-place Parx. Sands wasn’t terribly pleased with the increased tax, according to the Morning Call: Like Juliano implies, the tax rate is not a killer for casinos, it just eats into its profits. But, it’s the new reality that PA gaming facilities must deal with.

Pennsylvania’s casinos generated more revenue during the 2015/2016 fiscal year than in any previous fiscal year, according to data recently released by the Pennsylvania Gaming Control Board. According to the PGCB, total revenue (slot machines and table games) was up 3.6 percent, as the state’s 12 casinos generated a total of $3,227,835,876 between July 1, 2015 and June 30, 2016. The breakdown for slot revenue and table game revenue during FY2015/2016 is as follows:
Total slot revenue: $2,388,658,549
Total table game revenue: $839,177,086 Table game revenue hit an all-time high in FY2015/2016. (Pennsylvania first legalized table games in 2010). On the other hand, slot revenue was up year-over-year, but fell short of the high-water mark set in FY2011/2012, when Pennsylvania’s casinos tallied $2,476,775,317 in slot revenue. The strong FY numbers took some of the attention away from the slightly disappointing June numbers the industry posted. For the first time since August of 2015, Pennsylvania’s casino industry saw year-over-year revenue dip, ending a nine-month streak of YoY growth. The good news is, it wasn’t a bad month by any stretch of the imagination. The industry experienced just a 0.2 percent decline in June of 2016 compared to June 2015, as table game revenue rose, while slot revenue dipped. For the month of June, the state’s casinos saw table game revenue rise 2.15 percent in June, while slot revenue was down 1.08 percent, year-over-year. A look inside the YTD revenue numbers Here is a look at the monthly year-to-date revenue tally for Pennsylvania’s casinos:
January 2016 GGR -$255,905,078 (+3.6%)
February 2016 GGR – $268,354,231 (+8.6%)
March 2016 GGR – $289,167,505 (+4.2%)
April 2016 GGR – $281,206,497 (+3.9%)
May 2016 GGR – $280,194,999 (+.80%)
June 2016 GGR – $258,423,105 (-0.2%) Historical look at casino revenue in Pennsylvania
2006: $31,567,926
2007: $1,039,030,723
2008: $1,615,565,758
2009: $1,964,570,480
2010: $2,486,408,061 (table games introduced)
2011: $3,024,772,959
2012: $3,158,317,863
2013: $3,113,928,591
2014: $3,069,077,597
2015: $3,173,787,012 A casino by casino look at the numbers Sands Bethlehem
Slot revenue, June 2016: $24,063,352.40 (+0.74%)
Table game revenue, June 2016: $19,093,476 (+8.84%) After watching Parx dominate for seven straight months, Sands Bethlehem is once again flexing its muscle. For the second consecutive month, Sands is at the top of the revenue charts in Pennsylvania. Sands posted year-over-year increases in slot and table game revenue in June, allowing the casino to maintain a slight edge over its chief rival Parx. Parx Casino
Slot revenue, June 2016: $30,882,060.44 (+2.45%)
Table game revenue, June 2016: $12,222,406 (-2.34%) Parx’s slot revenue saw solid year-over-year growth on the strength of a solid increase in handle. But a slight decline in table-game revenue kept the casino from overtaking Sands as the top revenue-generating casino for the month. SugarHouse Casino
Slot revenue, June 2016: $14,925,512.77 (+8.61%)
Table game revenue, June 2016: $10,145,531 (+17.42%) Proving that their lengthy, and costly expansion project was worth it, the growth trend for SugarHouse continued in June, as the Philadelphia-based casino posted significant year-over-year gains in slot and table game revenue. Rivers Casino
Slot revenue, June 2016: $20,834,516.12 (-8.56%)
Table game revenue, June 2016: $5,384,393 (-2.53%) SugarHouse’s sister casino, Rivers Casino in Pittsburgh, followed up a bad showing in May with an even worse showing in June. Slot revenue was down a whopping 8.5 percent in June, overshadowing the 2.5 percent decline the casino’s table games suffered. Harrah’s Philadelphia
Slot revenue, June 2016: $16,480,445.85 (-5.32%)
Table game revenue, June 2016: $5,145,051 (-2.31%) With SugarHouse on the ascent, nearby Harrah’s continues to be one of the hardest hit casinos. Harrah’s revenue continued to slide in June, as its parent company is fighting through bankruptcy restructuring. It’s unlikely the casino will be able to invest in the marketing and promotional campaigns needed if it plans on turning around its fortunes in the coming months. Mohegan Sun at Pocono Downs
Slot revenue, June 2016: $17,583,006.14 (-0.39%)
Table game revenue, June 2016: $3,635,374 (-1.17%) In a down month for the industry, Mohegan Sun will probably be pretty happy with its relatively stagnant June numbers. Mohegan Sun managed to hold steady, as slot and table game revenue ticked down ever so slightly. Mount Airy Casino Resort
Slot revenue, June 2016: $11,670,701.54 (+1.34%)
Table game revenue, June 2016: $3,074,252 (-12.24%) The table game decline for Mount Airy was mitigated by a slight increase in slot revenue, resulting in just a small YoY decline in total casino revenue. Valley Forge Casino Resort
Slot revenue, June 2016: $6,063,468.05 (-4.40%)
Table game revenue, June 2016: $2,973,908 (-5.11%) Declining slot and table game revenue nearly caused Valley Forge to fall below the $10 million threshold in June; a threshold it has historically been on the wrong side of and only recently passed. The Meadows Casino
Slot revenue, June 2016: $17,891,657.66 (-1.52%)
Table game revenue, June 2016: $2,211,263 (-13.55%) Meadows Casino was one of many Pennsylvania casinos that saw both slot revenue and table game revenue decline in June. The others were Hollywood Casino, Valley Forge Casino, Mohegan Sun, Harrah’s Philadelphia, and Rivers Casino. Meadows, one of the top slot casinos in the state (the casino posted the fourth highest slot revenue total in the state in June), continues to lag behind its competitors when it comes to table games. Presque Isle Downs and Casino
Slot revenue, June 2016: $10,055,690.95 (-2.01%)
Table game revenue, June 2016: $1,374,560 (+18.21%) The 18 percent jump for Presque Isle in table-game revenue helped offset the casino’s two percent dip in slot revenue. Hollywood Casino at Penn National
Slot revenue, June 2016: $17,030,371.52 (-2.65%)
Table game revenue, June 2016: $2,620,670 (-13.24%) Another down month for Hollywood Casino saw total gaming revenue dip below the $20 million mark. By comparison, in June of 2015, Hollywood generated $20.5 million in total casino revenue. Lady Luck Casino Nemacolin
Slot revenue, June 2016: $2,495,907.00 (-6.23%)
Table game revenue, June 2016: $565,532 (22.45%) The state’s smallest casino had an up-and-down month, as slot revenue plummeted while table-game revenue soared. In the end, Lady Luck saw total casino revenue dip year-over-year.

