Pennsylvania reports first annual slots revenue decrease
PHILADELPHIA — Pennsylvania's casinos recorded their first annual decline in gross revenue from slot machines during the fiscal year that just ended, the latest sign the state's casino business is leveling off after six years of growth.
The state's 11 casinos generated $2.43 billion in gross slots revenue during the fiscal year that came to a close Sunday, down nearly 2 percent from the $2.48 billion generated the year before, according to Pennsylvania Gaming Control Board figures released this week. The annual slots decline marked the first such decrease since the state's first casino opened in November 2006.
Before the latest 12-month period, gross slots revenues had increased each year as the state grew into the nation's second-largest gambling market behind Las Vegas, eclipsing Atlantic City for the No. 2 spot. Gross slots revenues began with $454.6 million in fiscal year 2007, built up to $1.4 billion the following year and then hit $2.48 billion in the 2012 period.
But last year, nine of the 10 casinos open for all of both fiscal years reported slots declines as growth slowed. Sands Casino Resort Bethlehem was the only one to post a yearly gain, with gross slots revenue up 1.7 percent to $290.9 million from the year before. Valley Forge Casino Resort outside Philadelphia reported $55.9 million in gross slots revenue over the past year, up from $11.8 million the year before, but it opened in March 2012, so figures for the previous fiscal year were only for three months.
Presque Isle Downs and Casino in Erie reported the biggest annual slots decline, down 16 percent to $138.5 million. That casino has been experiencing significant declines since a new casino opened across the state line in Cleveland in May 2012.
Overall, Pennsylvania's casinos have been facing stiff competition from growing casino industries in Maryland, New York, Ohio and Delaware. Just as Pennsylvania siphoned business from Atlantic City when its gaming came on line, it's now feeling the effects of gamblers having new options elsewhere in the region.
Mohegan Sun at Pocono Downs in northeastern Pennsylvania was down about 6 percent, followed by Harrah's Casino Resort Philadelphia, which was down a little more than 5 percent.
Tax revenue from slot machines during the last fiscal year was $1.3 billion, down nearly 3 percent from the year before. The state taxes slot machines at a rate of about 55 percent; the state uses casino revenue to support the state budget, schools, development projects, volunteer firefighting squads, local governments and horse racing.
While slots growth has been slowing, table games, which were introduced in 2010, have still been showing strong growth. The gaming board said it expects to release annual table games revenue figures for the last fiscal year later this month.