Inflation can impact a casino in many ways, from the cost of manufacturing and delivering slot machines to the food sold in the food court. How much have distributors passed these rising costs down to Pennsylvania casinos, and how is it impacting casino customers?
Rising costs, inflation at Pennsylvania casinos
Justin Moore, General Manager for Rivers Casino Philadelphia, said distributors have passed many of their rising costs on to the gaming facility.
“Supply chain disruptions have equated to rising costs on individual items, parts for repairs, and backlogs in production due to labor shortages,” said Moore. The rising costs of manufacturing slot machines have had no impact on guests at Rivers Casino Philadelphia. We’ve experienced occasional delays in the arrival of new slot machines.”
Moore said due to increased food prices they continue to update menu selections and pricing based on the daily fluctuation in meats and dairy product costs.
Sean Sullivan, general manager at Live! Casino Pittsburgh, added that like all businesses, they have experienced increased costs.
“However, we remain focused on providing our guests with an affordable and memorable entertainment experience,”
Valley Forge Casino and Live! Casino Philly declined to comment for this story.
Supply chain issues a big concern for gaming execs
The American Gaming Association CEO Outlook Index surveyed gaming executives’ top concerns.
Here’s how they responded:
- 75%: supply chain issues
- 63% interest rate concerns
- 54%: labor shortages
Parx Casino has seen a drop in slot play, not tables
Casino Update host Tino Magnatta interviewed Marc Oppenheimer, CMO of Parx Casino. This time last year, Oppenheimer said it was “absolute peak business” for the Bensalem casino. Now, they are starting to see the impact of inflation. Parx isn’t necessarily seeing a drop in visitors, but they notice less mid-week spending, especially at the slots.
“The core slot player who is a little older still wants the entertainment but they aren’t spending as much when they come in.”
In terms of percentages, Oppenheimer said Parx is down 5-7% for slot revenue and they have seen spend-per–trip for some players decrease 20-25%.
Parx has not seen any issues on the table game side of their business.
“Table games tend to be a more VIP revenue-driven business, a younger clientele,” said Oppenheimer. “Those are people that aren’t impacted as much by this.”
Of 14 Pennsylvania casinos that were also open in April 2021, six saw retail slot revenue decrease YoY. Six also had declines in table games revenue. Parx saw declines in both with slot revenue down 4.8% and table games revenue down just 2.4%.
Pennsylvania casinos good bet for close travel
Since Pennsylvania is filled with mostly “commuter casinos” that are easy for many in the state to drive to, they may benefit from increased business from local residents. With rising costs, residents may be more inclined not to travel long distances to gamble. Occupancies may likely be up at casinos that have hotels.
Lead image by Katie Kohler