In 2014, economic analysts Econsult Solutions presented a thorough forecast of online gaming’s potential impact in Pennsylvania. A year later, Online Poker Report’s Robert DellaFave offered an update to the predictions made by Econsult, adjusted to reflect the state’s current regulatory climate. Updated PA online gambling revenue estimates In its report, Econsult predicted the state would see $187 million in first-year online gaming revenue, with up to $307 million annually once the market reached maturity. Over a five year period, DellaFave’s analysis produced a best-case estimate of $210.7 million in online gaming revenue for the state, a worst-case figure of $149.2 million, and a base estimate of $175.6 million. But despite rigorous attention to detail from both DellaFave and Econsult, several variables remain for Pennsylvania which could potentially render obsolete even the most meticulously outlined predictions. Question marks remain Tax rates, a longstanding point of contention for online gaming in Pennsylvania, will continue to serve as a sticking point in negotiations, and could impact the overall performance of online gaming. Casinos, of course, would favor lower tax rates, and generally appear to support the rate of 15 percent proposed in Representative John Payne’s HB 649. This bill is the basis upon which DellaFave’s analysis was calibrated. While HB 649 appears to be a frontrunner among both lawmakers and casino brass, support is not unanimous. Payne’s online gaming bill is one of five currently circulating in Harrisburg, and other lawmakers have balked at the proposed 15 percent rate. Senator Sean Wiley, who plans to introduce online gaming legislation of his own, will seek to tax virtual casinos at a rate of 36 percent. SB 900, introduced last week and sponsored by Senator Kim Ward, would tax online casinos at a rate of 54 percent. Ward has said, however, that SB 900’s original language was merely a jumping-off point, portions of which have already been amended. Much of the bill remains subject to change, potentially including the proposed tax figure. At a committee hearing in Harrisburg last week, Senator Robert Tomlinson voiced concerns about taxing online casinos at a lower rate than their brick and mortar counterparts, calling it a “scary point.” If higher profit margins were to be found online, Tomlinson said, casinos in the state would be pushed to divest from live establishments. Difficult to compare PA and NJ Revenue figures from New Jersey, which has offered regulated online gaming for about a year and half, would seem to be an obvious comparison. But while New Jersey’s online gaming data are the best real-world tool available for Pennsylvania forecasters, one-to-one comparisons between the states are largely unreliable. Precluding this comparison, in part, are a number of key demographic differences. Pennsylvania’s unemployment rate, at 5.3 percent, is solidly below New Jersey’s 6.5 percent rate, and even below the national average of 5.5 percent. However, per capita income in New Jersey, the second-highest in the nation as of 2013, is significantly above that of Pennsylvania. Further frustrating possible comparisons between the states is an age disparity. Online gaming appeals more strongly to younger audiences, but median age in Pennsylvania is higher than that of New Jersey, which could translate to comparatively lower revenues for the former. For Pennsylvania casinos hoping to maximize value in the digital market, the spectre of ubiquitous online gaming opponent Sheldon Adelson looms. Notably absent from the New Jersey casino industry, Adelson and his Sands Bethlehem are poised to contest regulation in Pennsylvania however possible. While even Adelson may not be able to stop legalization entirely, Sands’ lobbying efforts could still delay the process, and possibly even influence language contained in future bills.

