(TNS) – Pennsylvania reported a record $ 432.5 million in gaming revenue in November, up 48% from pre-pandemic figures two years ago and the eighth consecutive month of high revenue after the widespread deployment of COVID-19 vaccines.
Almost all of the growth over the past two years has been in new forms of online gaming, including casino games like slots and blackjack, as well as sports betting. Online gaming and sports betting has been licensed under a 2017 extension of the Pennsylvania Gaming Act.
Retail revenues from physical casinos (slots, table games and in-house sports betting) have only increased 3.6% since November 2019. Four new casinos have opened in the past two years, so that the slightly larger incomes are now spread. among 16 properties, including three mini-casinos, compared to 12 active casinos in 2019.
The opening last year of Live! The Casino & Hotel Philadelphia in the city’s stadiums has apparently cannibalized customers at Harrah’s Philadelphia Casino & Racetrack in Chester, Rivers Casino in Philadelphia, and, to a lesser extent, Parx Casino in Bensalem.
Across Pennsylvania, slot machine revenue is down 2% from two years ago. But at Harrah’s, slot machine revenue is down 32% from November 2019, and at Rivers Philadelphia, slot machine revenue is down almost 28%. At Parx, slot machine revenues are down 9% from November 2019.
Revenues from table games such as blackjack, roulette, poker and craps, which account for about half of the money generated by slots, have increased 11% statewide since 2019. But they fell 25% at Harrah’s. Rivers Philadelphia and Parx have reported an increase in table game revenue over the past two years.
The scenario unfolding in Pennsylvania is no different than in New Jersey, where total gaming revenues are on the rise, but Atlantic City casino operators say the transition to internet gambling is benefiting. mainly to online gaming operators and sports betting. They say the physical operations of casinos and their employees are suffering.
The New Jersey legislature this week rushed a tax break for casinos awaiting the signature of Governor Phil Murphy, who has indicated his support.
In Pennsylvania, in-person casino gaming accounted for 64% of total gaming revenue in November, up from 91% two years ago.
Casino revenues appear to have been hit in several states where internet gambling is legal – Pennsylvania, New Jersey, Delaware and West Virginia, said Roger Gros, editor of Global Gaming Business Magazine in Nevada. Michigan also launched Internet gaming this year.
But Gros doesn’t think online gambling is entirely responsible for the fixed income of casinos. Some casino customers may not have returned due to the coronavirus, he said. And the young players that casinos are trying to attract prefer table games to slot machines.
“I don’t think this is very bad news for casinos because it really diversifies the income they get,” he said. “If, God forbid, there is another pandemic lockdown, they will still have income from the online side. “
The November gaming numbers also don’t reflect the impact the omicron variant could have on casino traffic. Gros said New Years Eve hotel reservations in Las Vegas are strong. “I don’t think it’s impacting anyone so far,” he said. “People are just fed up with it, and who knows what this omicron thing does when it comes to its severity.”
The addition of online gaming has changed the ranking of Pennsylvania casinos by source of income, which Parx Casino has run for years. Parx still generates the most revenue from physical operations.
But when online revenue is included, the list is dominated by Hollywood Casino at Penn National, whose online gaming platform is operated by DraftKings, followed by Valley Forge Casino Resort, which has partnered with FanDuel. DraftKings and FanDuel are the leading sports betting operators and also offer casino games.
Much of the growth in gaming activity in Pennsylvania is rooted in state gambling expansion legislation in 2017, which created mini-casinos and permitted sports betting and online betting. and on video terminals in truck stops. Moody’s Investors Service rating agency said at the time that the new betting options were likely to curtail casino activity.
“While state finances may benefit from this bill, it is less clear to what extent existing operators in the state will actually benefit,” Moody’s said in a 2017 report.
Indeed, the coffers of the State of Pennsylvania have experienced strong growth in tax revenues thanks to the resurgence of gambling. Pennsylvania generated $ 171.9 million in tax revenue in November from gambling, up 44% from November 2019.
In the past 12 months, Pennsylvania has clawed back $ 1.8 billion in gambling taxes, part of which is funneled to local governments.
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