Effect of new Ohio casinos being watched

The Adios Lounge at the Meadows casino for high-rollers photographed Saturday, June 4, 2011.
The Adios Lounge at the Meadows casino for high-rollers photographed Saturday, June 4, 2011.
Photo by Jasmine Goldband | Tribune-Review
| Tuesday, Aug. 14, 2012

The arrival of casinos in Ohio might not siphon much business from gambling parlors in the Pittsburgh area, but Presque Isle Downs and Casino is feeling the squeeze, industry watchers said Monday.

Table-game and slot revenue at the Erie casino tumbled from $15.55 million in June 2011 to $14.81 million in June 2012, the first full month after two casinos opened in Ohio. The one closest to Pennsylvania, Horseshoe Casino Cleveland, is about 100 miles southwest of Erie.

“We anticipated the first casino in Cleveland would cause some revenue decrease at the Erie property,” said Doug Harbach, spokesman for the Pennsylvania Gaming Control Board.

Other Ohio casinos will be positioned far enough from Western Pennsylvania that “we do not anticipate (they) would have a tremendous impact,” he said.

The Horseshoe casino opened May 14, about two weeks before the Hollywood Casino Toledo started welcoming gamblers. Two more are planned under a constitutional amendment Ohioans approved in 2010. One, in Columbus, will open Oct. 8; the other, in Cincinnati, sometime early next year.

Pennsylvania has allowed casinos since 2007 and now has 11, including three in Western Pennsylvania. At the Rivers Casino on the North Shore, out-of-state visitors account for less than 10 percent of customers, Vice President Matt Stewart said.

“It's too early to measure the impact of Ohio casinos,” he said in an emailed statement. Rivers' table-game and slot revenue climbed from $26.8 million in June 2011 to $28.66 million in June 2012, according to state data.

At the Meadows Racetrack and Casino in Washington, table-game and slot revenue grew from $22.32 million in June 2011 to $24.96 million in June 2012, state reports show.

Meadows General Manager Sean Sullivan said his business has felt “minimal impact” from the Cleveland casino. He credited the array of amenities at the Meadows facility, which go beyond gambling to include live entertainment, bowling and other features.

Still, Western Pennsylvania and West Virginia casinos will lose some business as more Ohio casinos open, said Joseph Weinert, a senior vice president at Spectrum Gaming Group in Linwood, N.J. His company is under contract to review casino-operator applicants in the Buckeye State.

“There will be a natural market balance when all four of the Ohio casinos are open,” said Weinert, declining to predict the revenue shifts. He said a lot will depend on how Western Pennsylvania casinos market themselves.

“All things being equal, people generally choose to gamble closer to home,” Weinert said. “The Western Pennsylvania casinos, to maintain their levels of business, would have to find a reason to give (Ohioans) to … come to Pennsylvania.”

Gambling revenue in Atlantic City, a longtime gamblers' mecca, dipped from $5.2 billion in 2006 to $3.3 billion last year as more states allowed casinos. Weinert said he doesn't expect the hit in Western Pennsylvania to be that dramatic.

Ohio expects to bring in about $470 million in annual tax revenue once all four casinos open. Pennsylvania, second in the United States in gaming revenue, generates more than $1.4 billion in annual taxes from the sector.

At the Rivers Casino, customers left open the option of Ohio gambling. Edward Burney, 78, of Youngstown, Ohio, said he might stay in his home state to gamble.

But the incentives — such as meal vouchers and discounted bus transportation — would have to be right, he said. He prefers to stay within 80 miles of home for his casino trips.

“It depends on the perks,” he said.

Adam Smeltz is a staff writer for Trib Total Media. He can be reached at 412-380-5676 or asmeltz@tribweb.com.

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