A fresh round of online gaming op-eds appeared last week on the pages of PennLive, the homepage of Harrisburg’s Pennsylvania Patriot-News. The two articles, respectively written by public relations executives Tony May and Charlie Gerow, argued starkly opposing viewpoints. May, a lobbyist for Harrisburg’s Triad Strategies, did not explicitly call for online gaming legislation to fail, but spoke critically of regulation. Gerow, of the Harrisburg-based public relations firm Quantum Communications, offered bullish optimism. Gerow’s Argument Possible alternative to higher taxes The issue of online poker comes at a crucial moment for Pennsylvania Governor Tom Wolf, who recently proposed a series of tax hikes despite promising lower taxes during his 2014 campaign. Experts have estimated that Pennsylvania will face a $1.2 billion budget deficit next year, and supporters of online gaming, such as Gerow, view the revenue stream as a means by which Wolf can bridge the gap without raising taxes. Gerow touted the $10.3 billion in Pennsylvania revenue since 2006, when casinos first began operating in the state. Land-based Pennsylvania casinos, all of whom principally support online gaming (with the exception of Sands Bethlehem), have also adopted that figure as a rhetorical centerpiece, and a number of executives mentioned it specifically at a State Senate committee hearing last week. Social ills exaggerated Fears of online gaming’s potentially dangerous social consequences were overemphasized, Gerow added. “The concerns about increased social pathologies are relatively easy to deal with, given the record of previously expanded gaming,” he wrote. “Most Pennsylvanians would prefer he find his spending money someplace other than their pockets,” Gerow’s column concluded. Gerow noted that he and May were once united in support for the expansion of Pennsylvania online gaming legislation, but the pair, who co-host a local public access television program, now appear to disagree on the issue. May’s Argument Lawmakers acting irrationally In his counterpoint, May invoked the gambler’s fallacy, personifying Pennsylvania lawmakers as a losing casino patron. May accused Pennsylvania lawmakers of succumbing to an irrational belief that its luck would differ from New Jersey, a neighboring state currently suffering from poor casino receipts. “Casinos are failing in Atlantic City,” he wrote. “New casinos are popping up in neighboring states and revenues at healthy casino operations are flattening out if not declining.” Shortsightedness of public support But given its voluntary nature, May said, gambling is typically viewed favorably by the voting public. Where citizens would otherwise oppose coercive or costly legislation, gaming offers consenting adults an opportunity, not a mandate, to spend. “Gaming expansions are de facto taxes on self-selected segments of the population,” he wrote, adding “the psychology of gaming is irrefutable.” May cited theories that a conspicuous consumption bubble would soon burst, causing widespread harm to the entertainment and hospitality industries. Oversaturation of the modern gaming landscape, he said, is evidence that such a tipping point approaches. “Daily numbers, instant games, mega multi-state jackpots, slots, table games, Keno, pari-mutuel betting and maybe widespread, legalized sports betting,” May wrote. “How big can it get?” The op-ed columns are the latest on the topic for PennLive, which last month published another pair of high-profile arguments both for and against online gaming. Blanche Lincoln, a Sheldon Adelson-backed lobbyist, said it would be a “fiscal loser” for the state, while Senators John Payne and Nick Kotick, sponsors of the online poker bill SB 900, argued in support of such legislation.

On the heels of a disappointing August, the Pennsylvania casino industry bounced back — to borrow a word from Donald Trump — bigly in September, with total casino revenue up nearly three percent year-over-year, and both slot handle and table game revenue posting YoY gains. The September rebound makes August’s decline look even more like an outlier, as total gross gaming revenue (GGR) has been up in seven of the nine months. The only other month where the industry posted a YoY decline was June, when total GGR was down just 0.2 percent. The September numbers September saw most casino post year-over-year gains, and of the four casinos that posted losses, three of the four were under two percent. The worst YoY loss was just -2.68 percent, posted by Rivers Casino. Two casino posted solid gains in September:
SugarHouse Casino: +12 percent
Parx Casino: +10 percent Here’s a look at the industry-wide breakdown of slot revenue and table game revenue in September:
September 2016 slot machine revenue: $192,150,329.51 (+2.43%)
September 2016 table game revenue: $68,787,147 (+4.35%) A look inside the YTD revenue numbers Here is a look at the monthly year-to-date revenue tally for Pennsylvania’s casinos:
January 2016 GGR -$255,905,078 (+3.6%)
February 2016 GGR – $268,354,231 (+8.6%)
March 2016 GGR – $289,167,505 (+4.2%)
April 2016 GGR – $281,206,497 (+3.9%)
May 2016 GGR – $280,194,999 (+.80%)
June 2016 GGR – $258,423,105 (-0.2%)
July 2016 GGR – $288,451,402 (+2.95%)
August 2016 GGR – $260,904,471 (-4.28%)
September 2016 GGR – $260,937,476 (+2.93%) Historical look at casino revenue in Pennsylvania Pennsylvania is on pace to blow past its previous high water mark, set last year when the state’s casinos tallied $3.17 billion.
2006: $31,567,926
2007: $1,039,030,723
2008: $1,615,565,758
2009: $1,964,570,480
2010: $2,486,408,061 (table games introduced)
2011: $3,024,772,959
2012: $3,158,317,863
2013: $3,113,928,591
2014: $3,069,077,597
2015: $3,173,787,012 A casino-by-casino look at the numbers Sands Bethlehem
Slot revenue, September 2016: $24,761,852.36 (-.55%)
Table game revenue, September 2016: $19,403,808 (+3.46%) After reclaiming the top spot from Parx Casino during the summer, Sands Bethlehem slot revenue dipped for the second consecutive month, allowing Parx to jump ahead of Sands as the highest revenue generator in the Pennsylvania casino industry for the second consecutive month. Sands is believed to be considering a $40 million table games expansion, but the project appears to be contingent on certain legislative actions not occurring. That would include a gaming reform bill that might see slot machines introduced at off-track-betting parlors in the state. Parx Casino
Slot revenue, September 2016: $31,812,334.95 (+6.05%)
