The Pennsylvanian Gaming Revenues Foundation

There is an increasing amount of evidence the Pennsylvania gaming industry has stopped growing, short of some sort of change. What change the legislature will make in their ongoing talks with regards to an comprehensive gambling package, which could include online gambling, will help to pave the way forward to the future of existing casinos.

What’s happening in PA casinos

The industry, appears to have plateaued. Currently the PA casinos are facing:

Currently there is six straight months of declining slot revenue, that has been offset, to a certain extent, by table games. However, the drop year-over-year numbers for slots games has to be a concern as the start of a larger trend.

With many variables at play Pennsylvania it is not limited to:

The possibility of new gaming licenses/casinos in the commonwealth coming to pass.
An increase in regional competitions in New York, Maryland and New Jersey.
Concerns over rectifying the local share tax that was struck down by the state’s Supreme Court.
The largest variable, well be what the state legislature does about changing their gambling laws over the short term.

Possible solutions for PA gaming

There are several plans in the making to generate more revenue from gaming in the state. (As a matter of interest the state has promised an additional $100 million for the current fiscal year’s gambling budget. Gov. Tom Wolf included the money, plus a further $150 million for FY 2017-2018.)

While the generation of new money is needed, the gambling package’s impact on the current casinos and revenue is something else. Mr. Wolf has gone on record on several occasions to say that if there is to be any gambling expansion it must mean it leads to new revenue and not to just move it from one place to another.

Currently there are two potential methods that are on the table in an attempt to generate more revenue options:

Video gaming terminals (VGTs) in many private establishments, as well as online gambling.

Currently there is a debate in state legislature about how much would either of those things accomplish r. Wolf’s mandate.

PA online gambling

Despite protestations from two of the biggest State casinos, The Sands Bethlehem and Parx, evidence points to thoughts that online gambling will help the land-based casinos, and doesn’t cannibalize existing revenue.

Legalization of the PA online poker and casinos could result in fresh new revenues for casinos and states. Beyond that, most of the casinos agree that iGaming attracts new customers and also lapsed customers back through the doors of the land-based casinos.

In the meantime, a proposal to allow VGTs around the state is likely to have a less certain impact on the current casinos that are in PA.

There is already of thousands of VGTs that are operating in the state illegally, and the rationale is that the law is just bringing this to the light and taxing them.

However, the possible expansion of the VGTs raises the question of the possibility of greater erosion of slot revenue at casinos as a result.