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Presque Isle Downs and Casino’s manager says the property is starting to feel the effects of competition from untaxed Pennsylvania skill games. Casino general manager Gary Hendricks says it makes him fear for the long-term sustainability of the property. Other casinos in the state have also complained about the games and blamed them for reduced demand and the removal of some slot machines from their gaming floors.
Presque Isle Downs had brought up the issue of skill games in December, saying it would accept their presence if they were taxed appropriately, stressing the need for a “level field.” The machines operate in an unregulated gray area, having been found by state courts not to constitute gambling because of their skill element. State lawmakers have been at an impasse over whether to formally regulate or outlaw the machines, and casinos say that the longer that situation continues, the worse the harm to their industry becomes.
There are no immediate indications that Presque Isle Downs is close to closing, despite Hendricks’ stated worries about its future. However, if it were to shut down, it would have a knock-on effect on Pennsylvania online casinos since it would leave bet365 without a land-based partner.
Most online operators in Pennsylvania can operate only through a market access agreement with a retail casino. The only exception is Golden Nugget, which is able to operate as a qualified gaming entity thanks to its retail presence in New Jersey. As an online-only company, bet365 lacks that option.
Why Presque Isle Downs is struggling
Under Pennsylvania law, slot machines at retail casinos are taxed at 54%. After revenue sharing with the Erie County Gaming Revenue Authority, Hendricks explained that tax is actually 64%.
Skill games are not contributing to tax revenue to the state as of now. Hendricks told YourErie.com the decrease in business since skill machines have been expanding:
“New Year’s Eve, busiest day of the year for us. I still have about 500 games that won’t get played, because that’s how far the demand has dropped off with all these other games on the market.
“And of course, they’re not paying, currently, a gaming tax. We pay a gaming tax, which is one of the highest in the country, is the highest in the country.”
Since 2019, the casino has eliminated 250 jobs. Presque Isle is attempting to save money in different ways, which includes closing table games overnight and limiting food options.
However, it is required, as a Category 1 casino, to have a minimum of 1,500 slot machines and horse racing. The property is hamstrung in that regard, as Hendricks commented on the future of the business:
“We’re concerned today about the long-term sustainability of the property.“
Hendricks has reached out to lawmakers for help, but hasn’t received much. Erie’s House Delegation commented to YourErie.com, stating that it is “committed to keeping Presque Isle open.”
What happens to bet365 if Presque Isle closes?
There is no indication Presque Isle Downs is closing anytime soon. However, the future seems to be murky. Closing the casino would have an instant impact on the online gambling vertical.
The Pennsylvania Gaming Control Board‘s (PGCB) Director of Communications, Doug Harbach, did not address the speculation of the property closing. He did, though, comment to PlayPennsylvania on protocols online platforms must abide by in order to operate legally in the state:
“Unless the license was obtained as Qualified Gaming Entity, then an operator must be affiliated with a licensed casino. Unlike sports wagering where a casino can only have one operator affiliation, casinos can have multiple agreements with those offering casino-type games online.”
Should Presque Isle Downs close in any way, bet365 would need to partner with another land-based property in the state.
