In The Summer Heat, PA Casino Revenue Is Cooling Down

The entire country may have dealt with an unbearable heat wave in July, but, Pennsylvania’s casino industry was pretty frosty on the revenue front.

Total casino revenue for the state’s 12 casinos fell by 3.3 percent year-over-year, with significant declines in both slot and table game revenue.

Slot revenue was down 2.62 percent and table game revenue dropped nearly twice as far, as the industry posted a 5.18 percent decline according to the Pennsylvania Gaming Control Board’s (PGCB) reporting.

The slot decline was the industry’s first since February and the most significant since slot revenue fell 2.68 percent in May 2017.

The calendar may have been a major factor in the Y/Y decline. July 2017 had five weekends, whereas July 2018 only had four.

Top line numbers for July 2018

Here’s a look at the top line July numbers:

Slot machine revenue: $203,643,985.78 (-2.62 percent)
Table game revenue: $73,820,267 (-5.18 percent)
Total gaming revenue: $277,464,252 (-3.32 percent)

12-month slot revenue trend

Pennsylvania’s four-month streak of Y/Y slot revenue increases came to an end in July.

The last 12 months have seen seven months of slot revenue gains and five months of declines.

August 2017 slot machine revenue: $193,190,477.69 (-.39 percent)
September 2017 slot machine revenue: $195,396,966.03 (+1.69 percent)
October 2017 slot machine revenue: $189,527,493.24 (-1.21 percent)
November 2017 slot machine revenue: $181,329,655.27 (+1.08 percent)
December 2017 slot machine revenue: $187,614,378.63 (+1.22 percent)
January 2018 slot machine revenue: $177,795,127.32 (-1.39 percent)
February 2018 slot machine revenue: $189,056,194.76 (-1.67 percent)
March 2018 slot machine revenue: $221,350,220.10 (+5.41 percent)
April 2018 slot machine revenue: $206,178,527.52 (+.23 percent)
May 2018 slot machine revenue: $203,993,259.02 (+.37 percent)
June 2018 slot machine revenue: $197,763,672 (+4.9 percent)
July 2018 slot machine revenue: $203,643,985.78 (-2.62 percent)

A look at who was up and who was down in July

July may have been a down month for the industry writ large, but individually only seven of the state’s 12 casinos posted Y/Y declines.

That said, three of the five casinos that grew revenues did so by less than .5 percent. Four of the five saw revenues increase by less than 1.5 percent.

Only Valley Forge saw a meaningful increase, as total casino revenue grew by 7.44 percent in July.

Valley Forge Casino Resort: +7.44%
SugarHouse Casino: +1.49%
Presque Isle Downs and Casino: +.44%
Rivers Casino: +.41%
Parx Casino: +.20%

On the flipside, two of the seven casinos that experienced declining revenues in July were well into double figures, and six of the seven saw revenues decline by at least five percent.

Mount Airy Casino Resort: -13.62%
Mohegan Sun Pocono: -13.21%
Harrah’s Philadelphia: -9.17%
Lady Luck Casino Nemacolin: -8.57%
Hollywood Casino at Penn National Race Course: -7.00%
The Meadows Casino: -4.94%
Sands Casino Resort Bethlehem: -.33%

Market share and revenue comparisons

PA market analysis

Valley Forge bucks the industry-wide downswing

July wasn’t a huge gainer for Valley Forge, but it did mark the eighth Y/Y revenue increase since the state passed its gambling reform bill in October.

November 2017: +12.4 percent
December 2017: +6.4 percent
January 2018: +13.9 percent
February 2018: +15 percent
March 2018: +10.5 percent
April 2018: – 5.64 percent
May 2018: +25.18 percent
June 2018: +15.84 percent
July 2018: +7.44 percent

The new law allowed Valley Forge to remove the $10 amenity fee requirement by making a one-time payment of $1 million.

Based on the revenue numbers since the amenity fee requirement was removed, it seems like a very wise investment.

Online gambling and sports betting licenses update

After dragging their feet a bit, Pennsylvania casinos have begun applying for online gambling and sports betting licenses.

Thus far only Penn National has applied for a sports betting license, but the general sentiment is that once the first application was submitted, plenty of other casinos would follow.

On the other hand, 11 of the 13 casinos eligible for online gambling licenses have already submitted applications. Three of those casinos — Harrah’s, Mount Airy, and Parx — have already been approved.