PG Recap: Penn National Wants out of Casino Project, Cites Market Saturation; with Overall Slot Revenue down, Three Casinos Post Year on Year Increases
May 07, 2015
That’s the reason why Penn National wants out of the Lawrence Downs Casino and Racing Resort, a $225 million project proposed by Endeka Entertainment LP.
“We are disappointed to be withdrawing from this project,” said Penn National Gaming Chief Development Officer BJ Fair in a statement. “However, given the continued softness in the economy and the level of market saturation — not just in Western Pennsylvania, but across the Commonwealth — we are regrettably unable to justify this investment at the statutorily required spending levels.”
The company has filed a lawsuit so that it may withdraw from the project legally. In its statement, Penn National said that it wanted “to reaffirm our rights regarding withdrawal from Lawrence Downs” and would be happy to allow another company to step in and operate the future casino.
Local casinos were heavily opposed to the licensing of Lawrence Downs, as owners worried about too much competition in the area. Some analysts say the same about the proposed Live! project, a joint venture between Cordish Cos. and an Greenwood Gaming which would build a second casino in Philadelphia. Experts have stated that the market can’t bear another gambling center, and that the new complex would only serve to cannibalize revenues from competitors.
With Overall Slot Revenue down, Three Casinos Post Year on Year Increases
As slot revenues slumped in March, a few of the state’s casinos were able to eke out a small amount of growth compared with the same time last year. In total, the industry took in $207,712,396 last month, compared with $216,213,980 in gross revenue during the same period in March 2014.
The Lady Luck Casino Nemacolin, Valley Forge Casino Resort, and the Sands Casino Resort Bethlehem, however, were able to post an increase in revenue. Valley Forge took in the least amount of cash, banking $2,207,008.90 in March 2014 and $2,493,840.85 last month, a growth of 13%. At $6,915,013.13 last month, Valley Forge was able to increase their numbers, topping its March 2014 revenues of $6,694,868.05.
The Sands Casino Resort in Bethlehem took home nearly $1 million more than it had last year, posting monthly revenues of $26,201,561.19, compared with $25,580,709.21 in 2014.
As the market becomes more saturated, lawmakers have turned to online poker as a possible source of new tax dollars for the Commonwealth. Two legislators, John Payne and Nick Miccarelli, have already introduced their own online gambling bills. Most industry watchers believe that the Keystone State will eventually legalize some form of Internet gambling, but the move will likely not come this year.