Pennsylvania has an unusual trend across four geographically diverse gaming properties: sharply reducing slot numbers.
If all the major reductions requested at the four separate properties so far this year are eventually granted by the Pennsylvania Gaming Control Board (PGCB), it will mean more than 1,200 fewer machines in play this year.
Reconfiguring machines on gaming floors is routine, often including removals, but only changes affecting more than 2% of a casino’s slots require a formal review and approval due to the potential for the state to lose tax revenue.
Not including virus-mandated shutdowns, this is the largest down-sizing of slot machines since gaming began nearly 15 years ago.
For now, the trend is confined to four of 14 PA casino properties:
- Harrah’s Philadelphia Casino
- Penn National’s Hollywood Casino in Grantville, north of Harrisburg
- Penn National’s The Meadows in Southwest PA
- Mount Airy Casino in the Poconos
Are PA casino slot reductions right-sizing, or something more?
Maybe we can call the anticipated changes the new gaming floor reality.
Perhaps something of a corrective response to the conclusion of the first wave of the COVID-19 closures and reductions imposed at casinos, plus the ongoing acceptance of PA online gambling options.
Online play boomed during shutdowns, and that continues even with play resumed on casino floors.
Could the proliferation of unlicensed machines across PA also be a factor in PA casinos slot reduction?
Pete Peterson, an advocate for horse racing in the Keystone State, with casinos that funnel about 10% of retail casino slot revenue to a fund that supports the racing business in the state, suggested the unchecked proliferation of unlicensed gaming machines across the state could also be a factor in the reduction.
Peterson said the potential loss of revenue for racing is “concerning.”
Slot downsizing began with Harrah’s in the crowded Philly gaming market
Harrah’s Philadelphia Casino went first, in part blaming a crowded Philadelphia market with its five properties.
Back in July, Harrah’s removed 563 slots. The total slot count went from 2,263 to 1,700.
They justified the reduction as addressing an oversupply of machines – at their property and in the Philly market. Harrah’s said they were culling underperforming older machines with an average age of 10.3 years. They are not expecting a lessening of revenue or staff. However, they predicted no loss of revenue, no decrease in taxes paid.
The gaming floor size at Harrah’s remains unchanged, allowing for better spacing and flow, with pods of machines replacing lines of machines.
For years, labor revenue at Harrah’s has trended down from $215.1 million in 2015 to just above $136 million in 2019, the last year before the pandemic.
Casinos slot revenue snapshot in the Philly market
Here is an April snapshot of slot revenue in the Philly area:
- Parx Casino: $37.6 million
- Harrah’s Philadelphia: $13.1 million
- Live! Casino Philadelphia: $12 million
- Rivers Casino Philadelphia: $11.9 million
- Valley Forge Casino: $8.3 million
Parx was tops in the state, Harrah’s sixth.
PA casinos reduction requests spread elsewhere across the state
But coming now are requests for reductions elsewhere.
- 191 machines at Penn National’s Hollywood Casino
- 317 machines at The Meadows, also owned by Penn
- 132 machines at Mount Airy
If all requested reductions are granted, it will mean 1,203 fewer retail slot machines in PA casinos.
Penn wants to retool the floor in Grantville to fit a large Barstool Sports operation
Penn told regulators the reductions sought are unrelated to the opening of Hollywood Casino York, a mini-casino with 510 slot machines which opened in mid-August, making it the 15th gambling house in the state.
Nor to the projected end-of-the-year opening of Hollywood Casino Morgantown, which could add another 750 machines to the state’s inventory.
Ironically, July was a record month for retail casinos, with the slot revenue hitting its 4th greatest total ever.
Retail slot revenue this past July was more than $222.8 million, a more than 35% boost from the virus-impacted slot revenue from the year before at $165 million.
But slot revenue at Harrah’s this July was down more than 26%, coming in at $13.4 million, well below last July’s $18.1 million.
Other properties saw July increases in slot revenue, though Mount Airy was up just an anemic 1.58% to $15.3 million.
Lead image credit: AP Photo/Rob Carr