Leap Year Blamed For Four Percent Pennsylvania Slots Revenue Drop

[toc]February revenue figures from the Pennsylvania Gaming Control Board (PGCB) show that slots revenues from the 12 licensed casinos fell by just under four percent.

The experience of each casino varied widely. At the negative end of the scale, Harrah’s Philadelphia Casino and Racetrack saw revenues down by 10.8 percent, while the Lady Luck Casino in Nemacolin managed to grow its admittedly smaller revenues by a more impressive 19 percent.

Gross revenues came in at $192.3 million compared to the $200.2 million recorded in 2016. The PGCB explained the total was negatively impacted by the fact 2016 was a leap year, with February having 29 days.

Mathematically, the extra day should make a difference of around 3.5 percent, all other things being equal, so the explanation rings true.

In effect, revenues are the same as 2016 and that isn’t good news for Pennsylvania’s state treasury. Revenue growth was strong from 2006, but has stalled since 2012.

Flat PA casino revenues create a problem for fiscal policy

No change in revenues doesn’t sound like an exciting story, but the issue is becoming a problem. Between them, Pennsylvania’s casinos employ 18,000 people and pump approximately $1.4 billion in tax revenue from slot machine and table games into the state government’s budget each year.

Pennsylvania needs revenues to grow as fast as government spending, and that’s becoming a political motivator for changes in legislation.

Sometime in 2017 the Board will be authorized to issue a new hotel resort license, which will add up to 600 new slot machines to the state’s total.

Adding extra machines should help drive revenues a little higher, but in the absence of any other obvious growth drivers, increased gaming tax revenues are only likely to come from more drastic measures.

Online gaming legislation offers a solution for Pennsylvania

At a hearing on March 7, a few days ago, state legislators in both houses heard evidence about online gaming.

The PGCB is in favor of the legislation proposed in HB 392, which was presented a month ago, and SB 477, which was submitted at the beginning of this week.

Politicians and the casinos remain divided on the issue, but hopes are high that at some point in 2017, something will manage to pass the political process and authorize state-licensed online gaming.

New Senate Community, Economic And Recreational Development Committee (CERD) Chairman Mario Scavello told CDC Gaming Reports:

“Sometime in March, we’ll have something done and passed in the House and Senate.”

His optimism is welcome, but last year’s efforts failed to meet with enough support, and divisions on the issue remain this year despite the budgetary advantages that legalization would provide.

Detailed Pennsylvania slot revenues for February by casino