Table game revenue, September 2016: $14,091,154 (+19.98%) September was a spectacular month for Parx Casino. With solid gains in slot (over 6 percent) and table game (nearly 20 percent) revenue, Parx maintained its lead over Sands Bethlehem. SugarHouse Casino
Slot revenue, September 2016: $14,475,186.66 (+11.37%)
Table game revenue, September 2016: $8,762,325 (+21.94%) SugarHouse continues to make gains across the board, and based on its current rate of growth, and the size of the facility following its expansion project, SugarHouse is likely to find itself competing with Sands and Parx for No. 1 in the not too distant future. The casino is still a ways off at the moment, but SugarHouse’s growth is showing no signs of slowing down, and with the launch of a New Jersey online casino, they could start seeing an extra several hundred thousand dollars of revenue coming in each month. Rivers Casino
Slot revenue, September 2016: $20,878,476.49 (-.54%)
Table game revenue, September 2016: $5,300,662 (-10.28%) Despite declines in both slot and table game revenue in September — only one of two casinos that was down on both counts, Lady Luck was the other — Rivers Casino is still the third highest grossing casino in the state. But the Rush Street-owned Rivers continues to lose ground to another Rush Street property, SugarHouse. If the current trends continue, SugarHouse should overtake Rivers sometime in 2017. Harrah’s Philadelphia
Slot revenue, September 2016: $16,582,481.25 (+1.42%)
Table game revenue, September 2016: $4,330,848 (-11.12%) It was good news/bad news for Harrah’s in September, with slot revenue ticking up by about 1.5 percent, while table game revenue dropped by over 11 percent. Mohegan Sun at Pocono Downs
Slot revenue, September 2016: $17,901,962.72 (+1.01%)
Table game revenue, September 2016: $3,630,620 (+16.94%) Mohegan Sun posted solid gains in September, as slot and table games revenue both grew significantly, particularly table games. Mount Airy Casino Resort
Slot revenue, September 2016: $12,069,155.59 (+3.85%)
Table game revenue, September 2016: $3,859,988 (-2.12%) Mount Airy stopped the bleeding on the table game front, as revenue was down just two percent in September. You may be wondering how a decline in what was a good month industry-wide is good news, but compare September’s small dip to the massive declines over the course of the summer and you’ll see why Mount Airy would be happy with a small decline. During the past three months, table game revenue was down 17 percent in June, 12 percent in July and 29 percent in August. Even more promising, Mount Airy’s slot revenue jumped by nearly four percent YoY. Valley Forge Casino Resort
Slot revenue, September 2016: $6,579,073.10 (+10.81%)
Table game revenue, September 2016: $2,428,132 (-20.34%) It was a tale of two months for Valley Forge as slot revenue was up by over 10 percent, and table game revenue was down by nearly twice that much. The Meadows Casino
Slot revenue, September 2016: $18,001,682.59 (+2.61%)
Table game revenue, September 2016: $2,036,221 (-16.27%) September was a pretty stable month for Meadows, as the casino’s slot revenue gains offset a significant drop-off on the table game side of the business. Presque Isle Downs and Casino
Slot revenue, September 2016: $9,874,109.80 (+.16%)
Table game revenue, September 2016: $1,648,283 (+53.69%) Presque Isle saw its slot revenue hold steady, but the casino managed to post a significant year-over-year increase thanks to table game revenue surging over 50 percent. Hollywood Casino at Penn National
Slot revenue, September 2016: $16,712,849.50 (-3.20%)
Table game revenue, September 2016: $2,977,838 (+6.07%) The Hollywood Casino trend of volatility continued in September, as slot revenue dropped off substantially, while table game revenue ticked up slightly. The Penn National property has been up and down all year, with little rhyme or reason to the ups and downs. Lady Luck Casino Nemacolin
Slot revenue, September 2016: $2,501,164.50 (-.42%)
Table game revenue, September 2016: $317,269 (-12.28%) The smallest casino in the state continues to struggle for market share. Lady Luck is also struggling with consistency, as the casino’s monthly revenue ebbs and flows seemingly at random.

Contents
1 The bad news for PA slot revenue
2 The recent past for PA slots
3 Some casinos hurt worse than others
4 More regional competition for PA casinos
5 PA online gambling an answer? The bad numbers for Pennsylvania slot machine revenue are officially a trend. The bad news for PA slot revenue Gross slot machine revenue for Pennsylvania’s 12 casinos down 2.4 percent in January of 2017 as compared to the same month in 2016. Revenue checked in at $180.3 million, a decrease from $184.8 million. Tax revenue collected in January was $95.8 million. That’s the fourth straight month in which revenue declined year over year, and the fifth out of the past six months. The recent past for PA slots Most months have brought bad news from PA’s casinos for slot machine revenue:
August: Down $9 million.
September: Up $5 million.
October: Down $6 million.
November: Down $8 million.
December: Down $12 million. That constitutes a trend that it’s not clear that Pennsylvania will break out of. Some casinos hurt worse than others While some individual casinos have been able to buck the trend and post flat or positive numbers, seven casinos saw their revenue dip in January. The biggest impact last month — and in most recent months — hit Harrah’s Philadelphia. Harrah’s saw slot revenue drop more than 10 percent, or just under two percent. Other casinos that saw noticeable drops included Mohegan Sun Pocono, The Meadows Casino and Mount Airy. Valley Forge and Lady Luck Nemacolin experienced increases of about seven percent. More regional competition for PA casinos The climate for PA casinos, especially those near the New York and Maryland borders, isn’t going to get any better in the short term.
MGM National Harbor opened near Washington, DC
Two of New York’s four commercial resort casinos are now open, with two more on the way. It all adds up to more regional competition that is likely to hurt the bottom line of the PA casino industry as a whole. PA online gambling an answer? The possibility of the state legalizing online gambling remains a viable option to help PA casinos moving forward. With slot machines apparently in continual decline, PA online casinos and poker rooms could help stem the tide. Online gambling helps the bottom line of casinos in terms of real revenue. It can also help casinos activate new patrons or connect with current and/or lapsed casino visitors.

