Pennsylvania Casinos Win a Record $3.3BN in FY 2016/17

Pennsylvania Casinos Win a Record $3.3BN in FY 2016/17

Pennsylvania’s gambling market reached yet another high point last year after the state’s 12 casinos generated a record $3.3 billion in winnings for fiscal year 2016/17 ending June 30th. That figure eclipsed the previous record set in FY 2015/16 by 0.6%, or almost $20 million, with table games growing by 3.3% to $895.3 million, and slot machine revenues improving slightly by 0.7% to $2.352 billion.

Slot machines are taxed at a rate of 54%, while table games are subjected to a lower 14% tax rate. The Keystone State subsequently collected $1.44 billion by way of taxes in FY 2016/17, according to the latest financial results released by the Pennsylvania Gaming Control Board (PGCB), with the money being used to support a whole range of different projects, including property tax reduction for Pennsylvania homeowners, funding the horse racing industry, infrastructure programs, and the state’s General Fund.

Pennsylvania Casino Revenue

Sands Casino Resort Bethlehem continued to lead the state’s casino market, and collected $235.7 million last financial year, or +0.24% more than the previous year. This placed the venue $50 million ahead of its nearest rival Parx, which generated $185.9 million, up by +9.28% from FY 2017, while SugarHouse occupied third place with its $120.2 million in revenue marking a +1.28% year-on-year improvement.

Other casinos posting impressive gains last year included the Meadows Casino (+22.18%), Luck Casino Nemacolin (+14.7%), Valley Forge Casino Resort (+10.3%), and Rivers Casino (+10.19%).

On the flip side, five of the state’s casinos saw their year-over-year revenues decline, led by Presque Isle Downs and Casino (-7.75%), followed by Mohegan Sun Pocono (-5.97%), Mont Airy Casino Resort (-2.67%), Harrah’s Philadelphia Casino and Racetrack (-2.1%), and Hollywood Casino at Penn National Race Course (-1.32%),

Mini-Casino Expansion

In October 2017, Pennsylvania voted through a gambling expansion package that included allowing video gaming terminals (VLTs) to be placed at airports and truck stops across the state, as well as the setting up of a number of satellite casinos hosting up to 750 slot machines and 30 table games. Thus far, $127.7 million has been raised from five mini-casino license bids, and now that this particular round of licensing has come to an end, the PGCB is currently mulling whether to open up the bidding to out-of-state entities

Nine iGambling Licenses

As part of its gambling expansion package, the Pennsylvania legislature agreed to legalize online gambling, and between April 16 and July 16 the state’s casinos were encouraged to bid for $10 million licenses that would allow them to offer the full range of online gambling games, namely table, slots, and poker.

Up until a couple of weeks ago, however, not a single application had been made. At the eleventh hour, the PGCB subsequently received bids from nine of Pennsylvania’s casinos, allowing the board to breathe a collective sigh of relief. In fact, just Lady Luck Casino Nemacolin, Meadows Racetrack and Casino, Mohegan Sun Pocono, and Presque Isle Downs & Casino failed to tender a bid, although they may instead be seeking to take advantage of the individual games licenses costing $4 million each that have now become available until August 14th.

Sports Betting Zero Bids

Thus far, applications for the state’s $10 million sports betting licenses remains at zero, with analysts pointing at the unusually high fee, as well as the 36% tax rate gaming operators will subsequently have to pay on their revenues. While gambling firms have asked the Pennsylvania legislature to reexamine the 2017 law that proposed the exorbitant sports betting fee, there has been little to suggest Harrisburg is seriously considering making such a change.

After all, Pennsylvania is the country’s fifth-most populated state with almost 13 million people, presenting a tantalizing opportunity for gambling companies looking to move into the sports betting market. Furthermore, the PGCB is probably expecting a last minute surge in applications, as it experienced for its online gambling licenses.