Pennsylvania Slots Revenues on Downward Trajectory

While New Jersey’s casino industry went into decline following its 2006 peak, Pennsylvania’s nascent market soon overtook its neighbor to become the country’s second biggest casino market outside of Nevada. In recent times, however, Atlantic City has started to reverse its downward trend, and in a tale of two cities it is now Pennsylvania’s turn to start fretting over the moderate declines it is currently experiencing.
Concern is highlighted by Pennsylvania’s slot machine operations, which typically account for the bulk of a casino’s revenues, heading in a downward trajectory over the past six months. The negative trend began in October 2016, and in December peaked at a 6.17% drop, with just January subsequently noting positive growth of 2.44%. According to the latest results, the Pa market then posted a slight 0.6% revenue fall to $210 million in March, compared to $211.3 million for the same month in 2016.
Consequently, the market now seems to have stabilized on a moderate monthly year-on-year decline, indicating Pennsylvania’s gambling market is likely to continue to shrink unless a formula can be found to reverse the trend. Unfortunately for the Keystone State, Atlantic City’s renovation and recovery, together with increase competition from other nearby states such as New York, means that it is going to have a hard time getting its gambling industry back on track without first expanding its market.
So far, Pennsylvania lawmakers have shown little appetite for approving video gaming terminals (VGTs) around the state, perhaps indicating that it may instead choose to follow in the footsteps of New Jersey by legalizing online gambling. It may be further embolden to take the step after receiving an annual revenue forecast of $230 million from analysts, in addition to neighboring New Jersey also demonstrating that there’s no need to be concerned about iGaming cannibalizing the industry.
In 2016, Pennsylvania’s casino market generated revenues of $3.2 billion, up by 1.25% from the previous year. In the meantime, New Jersey saw its revenue increase by 1.5% to $2.6 billion, representing the state’s first annual growth in a decade.