Contents
1 The top-line November numbers
2 A look inside the YTD revenue numbers
2.1 Historical look at casino revenue in Pennsylvania
3 A casino-by-casino look at the numbers
3.1 Sands Bethlehem
3.2 Parx Casino
3.3 SugarHouse Casino
3.4 Rivers Casino
3.5 Harrah’s Philadelphia
3.6 Mohegan Sun at Pocono Downs
3.7 Mount Airy Casino Resort
3.8 Valley Forge Casino Resort
3.9 The Meadows Casino
3.10 Presque Isle Downs and Casino
3.11 Hollywood Casino at Penn National
3.12 Lady Luck Casino Nemacolin In honor of the latest Star Wars movie’s release this past weekend, I’ll sum up the most recent Pennsylvania casino revenue numbers with an Obi-Wan Kenobi paraphrase: November’s revenue were not the numbers they were looking for. The good news is table game revenue jumped an impressive seven percent year-over-year. The bad news is it still wasn’t enough to offset the more than four-percent decline in slot machine revenue. Still, it’s important to keep casino revenue in perspective, as the nearly $250 million tally in November all but guarantees 2016 will set a new revenue record — barring a blizzard that shuts down the state for a week or more. The top-line November numbers SugarHouse was the only casino to avoid the slot revenue decline, as the Philadelphia casino continued its remarkable 2016 with a six percent year-over-year increase in slot revenue. Coupled with SugarHouse’s 26.5 percent increase in table game revenue, the casino was the clear winner in November, as total gaming revenue was up nearly 14 percent. The only other casinos that posted YoY increases in November were market leaders Parx and Sands:
SugarHouse Casino: +13.95 %
Parx Casino: +5.06 %
Sands Bethlehem: +4.2 % Here’s a look at the industry-wide breakdown of slot revenue and table game revenue in October:
November 2016 slot machine revenue: $179,399,603.94 (-4.34 %)
November 2016 table game revenue: $70,237,664 (+7.1 %)
November 2016 total gaming revenue: $249,637,268 (-1.38 %) A look inside the YTD revenue numbers Here is a look at the monthly year-to-date revenue tally for Pennsylvania’s casinos:
January 2016 GGR -$255,905,078 (+3.6%)
February 2016 GGR – $268,354,231 (+8.6%)
March 2016 GGR – $289,167,505 (+4.2%)
April 2016 GGR – $281,206,497 (+3.9%)
May 2016 GGR – $280,194,999 (+.80%)
June 2016 GGR – $258,423,105 (-0.2%)
July 2016 GGR – $288,451,402 (+2.95%)
August 2016 GGR – $260,904,471 (-4.28%)
September 2016 GGR – $260,937,476 (+2.93%)
October 2016 GGR – $263,011,981 (-.91%)
November 2016 GGR – $249,637,268 (-1.38%) Historical look at casino revenue in Pennsylvania Pennsylvania is on pace to beat its previous high water mark, set last year when casinos tallied $3.17 billion. Through 11 months, the state’s casinos have tallied $2,957,120,713, guaranteeing it will eclipse $3 billion in total gaming revenue for the sixth consecutive year. Short of something unforeseen occurring, a new high-water mark will be set. A new revenue record also seems extremely likely, as the state’s 12 casinos would need to hit just $217 million in total gaming revenue to eclipse last year’s record setting tally of $3,173,787,012.
2006: $31,567,926
2007: $1,039,030,723
2008: $1,615,565,758
2009: $1,964,570,480
2010: $2,486,408,061 (table games introduced)
2011: $3,024,772,959
2012: $3,158,317,863
2013: $3,113,928,591
2014: $3,069,077,597
2015: $3,173,787,012 A casino-by-casino look at the numbers Sands Bethlehem
Slot revenue, November 2016: $23,927,676.61 (-1.17%)
Table game revenue, November 2016: $19,882,805 (+11.50%) Sands Bethlehem and Parx are generally following similar month-to-month trends, ebbing and flowing in unison. In November, both casinos saw slot revenue slide and table game revenue rise. But throughout most of the year, Parx’s declines have been a bit smaller and their gains a bit bigger. That explains Parx’ ascendence to the top of the monthly revenue charts in Pennsylvania for most of 2016. But Sands isn’t sitting on its hands, and with online gambling (a vertical Sands would likely have eschewed) facing an uncertain future in 2017, Sands’ proposed $40 million expansion project could be the push it needs to once again overtake Parx. Parx Casino
Slot revenue, November 2016: $29,973,170.46 (-.93%)
Table game revenue, November 2016: $14,381,739 (+20.20%) Parx continues to outpace Sands as the state’s top revenue generator (Parx’s streak at the top of the charts is now four months), but both properties continue to lose ground to SugarHouse, which has been narrowing the gap throughout 2016. Interestingly, it has come to light that Parx was against (or at the very least not in favor of) online gambling. Perhaps its hold on the top spot played a part in its lack of support for online gambling at the tail end of 2016? SugarHouse Casino
Slot revenue, November 2016: $14,098,741.33 (+6.22%)
Table game revenue, November 2016: $10,301,474 (+26.54%) Even when the industry has been down, SugarHouse has been able to buck the trend, as it did once again in November. SugarHouse is now less than a million dollars (about $600,000 to be more precise) away from taking over the third spot from Rivers, its sister casino in Pittsburgh. That is pretty impressive considering the gap was 10 times as wide a year ago, at more than $6 million. Rivers Casino
Slot revenue, November 2016: $19,787,513.66 (-9.46%)
Table game revenue, November 2016: $5,295,858 (-6.56%) Rivers’ revenue was down across the board in November. There is nothing remarkable in the casino’s dip in and of itself, as most casinos in the market suffered a similar fate. That being said, looking forward to 2017, Rivers is likely to lose its hold on the No. 3 spot to SugarHouse sooner rather than later. Harrah’s Philadelphia
Slot revenue, November 2016: $14,979,396.65 (-11.76%)
Table game revenue, November 2016: $4,735,526 (-13.44%) Harrah’s had a tough October, and November wasn’t any better. Following a 10 percent decline in slot revenue and an 18 percent drop in table game revenue in October, Harrah’s saw double digit declines in both areas once again in November. Slot revenue dropped almost 12 percent and table game revenue nearly 13.5 percent. In November 2015, Harrah’s was ahead of SugarHouse by about four percent; in 2016 SugarHouse is in front of Harrah’s by almost 20 percent. Mohegan Sun at Pocono Downs
Slot revenue, November 2016: $16,328,388.94 (-8.44%)
Table game revenue, November 2016: $2,868,969 (-15.68%) The story of November was drops in both table game revenue and slot machine revenue, and the Mohegan Sun numbers followed suit. Mount Airy Casino Resort
