Citing Increased Competition and Decreased Revenue, Harrah’s Philadelphia Approved to Remove 563 Slots

Posted By Kevin Shelly on July 7, 2021

Harrah’s Philadelphia Casino is coming up on its 15th anniversary this fall while breezing through the relicensing process and sharply reducing its slot machine count.

The Pennsylvania Gaming Control Board recently signed off on Harrah’s plan to remove underperforming machines and reconfigure the gaming floor to create better flow and spacing.

“We believe this reduction will be a great improvement to the customer experience at our property,” said Chris Albrecht, SVP and General Manager of Harrah’s Philadelphia during a presentation before the PGCB.

The reduction also reflects the greater competition in the regional casino marketplace with five casinos now in Greater Philadelphia – Live! Philadelphia, Rivers Philadelphia, Parx Casino, Valley Forge Casino – in addition to Harrah’s.

The removal and reconfiguration work is already underway.

Harrah’s Philadelphia removes slots and and reconfigures floor

Details of the ongoing work on the casino floor as outlined by Albrecht to the PGCB in a presentation:

  • Removal of 563 slots due to a “significant oversupply and underutilization of our existing slot machines”
  • Slot count going from 2,263 to 1,700
  • That is still a 372-unit increase over the post-Covid reopening count due to social distancing
  • Square footage of the gaming floor remains unchanged
  • No impact to table games or other gaming floor amenities
  • Layout designed for “a more comfortable gaming environment ” as pods of machines replace long rows of slots
  • No revenue loss anticipated
  • Likewise, no loss of tax revenue
  • Staffing levels will not change

The company also maintains a retail William Hill Sportsbook. The reconfiguration does not cover the racebook area adjoining the casino floor. Harrah’s parent company, Caesars, purchased William Hill, the British oddsmaker.

Albrecht said the machines selected for removal are “all fully owned units and some of the oldest and least profitable on the gaming floor.” They have an average age of 10.3 years.

The majority338 of 563 – of the machine removals are from smoking areas. That reduces the number of slots in smoking areas from 53.95% to 51.94%. Pennsylvania ended its universal masking order on June 28. As a result, most casinos in PA including Harrah’s allow smoking again.

Projections indicate the remaining 1,700 slot machines can adequately and comfortably handle peak occupancy periods. Even at their peak occupancy on March 2, 2019, at 9 p.m., 850 machines were still available to play.

Decline in slot revenue at Harrah’s Philadelphia Casinos

Albrecht displayed a graphic showing the gross terminal revenue has declined every year after the casino opened, going from nearly $333 million to just more than $196 million.

Harrah’s fiscal year gross slot revenue since 2015

 2015/2015 FY2016/2017 FY2017/2018 FY2018/20192020/2021 FY
(June not reported yet)
Gross Slot Revenue$215.1 million$200.7 million$196.2$136.1 million$131 million

He said the company had invested over $44 million in the past five years.

That includes:

  • $1.3 million spent to re-carpet the entire gaming floor (2017)
  • $1 million spent on new slot chairs (2018)
  • $2.5 million spent on leased units (2019)
  • $39.4 million in promotional play (2019)
  • And 120 new games added (2019-2020)

Increased gambling competition in the Greater Philadelphia area

Albrecht attributed the revenue attrition to regional gaming expansion.

Let’s take a look at how Harrah’s Philadelphia Casino’s slot revenue compared to their closest competitors in April 2021.

PA slot revenue April 2021

  • Parx Casino: $37.6 million (most in state for April)
  • Harrah’s Philadelphia: $13.1 million (6th out of 14 PA casinos)
  • Live! Casino Philadelphia: $12 million
  • Rivers Casino Philadelphia: $11.9 million
  • Valley Forge Casino: $8.3 million

The $700 million Live! Casino Philadelphia opened in Feb. 2021. It’s hard to say exactly how much of the Harrah’s lost slot revenue has gone to Live! which is about thirteen miles away or if the growth of PA online casinos cut into the slot revenue.

In May 2019, the month before online gambling  launched, Harrah’s slot revenue was about $17 million.

Harrah’s relicensing  hearing raised no issues

Albrecht repeated the floor reconfiguration plan last week at Harrah’s relicensing hearing, its third five-year renewal.

There were no sharp questions, more a proforma review. The casino got a glowing endorsement from Chester Mayor Thaddeus Kirkland and PA state Sen. John Kane.

Harrah’s history as a racino built on a reclaimed 64-acre brownfields site built on a shipbuilding site was touted. As was its engagement with the community, local charities and as an employer.

The track at Harrah’s was the first wagering site to go live as a result of 2004 PA casino legislation, running its first race in September of 2006. The casino followed, opening in January the following year.

Race Director Barry Brown told commissioners at the hearing that the track had its single best day ever during the Kentucky Derby on May 1. Harrah’s held a promotional event for the Kentucky Derby which returned to its traditional May date after being held in October in 2020.

He also said COVID restrictions grew the track’s internet horse wagering business and that has remained a growth area even with virus restrictions lifted.

Lead photo by Kevin Shelly. 

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Kevin Shelly

Kevin C. Shelly is an award-winning career journalist who has spent most of his career in South Jersey. He's the former assistant city editor of The Press of Atlantic City, where he covered the casino industry and Atlantic City government as a reporter. He was also an investigative, narrative enterprise, and features reporter for Gannett’s Courier-Post.

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