The forecast for
gaming in Pennsylvania is cloudy with a chance of storms.
That’s a warning
in a 65-page report compiled by AKRF consultants for the city of Philadelphia,
which the Pennsylvania Gaming Control Board posted online this week.
With the snappy
title “Economic and Fiscal Impacts Analysis of Six Philadelphia Casino
Proposals,” the study by the New York consulting firm details on page 39 why
the Pennsylvania casino market is “approaching market saturation.” Pennsylvania
has 12 casinos and is considering issuing a second license for Philadelphia.
As AKRF notes:
A 2011 study by
the Innovation Group for the Pennsylvania Treasury found “a high rate of
cannibalization for new entrants to the local Philadelphia market.” When
SugarHouse Casino opened its doors in 2010, about 42 percent of its slot
revenues came from Parx and Harrah’s Philadelphia.
A 2012 study of
the market, conducted by Simon Condliffe and published in the UNLV Gaming
Research Journal, suggests that contrary to previous research, “new
Pennsylvania entrants are not increasing the aggregate gaming revenue” in the
market including southeastern Pennsylvania, Delaware and New Jersey.
And since Valley
Forge Casino opened in March 2012, eastern Pennsylvania casinos have seen a
steady drop in slot revenues: Mohegan Sun, down 19 percent; Parx, down 18
percent, Harrah’s Philadelphia, down 21 percent; Penn National, down 21
percent; Sands Bethlehem, down 17 percent; and SugarHouse, down 16 percent.
AKRF concludes:
“These trends show that there is increasing competition for gaming expenditures
within a region that includes not only Pennsylvania casinos but an increasing
number of out-of-state casinos. Couple this with longer-term trends such as
potential changes in New York State legislation that would expand non-Indian
gaming, and you have a clear trend toward individual casinos having a greater
dependence on expenditure potential within their immediate, local markets, in
this case the Philadelphia metro region.”
Source: Philly.com
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