Slot revenue, November 2016: $10,507,043.13 (-4.91%)
Table game revenue, November 2016: $3,494,310 (-8.31%) After surviving the slot revenue declines that hit the industry in October (one of only three casinos that saw slot revenue rise last month), Mount Airy succumbed in November, as slot revenue was down nearly five percent. Valley Forge Casino Resort
Slot revenue, November 2016: $6,000,843.07 (-1.24%)
Table game revenue, November 2016: $2,495,262 (-11.60%) All things considered, Valley Forge had a decent November. Slot revenue was down just a percentage point, and even with a sharp drop in table game revenue, the casino’s total revenue was down less than five percent. The Meadows Casino
Slot revenue, November 2016: $16,929,802.45 (-6.19%)
Table game revenue, November 2016: $2,746,001 (+19.03%) Meadows had a disastrous month on the slot revenue front (the fourth worst drop in the industry), but the casino’s sharp uptick in table game revenue helped offset it, keeping Meadows’ YoY decline at just 3.33 percent. Presque Isle Downs and Casino
Slot revenue, November 2016: $8,796,250.13 (-2.57%)
Table game revenue, November 2016: $1,110,985 (-8.97%) Presque Isle revenue was down across the board, but the racino managed to limit the damage. Total gaming revenue dropped by 3.33 percent, making Presque Isle the fifth best performing casino in November. Hollywood Casino at Penn National
Slot revenue, November 2016: $15,889,807.33 (-4.11%)
Table game revenue, November 2016: $2,605,722 (+3.71%) Only SugarHouse, Parx and Sands had a better November than Hollywood Park. The casino mitigated its slot revenue decline with a slight uptick in table game revenue, which limited the damage and kept its YoY decline at just three percent. Lady Luck Casino Nemacolin
Slot revenue, November 2016: $2,180,970.18 (-7.85%)
Table game revenue, November 2016: $319,014 (-25.49%) Lady Luck was posting $3-million months earlier this year, but the small casino has fallen back once again, and revenue is back in the $2.5 million range heading into 2017.

Contents
1 How much PA rakes in
2 No signs of slowing on gambling tax revenue
3 More gambling expansions on the way? Pennsylvania leads the country in revenue from “sin taxes” and even surpasses Nevada in total tax revenue generated from gambling. How much PA rakes in The report on sin taxes came from the website HowMuch.net. On casino gambling taxation, only Nevada, considered the gaming capital of the U.S., outshone PA, according to the report: With racino tax revenue figured in, PA actually surpasses Nevada. More from HowMuch: Overall, Pennsylvania led all states with more than $2.7 billion in tax revenue from sin taxes, which includes state income from alcohol and tobacco products, as well as gambling. No signs of slowing on gambling tax revenue Pennsylvania, meanwhile, has seen its gambling industry continue to expand over the past year. April was the eighth straight month of record revenue for PA casinos and racinos, with nearly $1.1 billion in gross gaming revenue generated in the first four months of 2016. Parx led all casinos in April, as it has for many months. A recent study, however, cast doubt on whether gambling revenue will continue unabated for PA. More gambling expansions on the way? The revelation that PA is one of the states that makes the most money of off gambling comes against the backdrop of the state considering yet another gambling expansion. The wide-ranging measure could generate hundreds of millions for the state, with a great deal coming from a provision that would authorize PA online casinos. A vote on the gambling expansion had been planned for last week, but has been delayed for unknown reasons. The state has also eyed sports betting, if and when federal law allows states to offer wagering on athletic events. And regulation of the daily fantasy sports industry may also be on the way. The bottom line: There’s no sense that Pennsylvania has any desire to slow down on the gambling front. Image credit: Ritu Manoj Jethani / Shutterstock.com

Penn National Gaming, which operates the Hollywood Casino at Penn National Racecourse, came out in full support of online gaming expansion in Pennsylvania at a hearing in front of the House Gaming Oversight Committee on Wednesday. In addition to supporting iGaming expansion, Penn National’s Senior Vice President of Government Affairs, Eric Schippers, announced the company had created its own internal online gaming revenue estimates. Schippers said the company’s projections were based on other studies as well as lessons learned in New Jersey. According to Schippers, these estimates are largely driven by Chris Sheffield, Penn National’s new iGaming guru, whose official title is Head of Online Gaming. Sheffield was brought on board in January to help guide Penn National into the online space. Penn National’s estimates as relayed by Schippers were:
Year one: $250 million
Year two: $300 million
Year three and beyond: $350 million To many, Penn National is overestimating the potential of online gaming in Pennsylvania, but Schippers qualified the numbers by saying they are “aggressive” and do not include any “restrictor plates” that could be placed on the industry, such as having to sign up in-person at a brick and mortar casino. Even with these caveats, Penn National’s projections seem lofty. Econsult projections on PA online gambling In a 2013/2014 report created for the Pennsylvania legislature, Econsult Solutions was a bit more pessimistic with its online gaming revenue projections for the state. Econsult estimated year one online gaming revenue in Pennsylvania at $184 million, with revenue increasing to $307 million when the market fully matures. And it should be noted Econsult’s projections are considered high by other analysts. Using population as the sole metric (granted, not the best way to come up with revenue projections), Pennsylvania should generate roughly 30% more revenue than New Jersey. So even though Econsult’s $184 million projection seems timid (particularly when compared to Penn National’s), it’s still above the $160 million the state can expect to reap based on the industry’s experience in New Jersey. Are there reasons for optimism? There are several viable reasons Penn National’s projections are on the higher end, and as Schippers stressed at the hearing, these projections were made under the assumption that the industry launches and runs seamlessly. Two restrictor plates that will have to be removed for Pennsylvania to reach its full potential are:
Improved payment processing.
Learning the lessons from New Jersey and solving disconnects, inferior software, lack of customer awareness, and over-cautious geolocation constraints. Additionally, Penn National may also believe Pennsylvania’s larger population (about 30% over New Jersey) will create better liquidity for online poker sites and increase traffic exponentially. Two reasons for pessimism For Penn National’s projection of $250 million in year one to hold true, the state is going to have to significantly outperform New Jersey. This is a tall task considering New Jersey trumps Pennsylvania in two key economic metrics:
Disposable income per capita: NJ = $49,267; PA = $42,253 (even adjusted for cost of living NJ residents still have more disposable income)
Median household income: NJ = $67,458; PA = $50,228 Early New Jersey revenue projections were harmful While it may not seem like a big deal, as New Jersey discovered, aggressive revenue projections can have a negative impact on the industry. In fact, New Jersey’s impossible projections have been a major talking point for those seeking to ban online gambling, allowing them to call the industry a failure. Online gaming revenue totaled $123 million in New Jersey during its first full year. By itself this would be an acceptable tally. Unfortunately, the $123 million number looks paltry when it was held up to the early predictions:
Wells Fargo produced the most infamous projection in 2013 when it estimated the New Jersey market to be worth $650 to $850 million. This led to the New Jersey government estimating $1.2 billion, a number that was only off by a factor of 10.
In 2013 Morgan Stanley projected $541 million. Morgan Stanley later revised its estimates in May of 2014 to $203 million – which was still off by 75% – and down to $127 million in December of 2014.
A dated 2010 report by H2 Gambling Capital had the New Jersey market generating $410 million in revenue in year one.
In 2013 Gambling Data (a subsidiary of Gambling Compliance) estimated New Jersey’s year one revenue at $235 to $288 million.
Econsult’s projection for New Jersey was $266 million in 2013.
Eilers Research was the closest to the mark, with a projection of $226 million in 2013.
In two separate reports (one in 2013 and one in 2014) Fitch Ratings had New Jersey revenue between $200 to $300 million. Analysts have learned from these mistakes The good news is analysts have taken a number of lessons from New Jersey. With the closest projection off by over 100%, analysis of the Pennsylvania market has been far less adventurous and tempered. One example of this is Econsult’s projection for New Jersey (a state with a population of around 9 million) was $266 million, but roughly a year later its projection for Pennsylvania (a state with a population of nearly 13 million) was just $184 million. Final word Even though Penn National placed caveats on projections, its $250 million estimate will hopefully be the highest projection submitted. Based on New Jersey, Delaware, and Nevada, as well as ring-fenced markets in Europe, it’s unlikely Pennsylvania will approach $200 million in year one online gaming revenue, even if it’s smooth sailing from the get go.

Contents
1 The top line October numbers
2 The top line October numbers
3 A look inside the YTD revenue numbers
3.1 Historical look at casino revenue in Pennsylvania
4 A casino-by-casino look at the numbers
4.1 Sands Bethlehem
4.2 Parx Casino
4.3 SugarHouse Casino
4.4 Rivers Casino
4.5 Harrah’s Philadelphia
4.6 Mohegan Sun at Pocono Downs
4.7 Mount Airy Casino Resort
4.8 Valley Forge Casino Resort
4.9 The Meadows Casino
4.10 Presque Isle Downs and Casino
4.11 Hollywood Casino at Penn National
4.12 Lady Luck Casino Nemacolin For Pennsylvania casinos, October was a tale of two revenue streams. On the one hand, table game revenue jumped by five percent industry-wide. On the other hand, slot revenue at the state’s 12 casinos dropped by three percent. Taken together, total casino revenue was down less than one percent year-over-year for the month. October was only the third time Pennsylvania’s casino industry posted a YoY decline, and two of those months, October and June, saw revenue dip by less than one percent. September had been a month of solid growth. The top line October numbers For Pennsylvania casinos, October was a tale of two revenue streams. On the one hand, table game revenue jumped by five percent industry-wide. On the other hand, slot revenue at the state’s 12 casinos dropped by three percent. Taken together, total casino revenue was down less than one percent year-over-year for the month. October was only the third time Pennsylvania’s casino industry posted a YoY decline, and two of those months, October and June, saw revenue dip by less than one percent. The top line October numbers October revenue was relatively static at nine of the state’s casinos, ranging between -5.26 percent and +2.11 percent. The two Philadelphia area casinos, SugarHouse and Harrah’s, continued to move in opposite directions. SugarHouse’s total monthly revenue jumped almost 19 percent. Harrah’s experienced yet another month of double-digit revenue decline, as total revenue dropped by 11.5 percent year-over-year. Here were the three outliers in October:
SugarHouse Casino: +18.74 percent
Harrah’s: -11.52 percent
Lady Luck: -10.93 percent Here’s a look at the industry-wide breakdown of slot revenue and table game revenue in October:
October 2016 slot machine revenue: $191,850,596.41 (-3.04%)
October 2016 table game revenue: $71,161,384 (+5.35%) A look inside the YTD revenue numbers Here is a look at the monthly year-to-date revenue tally for Pennsylvania’s casinos:
January 2016 GGR -$255,905,078 (+3.6%)
February 2016 GGR – $268,354,231 (+8.6%)
March 2016 GGR – $289,167,505 (+4.2%)
April 2016 GGR – $281,206,497 (+3.9%)
May 2016 GGR – $280,194,999 (+.80%)
June 2016 GGR – $258,423,105 (-0.2%)
July 2016 GGR – $288,451,402 (+2.95%)
August 2016 GGR – $260,904,471 (-4.28%)
September 2016 GGR – $260,937,476 (+2.93%)
October 2016 GGR – $263,011,981 (-.91%) Historical look at casino revenue in Pennsylvania Pennsylvania is on pace to beat its previous high-water mark, set last year when the state’s casinos tallied $3.17 billion. Through 10 months, the state’s casinos have tallied $2,707,483,445. Historically, Pennsylvania can expect November and December to add $520 million or more to its tally.
2006: $31,567,926
2007: $1,039,030,723
2008: $1,615,565,758
2009: $1,964,570,480
2010: $2,486,408,061 (table games introduced)
2011: $3,024,772,959
2012: $3,158,317,863
2013: $3,113,928,591
2014: $3,069,077,597
2015: $3,173,787,012 A casino-by-casino look at the numbers Sands Bethlehem
Slot revenue, October 2016: $25,057,866.26 (+2.17%)
Table game revenue, October 2016: $16,828,699 (-10.34%) After out-pipping Parx for two months, Sands Bethlehem has fallen behind Parx as the top revenue-producing casino for the third consecutive month in October. More troubling for Sands is the amount by which Parx was able to outpace it in October, some $2.5 million. A lot of ground was ceded on the table game side, as Sands saw a 10-percent YoY drop, while Parx managed to post a five-percent increase. With the North Jersey casino referendum failing, and with online gambling legislation on hold until 2017, Sands is likely to forge ahead with an expansion project designed to bolster its already best-in-the-industry table game offerings. Parx Casino
Slot revenue, October 2016: $31,807,584.58 (+.98%)
Table game revenue, October 2016: $12,772,722 (+5.04%) Thanks to gains in both slot and table game revenue, Parx is once again the clear top dog in the market. One of the few casinos to post slot and table game revenue gains, Parx is no doubt very pleased with its October numbers. SugarHouse Casino
Slot revenue, October 2016: $14,926,311.14 (+5.22%)
Table game revenue, October 2016: $10,657,745 (+44.82%) What SugarHouse has done throughout 2016 is downright remarkable. The Philadelphia casino went all-in on an massive expansion project (completed earlier this year) that has propelled it up the revenue charts. SugarHouse is on the verge of overtaking Rivers Casino (a sister property owned by SugarHouse’s parent company Rush Street Gaming) as the third highest grossing casino in Pennsylvania, and is also within striking distance of Parx when it comes to table game revenue. If SugarHouse goes through with a planned second expansion project (which would, among other things, add a hotel), it will likely find itself challenging Parx and Sands. Rivers Casino
Slot revenue, October 2016: $21,632,607.36 (-5.05%)
Table game revenue, October 2016: $6,312,487 (+11.17%) The gap between Rivers and SugarHouse is closing, but Rivers still has a veritable monopoly on the Pittsburgh area, which should allow Rivers to keep pace. October was a good news/bad news month for Rivers. Slot revenue was down five percent YoY as table game revenue jumped more than 11 percent. Harrah’s Philadelphia
Slot revenue, October 2016: $16,857,930.53 (-9.24%)
Table game revenue, October 2016: $5,434,645 (-17.91%) It’s hard to envision Harrah’s having a worse October. Not only did its regional rivals see revenue jumps, but Harrah’s revenue was down significantly across the board, as the casino posted a near 10-percent decline in slot revenue and a staggering 18-percent drop in table game revenue. Mohegan Sun at Pocono Downs
Slot revenue, October 2016: $17,018,525.36 (-6.39%)
Table game revenue, October 2016: $4,603,835 (+20.29%) Like several other Pennsylvania casinos, Mohegan Sun saw slot revenue drop and table game revenue rise in October. Mount Airy Casino Resort
Slot revenue, October 2016: $11,647,663.22 (+.76%)
Table game revenue, October 2016: $3,782,901 (-1.56%) Mount Airy had a very even October. Slot and table game revenue fluctuated very little year-over-year, and Mount Airy was one of only a handful of casinos that could boast positive slot revenue for the month. Valley Forge Casino Resort
Slot revenue, October 2016: $6,374,220.05 (-2.72%)
Table game revenue, October 2016: $3,386,312 (+12.14%) Valley Forge followed the industry’s October trend, with slot revenue down and table game revenue on the ascent. The Meadows Casino
Slot revenue, October 2016: $18,023,978.85 (-6.86%)
Table game revenue, October 2016: $3,028,774 (+39.59%) Sensing a pattern yet? Meadows also saw slot revenue dip and table game revenue rise, but in this case, the table game gains were quite substantial, as YoY revenue was up nearly 40 percent. Presque Isle Downs and Casino
Slot revenue, October 2016: $9,405,960.82 (-5.41%)
Table game revenue, October 2016: $2,886,859 (+8.68%) Presque Isle was yet another casino with declining slot revenue and rising table game revenue. Even with nearly nine-percent YoY growth on the table game side of the ledger, Presque Isle was down significantly in total casino revenue. Hollywood Casino at Penn National
Slot revenue, October 2016: $16,795,712.74 (-7.30%)
Table game revenue, October 2016: $1,051,801 (+6.30%) Hollywood Casino had a bad month of slot machine handle, with revenue down more than seven percent YoY. Modest gains on the table game side helped mitigate the slot revenue decline. Lady Luck Casino Nemacolin
Slot revenue, October 2016: $2,302,235.50 (-11.34%)
Table game revenue, October 2016: $414,603 (-8.59%) Lady Luck wasn’t able to keep pace with its competitors in the market, as both table game and slot revenue fell significantly in October.